PROPORTIONATE COST ORDERS WHEN COSTS ARE £8 MILLION AND £10 MILLION APIECE: HIGH COURT DECISION

We have already looked at the decision in Amey LG Limited -v- Cumbria County Council [2016] EWHC 2496 (TCC) in relation to the question of proportionality. However the judgment contains much more of interest in relation to costs. It provides an important example of the court’s approach a proportionate costs order.  The judgment considers conduct; alleged misconduct; who “won” and whether it was reasonable for a party to reject a “drop hands” deal.

“It cannot be right in my judgment that Amey should be criticised for not accepting a walk away offer, which offered neither a substantive payment nor any offer in relation to costs, simply because it could be said that it would be very expensive to continue to trial.”
“…I am far from convinced that it is appropriate to conclude that a party should be deprived of costs for failing to accept an offer which, in this case, was far short of his true entitlement, because it could be shown that he would recover less in costs than the amount he would spend to obtain that entitlement. The result of the Jackson reforms is that this problem is to be avoided in claims valued at below £10 million by way of active advance costs management and, as I have said, both Amey and Cumbria took the decision in this case not to invite the court to costs manage, on the basis that they both believed that it was proportionate to spend substantial amounts on costs given the recovery they each hoped to achieve.”

 

THE CASE

The action was a very substantial dispute relating to a 7 year contract for highways maintenance and other services.

  1. As I said in my substantive judgment, this is a claim and counterclaim arising out of a 7 year contract for the provision of highways maintenance and other services by the claimant, Amey, to the defendant, Cumbria. By the time the contract expired a number of claims and counterclaims had already been intimated, and Cumbria had made substantial deductions from Amey’s 3 final monthly payment applications. Neither the final account process nor the subsequent pre-action protocol process resulted in an overall settlement of the claims and counterclaims, with the result that Amey commenced proceedings in the Manchester Technology and Construction Court in December 2013. Amey’s claim as originally pleaded amounted to over £30 million together with interest. The counterclaim as originally pleaded, even after taking into account Cumbria’s valuation of Amey’s claims, was around £20 million. The parties endeavoured to settle their disputes throughout the course of the proceedings, including undertaking a week-long mediation in May 2014, and achieved some success in settling some of the claims, but the majority of the claims remained in dispute. The case went to trial at the beginning of February 2016 and ran until the end of May 2016.
  2. The result of the trial, in summary, was as follows[1]:
4.1 After taking into account all claims and counterclaims Amey was the victor, achieving a judgment of around £5.365 million, comprising around £3.698 million principal plus contractual interest of around £1.697 million.

4.2 Amey was successful as to around £4.616 million in relation to its part 1 claim, claimed at around £7.915 million, being its valuation of its annual account claims for work done in the 3 final years of the contract, where it said that Cumbria had wrongfully undervalued its claims and wrongfully made deductions from them.

4.3 Amey was only successful as to around £296,000 in relation to its part 2 claim, claimed at around £19.774 million, being its valuation of what were pleaded as being 16 separate final account claims for additional sums claimed under the contract and/or as damages.

4.4 Cumbria was successful as to around £1.214 million in relation to its counterclaims, claimed at around £15.646 million.

4.5 Adding together Amey’s part 1 and part 2 claims, and deducting Cumbria’s counterclaims, pleaded as a defence and set off as well as an independent counterclaim, produced the net balance of £3.698 million principal. The interest of around £1.697 million represents contractual interest on that sum at 8% over base from June 2012.

