Mc Aleenan -v- AIG (Europe) Ltd

Factual and Procedural Background

The Plaintiff brought a claim against the Defendant which was dismissed by the Court on 6th May, 2010. Following the dismissal, the Defendant applied for an order awarding its costs against the Plaintiff. The Court was tasked with determining the appropriate costs order in light of the complexity of the proceedings and the fact that the Plaintiff had been successful on several issues within the overall litigation.

Legal Issues Presented

1. Whether the Defendant, having succeeded in dismissing the Plaintiff's claim, is entitled to a full order for costs.
2. Whether the Plaintiff’s partial success on several significant issues justifies a departure from the general rule that costs follow the event.
3. How the Court should exercise its discretion under Order 99 of the Rules of the Superior Courts in allocating costs in complex litigation involving multiple contested issues.

Arguments of the Parties

Defendant's Arguments

• The Defendant contended that costs should follow the event, meaning the successful party (the Defendant) should receive a full order for costs.
• Relied on the Supreme Court decision in Grimes v. Punchestown Developments Company Ltd [2002] 4 IR 515, asserting the burden is on the Plaintiff to show why costs should not follow the general rule.
• Distinguished the present case from those where the losing party obtains partial relief, arguing that winning on discrete issues without obtaining relief should not affect the costs order.

Plaintiff's Arguments

• The Plaintiff was successful on three significant issues that increased the complexity and length of the proceedings.
• These successful issues related to both fact and law and arose from defences raised by the Defendant.
• Because these issues consumed the majority of hearing time and added complexity, the Plaintiff submitted that no order as to costs should be made.
• Argued that in complex Commercial List litigation, a party’s success on multiple issues should be considered in determining costs, rather than a simple "costs follow the event" approach.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began with the established principle that costs generally follow the event, meaning the successful party is entitled to costs. However, it recognized that in complex litigation, especially where multiple issues are raised and contested, the Court has discretion to depart from this rule.

The Court accepted the Plaintiff’s argument that success on certain key issues, which significantly contributed to the complexity and length of the proceedings, should be factored into the costs decision. The Defendant was unsuccessful on three major issues it raised in its defence, which added substantially to the evidence, legal submissions, and hearing time.

The Defendant’s attempt to distinguish cases where the losing party wins discrete issues without relief was rejected as inconsistent with Supreme Court authority.

The Court considered that it would be unjust for the Defendant to recover costs for the unsuccessful issues it pursued, given the Plaintiff’s success on those matters. It concluded that the Plaintiff’s successful issues accounted for approximately 40% of the overall complexity and length of the proceedings.

Accordingly, the Court exercised its discretion to offset costs, reducing the Defendant’s recoverable costs by 40%, reflecting the Plaintiff’s contribution to the litigation complexity and costs.

Holding and Implications

The Court ORDERED that the Defendant is entitled to recover 60% of its costs from the Plaintiff, and the Plaintiff is entitled to recover 40% of its costs from the Defendant by way of offset.

The costs are to be taxed in default of agreement.

This decision directly affects the parties’ financial liabilities in relation to costs but does not establish a new precedent. It reaffirms the discretionary approach to costs in complex litigation where partial successes by both parties are relevant to the allocation of costs.