Who should determine any questions as to costs at the conclusion of a trial?

The standard – and it seems almost always correct – answer, would be the trial judge himself. The rationale is obvious and entirely sensible – that such ancillary issues should be determined by the tribunal which heard the case from which the such issues arise.

However, the Court of Appeal last week suggested that this is not the universal rule, in the volubly-named case of Mengiste & Anor v Endowment Fund For The Rehabilitation Of Tigray & Ors: subnom Re An Application For Wasted Costs: (1) Endowment Fund For The Rehabilitation Of Tigray (2) Addis Pharamaceutical Factory Plc (3) Mesfin Industrial Engineering Plc v Rylatt Chubb [2013] Ewca Civ 1003.

In this case, the Appellant solicitors appealed the decision of Mr Justice Peter Smith sitting in the Chancery Division below ([2012] EWHC 2782 (Ch)) in refusing to recuse himself from hearing a stage one application for wasted costs, and making such an order against them, in favour of the Defendant’s solicitors.

The Appellants submitted that the judge should have recused himself after making such findings about them without hearing evidence, without warning, and without affording them the opportunity to address the court. Additionally, it was submitted that the stage one order should not have been made as the required prima facie strong case of improper, reckless, or negligent conduct had not been satisfied.

The Court of Appeal (Arden, Patten, McFarlane LJJ) allowed this appeal in part. They held that whilst the usual rule was for the judge on a substantive application to deal with consequential issues as to costs, even when he had previously made adverse findings towards a party.

However, the instant case was exceptional and the judge indeed had showed apparent bias. It was held that thus, he should have recused himself from hearing the wasted costs application because his criticism of the Appellants (which was held to have been designed to ward off an application for a wasted costs order against an expert witness in the case), was made in anticipation of an application that was never in fact made. The Court of Appeal further held that the judge had expressed his criticisms in absolute terms, failing to leave room for any explanation; and that the repetition of the criticisms and their severity made them extreme and unbalanced. Consequently, the stage one cost order was set aside.

As to the second ground of appeal, the Court of Appeal noted that the Appellant solicitors has admitted seriously breaching their obligations as regards the instruction of experts to give evidence. It was held also that they had failed to invite the court to ignore and disregard certain offending passages in the expert’s report, which went beyond the proper boundaries of his role and expertise. As a result, it was held that the Appellant had failed to establish that indeed no judge could have concluded that a stage one order was appropriate in the circumstances.

Whilst this decision undoubtedly affords guidance to the practitioner and the litigant, it is unlikely to have much practical impact upon judicial behaviour, given the necessity for judges at first instance to identify and (at least implicitly) accept the presence of the appearance of bias in themselves. Rather, the judgments oblique effect upon such tribunals may (perhaps it is optimistic to suggest) act as a further reminder upon judges not to risk putting themselves in such a position in the first place.