  1. In relation to its part 1 claim, in broad terms Amey succeeded in showing that the substantial deduction of around £4.197 million made by Cumbria from the final 3 monthly claims on the stated basis that it had substantial counterclaims had been very largely unjustified. However Amey failed to show that it had been very substantially underpaid for the Better Highways work undertaken by Amey from 2008 onwards. That was because whilst Amey was able to satisfy me that it had undertaken this work to the extent that it had claimed it failed to satisfy me that it was so different from the work previously undertaken that it was entitled to payment on a re-rated and therefore substantially increased basis.
  2. In relation to its part 2 claims, although Amey succeeded in part on 6 of its part 2 claims it failed on the remaining 10. Its net recovery of around £296,000 needs some clarification, because that includes a deduction of around £280,000 for the overpaid element of the Better Highways work as well as a deduction of around £288,000 for the deduction of a previous on account payment. Thus the total of the individual awards to Amey for the 6 items on which it succeeded was around £864,000 before deductions.
  3. In equally broad terms, Cumbria very substantially failed to achieve success in relation to its three most substantial counterclaims, being the defects counterclaims in Schedules 2, 3 and 7. It achieved a success of only around £802,000 in relation to these multi-million pound claims, where the total claimed was around £12.6 million. Of the £802,000 it achieved a significant success only in relation to one element of the Schedule 2 and 3 claims, which was a claim for repayment of payments made for testing which I concluded had not been undertaken (around £598,000 of the sum claimed of around £2.223 million) and only in relation to around £179,000 of the sum claimed of around £877,000 for Schedule 7. The major reasons for its failure to achieve greater success were (a) its failure to satisfy me that it was proper to extrapolate its findings from inspections of work sites sample inspected to the entirety of the works undertaken by Amey; (b) its failure to satisfy me that it was proper to award damages based on the cost of remedial works which I was satisfied were never in fact going to be carried out; (c) its failure to evidence the majority of its Schedule 7 claims for notified defective works.
  4. Furthermore, whilst it achieved some success in relation to some of the other counterclaims, many of those were mirrors of Amey’s claims, rather than freestanding claims in their own right, and it failed on others. As I have said overall its level of success was not sufficient to justify the deductions it had made from Amey’s annual account claims.

THE ARGUMENTS IN RELATION TO COSTS

  1. Amey’s position is straightforward. It is the successful party and should be awarded its costs of the claim and counterclaim with no reduction.
  2. Cumbria’s position as clarified in oral submissions was that:
(1) Whilst it accepted that Amey was the successful party, because of Amey’s relative lack of success, its conduct and relevant admissible offers its costs entitlement should be reduced to 50% of its recoverable costs.
(2) There should be separate costs orders in Cumbria’s favour in relation to three discrete items, the first being the costs attributable to what I have found were Amey’s delays and defaults as regards its failure to produce documents from its SAP IT system, the second being the costs attributable to what are said to have been Amey’s unreasonable allegations of fraud and dishonesty made in closing submissions, and the third being the costs of obtaining legal advice as regards Amey’s threat of contempt proceedings.

THE COSTS INVOLVED

  1. The importance of the debate about costs may be seen from the costs incurred, as to which both parties produced details for the purposes of the costs argument.
  2. Amey’s total costs from 1 July 2012 to date, excluding costs not charged to it by its solicitors and excluding costs already dealt with, are said to amount to around £8.848 million. Cumbria’s are said to amount to around £10.037 million.
  3. I should also record that this case was not subject to costs management. At the time the case was issued costs management did not apply to claims with a stated value of over £2 million unless the court otherwise ordered. Prior to the first case management conference the court enquired whether the parties intended to file costs budgets and after consideration both parties stated in clear terms that they did not wish the court to make a costs management order. They did however, as they were required to do, indicate on their case management information sheets the estimated amounts already spent on costs and the estimated overall costs. In Amey’s case the figure was £1.7 million and £6.5 million respectively and in Cumbria’s case the figure was £2.5 million and £6 million respectively. In those circumstances the court did not order that costs management should apply against the wishes of both parties and the case proceeded to trial.
  4. Whilst it is apparent that both parties’ incurred costs are significantly in excess of those estimates, the reasons for that have not been the subject of investigation at this stage. It is apparent from my knowledge of the case, having case managed the case throughout and tried the case, and from the costs schedules, that very significant and broadly equivalent amounts have been spent by both parties on electronic disclosure and the electronic trial process, on very significant expert input, particularly on quantum and extrapolation, and on intensive input from the respective legal teams. I have no doubt that the hard fought nature of the case, with very little in the way of agreement on issues or on figures as figures, and the need for intensive activity on all hands and at all stages to ensure that the case was ready for trial and was concluded within the trial timetable, provide explanations for much if not all of the increase on both sides.

