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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Budgen v Andrew Gardner Partnership (A Firm) [2001] EWCA Civ 1922 (7 December, 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/1922.html Cite as: [2001] EWCA Civ 1922

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr Justice Wright)

		Royal Courts of Justice Strand London WC2 Friday 7th December, 2001

1. LORD JUSTICE BUXTON: This is an application for permission to appeal from a costs order made by Wright J after a substantial trial in which Mr Budgen, the claimant, recovered substantial damages against the defendant solicitors, the Andrew Gardner Partnership.
2. Liability was not contested, but there was a lengthy and contested trial with regard to quantum of damages. It is not necessary for me to say any more about the underlying facts because they are amply set out both in the judgment on costs that the learned judge delivered and also, and importantly, in the judgment on the substance of the action that he delivered prior to that.
3. The point of complaint about the judge's handling of the costs matter is this. A very substantial issue between the parties so far as damages was concerned was what has been described as the HIS issue. Put very shortly, that concerned whether Mr Budgen had, by reason of his injuries, and then by reason of the failure of his solicitors to pursue his case properly on his behalf, had lost a very significant opportunity for developing a computer business. He said, and maintained, that that had been the case. The judge found that that claim was wrong and indeed doomed to failure, as the judge put it, because whatever the technical merits of the system that Mr Budgen had put in place, it had no viable commercial prospect of success.
4. This issue was a very substantial issue between the parties, and it played a very large role in the amount of damages claimed and in the time taken up at the trial. The defendants' solicitors took the view at a comparatively early stage, certainly before the trial started, that the claim was ill-founded. On 31st July 2000 they wrote a letter to Mr Budgen's solicitors indicating that that was so, and indicating that they, in the event (as they foresaw) of that claim failing, they would apply to the court for a special order with regard to costs.
5. After the trial opened there was a most unfortunate accident that occurred to Mr Budgen whereby, within the precincts of this building, he suffered further injuries which caused the trial to have to be postponed. The judge, I am told by Mr Livesey QC, and of course accept from him (and in any event with careful reading it is apparent from the judge's judgment), saw both counsel in his room, as in the circumstances it was, if I may respectfully say so, proper and sensible for him to do, and indicated his concern about the HIS issue and the amount of time and expense, including court time, that would have to be devoted to an issue which the judge thought would not prevail.
6. That meeting was followed by an open letter from the defendants reinforcing what they had said in their letter of 31st July 2000. Despite all that, those advising Mr Budgen continued with this claim which, as I have said, failed.
7. At the conclusion of the trial Mr Livesey applied to the learned judge for a special costs order in respect of the HIS claim; that is to say, in his preferred terms that the claimant should pay the costs of that issue. Failing that, that there should be some other order.
8. The judge of course knew well the difficulties of the HIS claim, because he had made that clear in his judgment. He said that the matter gave him very considerable anxiety. He also agreed at page 6D of his judgment with Mr Livesey's contention that there must have been a point at which it became clear that the HIS claim was untenable.
9. The judge however described the suggestion that there should be some contribution on the part of Mr Budgen to the defendants' costs as "very draconian" (that is at page 7D of his judgment), and said that in view of the way in which the rest of the litigation overall had been conducted it would not be right for Mr Budgen to make a payment towards the defendants' costs, but that his costs recovery should be reduced by an appropriate percentage which the judge fixed at 25 per cent. In mathematical terms Mr Livesey complains that that in nowise represented the costs to the defendant of the issue upon which Mr Budgen had failed.
10. What Mr Livesey seeks to persuade the Court of Appeal of is that the judge erred in principle, or alternatively was plainly wrong in the approach that he took to the costs matter.
11. I have found this to be a very difficult matter. In the written observations that I made, I indicated that I did not think it could be reasonably arguable (that is the test I have to apply at this stage) that the judge had exceeded the very wide margin of discretion that is given to a trial judge in determining costs at the end of a long trial. I will take the liberty of saying that that diffidence on the part of this court is likely to be the more pronounced when the trial judge is a judge of the immense experience in personal injury matters that is enjoyed by Wright J.
12. I have, however, come to the conclusion that the matter should be reviewed. There are two reasons for that. First of all, recent authority, particularly after the Civil Procedure Rules, has indicated that it may be appropriate to take a wider view of issue-based costs orders than was the practice previously. The two authorities in particular that point in that direction are the well-known observations by Lord Woolf MR (as he then was) in AEI Redifusion Music Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507, and the case put before me this morning by Mr Livesey, unreported, Winter v Winter 10th November 2000. None of those authorities, of course, come anywhere near to saying that a judge must always consider an issue-based order. But I think it is arguable that in the present climate this case was such a strong one in respect of the separate HIS issue, and that that issue played such a large part in the trial, that it was necessary, even allowing for the wide ambit of the judge's discretion, to make such an order. That is the first point.
13. Second, I am persuaded that it is arguable that the judge misunderstood the nature of the submissions being made to him in this respect and therefore approached the matter on a wrong basis. That arises in this way. A series of complaints were made with regard to the HIS issue in considerable detail, which have been repeated before me and are set out in Mr Livesey's skeleton argument. The central complaint, based upon the correspondence that I have referred to and also on the judge's own observations, was that the issue should never have been pursued at all. Subsidiary complaints, however, were made in respect of the way in which the matter had been pursued, in particular in relation to the instructions that had been given to the expert instructed on behalf of Mr Budgen and the way in which the documents relating to that claim had been handled and made available by the claimant's solicitors.
14. When the judge said (in the passage that I have already cited) that it would be draconian to make an order of the sort that the defendant sought, and also when he referred to the otherwise proper conduct of the trial, it is difficult to avoid the possibility that he was regarding the matter solely in the perspective of what I would call for the purposes of identification only misbehaviour on the part of the claimant and those advising him, rather than in the primary context of whether the issue should have been ventilated at all; and secondly whether in those circumstances the loss on that issue should be distinctively reflected in an order for costs.
15. If the judge did approach the matter in that way, it is at least arguable that he exercised his very considerable discretion on an incorrect basis. I emphasise that it is with considerable hesitation that this court will permit arguments about costs to be pursued before it. But the two matters that I have referred to do I think persuade me, admittedly by a narrow margin and with the assistance of Mr Livesey's further submissions, that this is a matter, first of all of some general importance with regard to the approach to issue-based costs; and secondly a matter that is sufficiently substantial to justify the investigation further of the two matters to which I have referred.
16. In those circumstances, I will grant permission to appeal. The appeal will be listed for hearing before a court of three members of this court, one of whom may be a judge of the High Court.
ORDER: Application for permission to appeal granted; appeal to be listed before a three-judge court, one of whom may be a judge of the High Court. (Order not part of approved judgment)