Successful Defendants denied their costs
The decision in this case is a blunt reminder to successful parties that winning a case does not necessarily mean that costs will be awarded; especially when there are multiple conduct issues.
European Real Estate Debt Fund (Cayman) Ltd -v- Treon & Ors [2021] EWHC 2866 (CH).
The Claimant brought an action alleging fraudulent misrepresentation when the Defendants induced the Claimant to subscribe to loan notes in June 2011 and a follow-up investment in 2012. At the Trial, it was found that the Claimant would have succeeded on the facts of the case had they not been statute barred. The Defendants were therefore successful at Trial.
The parties had opposed positions in respect of the costs. The Claimant was of the view that the Defendants should pay 80% of the costs, however, the Defendants argued that the Claimant should pay the costs.
Justice Miles stated that “it is clear that the Defendants are the successful parties; the claims were entirely dismissed. It follows that the general rule applies unless the Court decides to make a different order, but the court should still give real weight to the overall success of the Defendants as the winning parties, even if a different order is appropriate.” He also went on to comment that it was clear that conduct was an extremely important factor in considering whether they should depart from the general rule.
When considering the Defendants’ conduct, Justice Miles also concluded that “they contested all of the issues raised in the Particulars of Claim. As I have already explained, they lost on many of these issues.”
Upon considering what the appropriate order should be, Justice Miles rather damningly found the Defendants guilty of deceit and stated that the Defendants’ witnesses were not just poor, they fabricated evidence. Also, he took into account that the Claimant had lost on a single point and therefore this should be taken into consideration.
In conclusion, Justice Miles considered the appropriate order should be No Order as to Costs.
This case confirms that a party being successful in a claim does not always automatically entitle them to their costs of the action. Conduct of the parties is extremely important and will be taken into account when deciding an award of costs.
At PIC we can advise on legal costs regarding conduct issues, and in particular when the case has not been carried out in an accountable manner. When the conduct of a party is questionable, we can advise clients regarding the best approach when presenting the costs to the court. With 26 years experience of costs we understand the serious implications in respect of the conduct of the parties.
Kelly-Anne Kent, Senior Costs Consultant
08.09.22