 

“SUCCESS”

The judge reviewed the principles in relation to proportionate costs orders, he also considered the question of proportionality (looked at in the previous post),

  1. In this case, as in many others, the issue of conduct is closely linked with the issue of success, because it is said by the losing party that the court should consider the extent to which the successful claims were exaggerated and also the extent to which it won or the winning party lost on specific issues both as relevant factors in their own right and also on the basis that the winning party’s case in relation to those issues was unreasonable. I will therefore address these mixed success / conduct issues in this section of this judgment.
  2. I have already summarised the respective success and failure of Amey and Cumbria in relation to the principal claims and counterclaims.
  3. Cumbria contended in its written submissions [30] that a number of Amey’s part 2 claims were exaggerated. It identified 9 separate claims pleaded as totalling around £12.15 million where either nothing or a negative amount was awarded. It contended that these claims were found to be entirely devoid of merit, and that even in relation to the other claims much less was awarded than claimed.
  4. In my judgment that submission significantly overstates the true position. By reference to my substantive judgment the position may be summarised as follows:
(1) Amey succeeded on items (j), 3, 4, 5, 6, 8 and 19. Whilst it did not succeed in full on these claims they were not knowingly exaggerated. Mr Bowdery QC referred to item 6, landfill, where he submitted that the claim as advanced by Amey was rejected and it only succeeded on the basis of the court being prepared to find in part for Amey on the basis of the case advanced by Cumbria. Whilst that is true so far as it goes, it should also be borne in mind that I found Amey’s case to be misconceived because it proceeded on a number of unverified assumptions, rather than because it was being put forwards on a basis which was always known to be exaggerated or hopeless.

(2) I did find that items 1 and 2 were put forwards on an artificial exaggerated basis, see my substantive judgment at [9.14], although I did not find (and do not find) that they were knowingly put forward on that basis.

(3) Amey lost on item 12, the very substantial Better Highways re-rating claim, because whilst I found for Amey on the number of gang days worked I was not satisfied that it was contractually entitled to a re-rate (see paragraph 5 above) – there was no question of exaggeration, knowing or otherwise, by Amey.

(4) I did not and do not find exaggeration by Amey, whether intentional or otherwise, in relation to item 13; it was simply a claim which failed on my interpretation of the contract and my factual findings. The same is true of item 14.

(5) I found against Amey on item 17 on the basis of my finding as to what was contractually required of Cumbria and on the basis that it was a global claim. I was also critical of Amey’s approach to extrapolation, which I did describe as an “egregious failure” [18.29]. However I also recorded [18.17] Amey’s ready acceptance that this claim was really only ever advanced as a counter to Cumbria’s equivalent patching thickness claims. Thus I would consider this as an opportunistic and over-optimistic claim, as opposed to a deliberately dishonest or exaggerated claim.

(6) I found against Amey on item 20 on the basis of my findings as to the proper interpretation of the contract and on the basis that it was a global claim, but I did not nor do I find that it was pursued as a deliberately dishonest or exaggerated claim.

(7) Amey did not completely lose on item 23, and there is no question of this being an exaggerated claim.

(8) Amey lost on item 24 and I did accept that it was a “speculative” claim [22.10], but it was really no more than a book-end claim anyway.

  1. It follows that whilst I accept that there is some legitimate basis for criticism of Amey as regards some elements of its part 2 claim, it is nowhere near as much as that contended for by Cumbria. Furthermore, I have no hesitation in rejecting Cumbria’s argument that in some way its counterclaims were meritorious but simply happened to fail on the issues of causation and quantification. There is no need for me to rehearse in this costs judgment the serious criticisms I levelled of Cumbria in relation to its Schedule 2 claim, which was by far the largest claim in the whole case, both in terms of value and the time it took up, most significantly – as I say in paragraph 6 above – due to its failure in relation to the foundation of its case on extrapolation and the fact that the quantification was advanced on a wholly artificial basis. The same was true in large part of Schedule 3, other than in relation to testing, and I was extremely critical of Cumbria in seeking to advance Schedule 7 without sufficient evidence.
  2. In my judgment what Cumbria said in its written submissions at [32] is the heart of the matter, which is that whilst both Amey and Cumbria advanced a number of very substantial claims and counterclaims which failed, in whole or in part, the simple fact is that Cumbria lost this case because it deducted or withheld substantial amounts from assessed amounts due to Amey at the end of the contract because it believed, wrongly, and continued to believe, that its counterclaims were genuine and substantial and at the very least justified the entirety of the deductions or withholdings: see [37.27, 37.35 and 37.38 of the main judgment].

