Factual and Procedural Background
The opinion concerns four lead cases in which the claimants obtained judgments for substantial damages, though less than claimed. The defendants made no settlement offers under Part 36 of the Civil Procedure Rules. The litigation involves complex claims brought in tort and under the Human Rights Act, with the tort claims ultimately failing as time-barred while the Human Rights Act claims succeeded. The cases involved extensive factual and legal complexity, including issues of Crown act of state doctrine and the identity of forces who captured and detained the claimants. The court had previously made a costs sharing order distinguishing between common costs, costs of specific issues, and costs of individual claims. The defendant has applied for permission to appeal certain conclusions related to the Crown act of state doctrine, which the court addresses in this opinion.
Legal Issues Presented
- Whether the defendant should be ordered to pay the claimants' costs in full or with reductions reflecting partial success and specific issues lost by the claimants.
- The appropriate categorisation and assessment of costs, including common costs, specific issue costs, and individual claim costs.
- Whether an issue-based order on costs relating to the identity of the forces who captured the claimants is appropriate.
- Whether the court has jurisdiction and should grant permission for the defendant to appeal conclusions on the Crown act of state doctrine.
- The appropriateness of making a declaratory judgment related to the Crown act of state defence after the final order has been sealed.
- The proper management and progression of the remaining claims in the litigation following the lead cases.
Arguments of the Parties
Defendant's Arguments
- Argued that the claimants should not recover full costs due to partial failures on several issues.
- Proposed an issue-based order for no costs relating to the issue of the identity of the forces who captured the claimants.
- Submitted that the court could vary the final order to include a declaratory judgment on the Crown act of state defence to enable an appeal.
- Applied for permission to appeal conclusions on the Crown act of state doctrine.
Claimants' Arguments
- Asserted that as successful parties, they should recover their costs unless good reason exists to disapply the general rule.
- Rejected the defendant's balance sheet approach to costs reduction, emphasizing that partial losses on issues do not automatically reduce costs.
- Criticized the defendant's disclosure delays on the identity of forces issue but did not allege unreasonable conduct warranting costs penalty.
- Opposed the defendant's request for a declaratory judgment, noting no claim for such relief was made during proceedings.
- Requested an interim payment on account of costs awarded.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Kazakhstan Kagazy Plc v Zhunus [2015] EWHC 404 (Comm) |
Distinction between recoverable costs and costs incurred for a party's own benefit exceeding basic necessary expenditure. |
The court referred to this precedent to highlight that some of the claimants' costs were above the basic necessary level and should be considered by the costs judge in assessment. |
| Tibbles v SIG Plc [2012] EWCA Civ 518 |
Criteria for varying a final order under CPR 3.17, including material change of circumstances or mis-stated facts. |
The court applied this precedent to reject the defendant's request to vary the final order to include a declaratory judgment, finding no applicable grounds for variation. |
Court's Reasoning and Analysis
The court began with the principle that the successful party should recover costs unless good reason exists to disapply that rule. It rejected the defendant's argument that making Part 36 offers was unusually difficult and accepted that the claimants were the overall successful parties.
The court analyzed the costs categories, endorsing the claimants' approach to distinguishing common and individual costs, especially regarding case management hearings and preparatory steps post-October 2015.
Regarding partial success, the court declined a mechanistic "balance sheet" approach, focusing instead on whether the claimants lost on significant issues that consumed substantial trial time and costs.
The court identified two main factors justifying costs reductions: the failure of the tort claims (time-barred) and, for two claimants, a major factual issue lost concerning the identity of the capturing forces. It quantified these reductions at 15% for two claimants and 50% for the other two, reflecting the relative significance and resource allocation to these issues.
The court considered and rejected the defendant's proposal for an issue-based costs order on the identity of the forces, citing practical difficulties and arbitrariness in separating costs by issue. Instead, it preferred a broad percentage reduction.
On the defendant's application for permission to appeal aspects of the Crown act of state doctrine, the court found a fundamental jurisdictional flaw: no appeal lies against a judgment giving reasons rather than the final order, and the defendant’s challenge would not affect the outcome since the tort claims failed on other grounds. The court refused permission to appeal and declined to vary the final order to include a declaratory judgment, reasoning that no claim for such relief was made during proceedings and that it was an inappropriate remedy in these personal injury claims.
The court also addressed procedural management of the remaining claims, endorsing a pause for claimants’ solicitors to review outstanding claims, followed by resumption of information exchange and a case management conference to plan future conduct.
Regarding interim payments, the court accepted the claimants’ estimates as a sufficient basis despite their skeletal nature, applying a conservative discount and factoring in conditional fee arrangements likely to increase assessed costs.
Finally, the court made general observations to assist the costs judge, emphasizing the complexity and significance of the lead cases, the difficulty of obtaining evidence from witnesses in dangerous locations, and the need to distinguish costs fairly attributable to the other party from those incurred for a party’s own benefit, noting the claimants' "Rolls Royce" approach to litigation.
Holding and Implications
The court AWARDED COSTS TO THE CLAIMANTS with reductions reflecting partial failures:
- In two cases, the defendant must pay 85% of the claimants’ individual costs.
- In the other two cases, the defendant must pay 50% of the claimants’ individual costs.
An interim payment of £2.5 million was ordered on account of costs.
The court REFUSED PERMISSION TO APPEAL the conclusions on the Crown act of state doctrine due to lack of jurisdiction and the academic nature of the issue in these cases.
The court declined to vary the final order to include a declaratory judgment.
Procedural directions were given for a pause in the litigation to review outstanding claims, resumption of information exchange, and a case management conference to consider future conduct.
No new legal precedent was established; the decision primarily addresses costs allocation, procedural management, and jurisdictional limits on appeals in the context of complex multi-claim litigation.