Mr Peter Knox KC and Katherine Bailey (instructed by Taylor Wessing LLP) for the Defendant/Applicant
MR JUSTICE FREEDMAN :
This judgment is to be read alongside the earlier judgments in this matter. In the judgment dated 17 June 2024, neutral citation [2024] EWHC 1495 (Ch), the Court ruled on a strike-out application made by Musst against MRL. In the judgment dated 19 August 2024, neutral citation [2024] EWHC 2167 (Ch), the Court made rulings about costs.
The court has ruled that the costs of the application for summary judgment in favour of MRL on the grounds of summary judgment and abuse of process (“the March Application”) should be paid by Musst to MRL. At the same time, the Court ruled that there should be no order as to the costs of the strike out for collateral use application and the retrospective permission application. Likewise, the Court ordered that there should be no order as to costs in respect of the application to re-amend the Particulars of Claim save for the costs of and occasioned by the re-amendment itself.
This is the Court’s ruling in respect of the quantum of the payment on account in respect of the costs of the March Application. MRL’s statement of costs in respect of the March Application comprises a sum of £274,138.61. It submits that the Court should treat an appropriate percentage for a payment on account to be 70% comprising a sum of £191,897.03.
Musst takes issue on two principal points, namely:
(i) the appropriate percentage should be 60% and not 70%;
(ii) the sum against which the percentage should be applied should be by reference to the costs schedule of 2 May 2024, adjusted upwards only by reference to the adjustment made in respect of Musst’s costs as an appropriate guideline for this purpose.
On this basis, Musst submits that the sum should be (1) 60% of a sum of £146,213.97 (the sum in the 2 May 2024 schedule) comprising £87,728.38, and (2) 60% of an extra £48,246.16 (the adjustment of Musst) comprising £28,947.70. This leads to a total sum of £116,676.08 instead of £191,897.03.
It is not necessary to address every point made, albeit that I have considered each of the points contained in the written submissions of MRL dated 16 August 2024 and the written submissions of Musst dated 22 August 2024. They both cite passages from the case of Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm) at paras. 23-25, 28.
Although I have been guided by the observations there cited which are of more general guidance than the facts of that case, there are important points to be added. First, the particular factors weighing in each case are fact specific to the case itself. Second, despite the general guidance, it should be still noted that Excalibur was an unusual case involving huge costs and very serious criticism of conduct giving rise to indemnity costs. In the instant case, there has been rejected a submission about indemnity costs, the case lasted two days and the parties are apart by tens of thousands of pounds, whereas the issue of even the payment on account of costs in Excalibur involved many millions of pounds.
There are also certain points specific to this case to be mentioned.
First, in the instant case, both parties have attached importance to the costs of the other. As is inevitable, and no criticism is intended, this tends to be selective. For example, MRL points to aspects of Musst’s charges which are greater than its own, whilst Musst points to aspects of its charges which are smaller than those of MRL. It is important to recognise that the costs of the other party are only a factor and are not decisive. This was described as follows in the Guide to the Summary Assessment of Costs 2021 Edition produced by the Civil Justice Council summarising the weight to be given to the costs of the paying party at [11]:
“The costs which the paying party has incurred for its own representation may be relevant when considering the reasonableness and proportionality of the receiving party’s costs. However, they are only a factor and are not decisive. Both parties may have incurred costs which are unreasonable and disproportionate, but only reasonable (and, on the standard basis, proportionate) costs may be allowed.”
Second, a degree of caution should be applied to costs incurred during the hearing in addition to the costs contained in the cost schedule lodged prior to the hearing. The instant hearing was fixed to take place before and after a Bank Holiday weekend in order to accommodate the commitments of Counsel and the Court, that is to say on Friday 3 May 2024 and Tuesday 7 May 2024. After the judgment had been handed down and as part of the consequentials, when the successful party could be identified, there were further costs schedules comprising additional costs particularly over the bank holiday weekend. Those costs have been considerable comprising several tens of thousands of pounds, large by themselves and large as a proportional uplift to the costs already contained in the original costs schedules lodged prior to the hearing.
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