Citation Plc v Ellis Whittam Ltd
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR JUSTICE TUGENDHAT,Mr Justice Tugendhat |
| Judgment Date | 28 March 2012 |
| Neutral Citation | [2012] EWHC 764 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ11D03824 |
| Date | 28 March 2012 |
[2012] EWHC 764 (QB)
The Honourable Mr Justice Tugendhat
Case No: HQ11D03824
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
James Price QC (instructed by Eversheds) for the Claimant
Jane Phillips (instructed by Robin Simon) for the Defendant
Hearing date: 14 March 2012
This judgment relates to the order for costs following the handing down of my judgment on 14 March Neutral Citation Number: [2012] EWHC 549 (QB).
I held that the Claimant had an arguable case that the words complained of as a slander and a malicious falsehood had been published by an employee of the Defendant, and that they had been published to more than one publishee. But I struck out the action as an abuse of process on the basis that what the Claimant
"had achieved by 13 October 2011, when it issued its claim form, and in any event by 28 October 2011, when it served its claim form, was in practice all that it could achieve which would be of any value to it in vindicating its reputation" (para [50]).
SUBMISSIONS
Ms Phillips submitted that costs should follow the event, and so that there should be the usual order that the Claimant pay the Defendant the costs of and incidental to the proceedings which have been struck out. She submits that they should include the costs of the correspondence exchanged pursuant to the Defamation Pre-Action Protocol.
Mr Price submitted that the Defendant should pay the Claimant its costs up to the date of the Claim Form, and that there should be no order for the costs of the action itself.
Mr Price submitted that if the Claimant had persisted in its claim for damages the court would not have struck out the action, at least at this stage. The claimant would have been permitted to take the case forward to disclosure. If it had then become apparent that there was substantial (as opposed to trivial) damage, then the claim would have proceeded in the normal way. He submitted that if the Claimant is ordered to pay all the Defendant's costs, that will in effect penalise the Claimant for adopting the reasonable stance of not pursuing its claim for damages. And other litigants in a similar position in the future will have a perverse incentive not to be so reasonable.
Ms Phillips submitted that the Claimant never abandoned its claim for damages. And that in any event, since the Defendant has not admitted any slander or malicious falsehood, nor any liability, it would be wrong in principle to make an order for costs adverse the Defendant.
Neither counsel was able to identify the basis of the court's jurisdiction to make an order for the payment of costs before the issue of a claim form. So I reserved this judgment.
Having then drawn the attention of the parties to McGlinn v Waltham Contractors Ltd [2005] EWHC 1419 (TCC); [2005] 3 All ER 1126 (discussed in the White Book 2012 para C1A-016), I invited such further submissions as they might wish to make. Ms Phillips made no further submissions.
Mr Price made further submissions in writing. He submitted that if the parties do not reach an agreement,
"it would not be an abuse of the process of the court for a claimant to decline to settle the dispute in question, notwithstanding that he had been offered all that he was entitled to by way of substantive relief, unless the offer included an acceptable offer in relation to costs. In such a situation, it would be perfectly proper for the claimant to decline the offer, commence proceedings and leave the defendant to decide whether to concede the claim for substantive relief in the context of the litigation. As has frequently been observed judicially, costs are, regrettably but in current conditions inevitably, often the most significant elements of a party's claim."
THE LAW
If a claim form is issued, then by CPR Part 44.3,
"(2) If the court decides to make an order about costs –
(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
(b) the court may make a different order…
(4) In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including –
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and
(c) any payment into court or admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply.
(5) The conduct of the parties includes –
(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction (Pre-Action Conduct) or any relevant pre-action protocol;
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;…
(6) The orders which the court may make under this rule include an order that a party must pay –…
(c) costs from or until a certain date only;
(d) costs incurred before proceedings have begun;…".
If a claim form is not issued, there may in some cases still be a successful and unsuccessful party. CPR Part 44.12A provides:
"(1) This rule sets out a procedure which may be followed where – (a) the parties to a dispute have reached an agreement on all issues (including which party is to pay the costs) which is made or confirmed in writing; but (b) they have failed to agree the amount of those costs; and (c) no proceedings have been started."
But the present case does not come within CPR Part 44.12A, because the parties have not reached agreement on any issues.
Nor can the Claimant say that this is a case in which he has been "offered all that it was entitled to by way of substantive relief": that would have been so if he had been offered an undertaking to be made by the Defendant to the court in terms with which the Claimant was content. But the undertaking which the Defendant has offered to make to the court is not acceptable to the Claimant, and the Claimant issued proceedings in order to obtain an injunction in terms which are different. In the present case the Defendant did not admit the factual basis for the claim that its employee had spoken the words complained of. What it did was to satisfy me that there is no real risk that it will in future publish the words complained of.
The CPR does not expressly address the situation where a claimant has good grounds for intimating a claim, but there is no agreement between the parties, and before the claim form has been issued it becomes clear that whatever factual basis may originally have existed for the claimant's claim (if any), that factual basis no longer subsists.
In McGlinn Peter Coulson QC (as he then was) said this about the court's jurisdiction (and repeated it in Roundstone Nurseries Ltd v Stephenson Holdings Ltd [2009] EWHC 1431 (TCC) para [48]):
"5. Section 51 of the Supreme Court Act 1981 provides as follows:
(1). Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to the proceedings in … b. The High Court, … shall be in the discretion of the court.
6. Mr Stewart QC submitted that the costs incurred by a party in complying with any Pre-Action Protocol are capable of being costs "incidental to" any proceedings which are subsequently commenced if the Protocol...
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