Analysis
The appellant (Richard) had successfully brought an application for reasonable financial provision from the estate of his late father. This had been initially expressed as a family provision and proprietary estoppel claim for some 50% of the deceased’s estate. The proprietary estoppel claim was dropped but the level of provision claimed under the Inheritance (Provision for Family and Dependants) Act 1975 remained unaltered.
Richard provided little information on his financial position until directed to do so by the recorder at trial. This late disclosure proved the existence of previously unknown debts. The claim succeeded, a lump sum of £36,475 (a rounded up figure for the debts) was awarded.
The late disclosure formed the basis of the defendants’ submission that their costs for the trial should be borne by the estate and that Richard should pay their costs up to the start of their final preparations for trial. The recorder ordered Richard’s costs to be paid from the estate on the standard basis, finding no causal link between the defendants’ failure to make a Part 36 offer or to approach the claim differently and Richard’s late disclosure.
The defendants appealed the costs judgment, to HHJ McCahill QC (sitting as a judge of the High Court), contending that Richard should be ordered to pay the entirety of their costs. This was allowed and Richard was ordered to pay the defendants’ costs of the trial and the first appeal, judge McCahill finding that the recorder (in requiring proof of a causal link) had erred in principle by failing to correctly apply the principles propounded in Ford v GKR Construction [2000] 1 WLR 1397.
This had severe costs consequences for Richard, as his ATE insurance policy only assisted him in the event that he lost the claim, which, of course, he had not. He appealed to the Court of Appeal.
Held (allowing the appeal unanimously):
- (1) Ford does not create a principle that any shortcomings on the part of a litigant dictates a particular costs consequence; it does no more than to provide a reminder that the discharge of a judge’s discretionary jurisdiction over costs requires him or her to take account of ‘all relevant aspects of the litigation’ – anything more restrictive would fetter a judge’s discretion and that cannot have been their Lordships’ intention (para [30]).
- (2) The recorder directed himself correctly, as to: the general rule that costs follow the event; that this may be departed from in appropriate circumstances; and was clearly aware of the requirement that he take account of all relevant factors, including conduct and late disclosure. He had taken careful account of these matters in reaching his judgment and gave his reasons (paras [31], [32], [35]).
- (3) Whether or not another judge would or might have made a different order was irrelevant. There was no error of law and the conclusion reached was well within the range of discretion available in the circumstances:
- (i) the defendants had made no offer to settle the proceedings;
- (ii) the defendants’ stance in the proceedings remained that the deceased’s will did not fail to make reasonable financial provision for Richard;
- (iii) the defendants had not, at any stage, sought further disclosure from Richard;
- (iv) the defendants made no suggestion that the evidence disclosed at a late stage changed the complexion of the case or that they needed time to consider its implications;
- (v) the recorder placed no reliance on the late disclosure in his initial determination of reasonable financial provision (only on the point of quantification); and
- (vi) even without the late disclosure the claim could have succeeded (paras [33]-[35]).
- (4) Accordingly, Judge McCahill was wrong to interfere with the recorder’s judgment on costs and the first instance order as to the costs of Richard’s claim was restored (para [36]).
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