Case No: 2007 Folio 1384
NEUTRAL CITATION NUMBER: [2009] EWHC 1334 (Comm)
IN THE HIGH COURTS OF JUSTICE
QUEEN’S BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand
London WC2A 2LL

Date: Wednesday, 6 May 2009

BEFORE:

THE HONOURABLE MR JUSTICE ANDREW SMITH
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BETWEEN:

	(1) LEVICOM INTERNATIONAL HOLDINGS BV
(2) LEVICOM INVESTMENTS CURACAO NV	Claimants	
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	LINKLATERS (a Firm)	Defendants	

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MR JUSTIN FENWICK QC and MR BEN PATTEN (Instructed by Manches) appeared on behalf of the Claimants

MR STEPHEN MORIARTY QC and MR DERRICK DALE (Instructed by Clyde & Co) appeared on behalf of the Defendants
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COSTS JUDGMENT

MR JUSTICE ANDREW SMITH
1.	I come to consider the costs that I should award.  There is no dispute that the starting point is the general rule that the unsuccessful party will be ordered to pay the costs of the successful party and there is no dispute, Mr Fenwick rightly accepts, that the question as to which is the successful and which is the unsuccessful party is not a question of technical analysis, but of commercial reality.  The successful party here is Linklaters and the unsuccessful party is Levicom notwithstanding the award of nominal damages.  

2.	The question is whether there should be a departure from the general rule.  It is accepted by both parties that if there is a departure it should be by way of awarding Linklaters a proportion of their costs rather than making discrete orders in respect of particular issues or allegations.  That seems to me the proper approach.

3.	Mr Fenwick also makes the point that if a discount is to be made the proportion should reflect not only the appropriate deduction from Linklaters’ costs, but also reflect the entitlement of Levicom to be compensated, albeit indirectly, in respect of some of their costs.  

4.	In deciding what order is to be made the rules require me to have regard, among other things, to the conduct of the parties, whether the parties succeeded on part of their case and any payment into court or admissible offer to settle.  No payment into court or offer to settle has been drawn to my attention.  The fact is that to some extent Levicom succeeded in establishing negligence.  

5.	As far as the conduct of the parties are concerned it does not seem to me that conduct before the proceedings, either by reference to any pre-action protocol or otherwise, should indicate a departure from the general rule.  The thrust of the argument advanced by Mr Fenwick, as I see it, is that the combination of the conduct of Linklaters in refusing to acknowledge any shortcoming in their advice, which understandably contributed to Levicom’s feeling that they had been let down with regard to the advice that they received before launching the arbitration, combined with the limited success on negligence, demands a discount.  

6.	It seems to me that the difficulty facing this argument is that on many aspects Linklaters answered the allegations of negligence and, more importantly, the question of the nature and extent of the negligence is inherently bound up so closely with the question of causation, that it is unrealistic to consider that a limited admission on the part of Linklaters would have abbreviated or even assisted the central and important enquiry as to reliance and causation.  

7.	Given that, and given the limited success of Levicom with regard to the allegations of negligence, to my mind this is not realistically a case in which there should be a departure from the general rule.  	It does not seem to me that any limited admission that Linklaters might have made would have significantly shortened or indeed affected the course of the trial, and while it might have been attractive for Linklaters to have made a limited admission, it does not seem to me that it was unreasonable of them not to do so and insofar as CPR 44.3.5.B bears upon the matter it does not seem to me that Linklaters can be said to be unreasonable in the way they conducted the defence.
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