Last week the Technology and Construction Court considered how to allocate costs in a claim where costs had become the critical issue, given the lack of proportionality between the high level of costs claimed and relatively low level of damages recovered.
Part 36 offers would have made matters a great deal more straightforward, but the problem was that the parties hadn't made any that had any teeth prior to trial, the claimants' offers in particular were a long way north of what was ultimately recovered. There were some interesting dynamics at work in the case though. The claimants had recovered substantial damages (albeit only a minor percentage of the sums claimed and substantially less than the costs incurred in obtaining them). As such, the Judge had to treat the claimants as being successful and therefore entitled to recovery of some of their costs at least.
Interestingly, the Judge placed weight on the defendant's Part 36 offer being much closer to the sums actually awarded than the claimants', and took that into account in relation to the conduct of the parties when determining the amount of the costs that the claimants should recover. The claimants were generally criticised for exaggerating their claim and pursuing a particular approach despite some obvious flaws and deficiencies in their case. The claimants were also said to have adopted a consciously unhelpful attitude in the proceedings and their expert evidence was further said to be flawed. The defendant's approach was said to be much more realistic in contrast.
Due to the 'fundamental inadequacies' of the claimants' experts reports, the claimants were held not to be entitled to any of their expert costs, nor to any of the lawyers' costs in dealing with the experts. Further, the Claimants were only entitled to 60% of their remaining costs. As the Judge said it is rare that civil litigation goes so wrong for everybody. When it does, none of the parties can really be said to have won.