CONDUCT

  1. Cumbria seeks a separate issues based order in relation to Amey’s default and delay in the disclosure of information available on Amey’s SAP database.
  2. As to this, I addressed the vexed question of Amey’s compliance with its disclosure obligations as regards SAP in section 4 of my judgment. In particular I concluded at [4.37] that Amey had failed to provide Cumbria with full access to SAP from July to December 2015, but that such failure was not deliberate, at [4.38] that there had indeed been consequential delay with consequential costs consequences, but that this had made no significant difference to the eventual course of the trial. Indeed it had not made any difference to the overall outcome, because although it is true that Cumbria’s quantum expert was able to make some beneficial use of the information made available from SAP in relation to some of the claims, as regards the largest claim where SAP was said by Cumbria to be crucial I rejected Cumbria’s reliance on SAP when it came to consider the question of the Better Highways gang days worked by Amey. I also concluded at [4.39] that Amey could not be criticised for failing to give access to SAP at the pre-action stages.
  3. In the circumstances I am quite satisfied that there is no sufficient basis for making a separate issue-based order in relation to SAP. Cumbria has produced a schedule of costs said to relate to Amey’s “late and reluctant disclosure of the SAP documentation” in the sum of £102,078. Whilst not insignificant, in the context of Cumbria’s overall costs of over £10 million this would only amount to around 1% of the total. I am satisfied that it would be a very difficult and time-consuming task to undertake a separate assessment of these costs. I am satisfied that the more appropriate course is to make some allowance for this in the overall proportionate costs order which I am going to make, as to which see below.
  4. There are also two reserved costs orders relating to SAP, which I reserved on the basis that until after trial it would not be possible to know whether or not the determined pursuit of information from SAP by Cumbria had been a worthwhile exercise. These are the orders of 18 December 2015 and (as belatedly drawn) of 3 August 2016. I am satisfied that the appropriate order for these is costs in the case, on the basis that Cumbria will receive the benefit of the general reduction but also that Cumbria did not obtain the benefit of SAP it was hoping for in relation to the Better Highways claim.
Other conduct / Contempt
  1. In written submissions at paragraph 23(7) Cumbria also complained that Amey made allegations of fraud and dishonesty in its closing speech which were said to be unjustified and unjustifiable, to have not been put to Cumbria’s witnesses, and for which there were no proper grounds. Although no details were provided in written or oral submissions, it was subsequently clarified by Cumbria’s solicitors that this was intended to be a reference to Amey’s criticisms in closing submissions of Cumbria’s approach in relation to the assessment and payment of the sums claimed for Better Highways, of its approach to deducting or withholding from the final three monthly assessments, and of its approach to its assertion and substantiation of the extrapolated defects counterclaims. As to this, whilst it is true that these criticisms were put high, and that I did not for the most part in my substantive judgment accept that the position was quite as bad as characterised by Amey, nonetheless I did accept much of Amey’s case as to these matters and made a number of criticisms of Cumbria’s approach in these respects. I am also satisfied that the substance of these criticisms were put, in vigorous terms, in cross-examination both of Mr Robinson and to Mr Raymond.
  2. It follows that I do not accept this criticism of Amey’s conduct. I am satisfied that Amey was perfectly entitled to advance its case as vigorously as it did at trial. Even if that had not been the case, I do not consider that it would have been appropriate to make any reduction from costs in this regard. This is not a case where, for example, Amey had set out from the beginning to plead and prove fraud or dishonesty, had devoted considerable time and effort to doing so through to closing submissions, but had spectacularly failed. By way of contrast, I cannot help but draw attention to my observations in my substantive judgment as regards Cumbria’s pursuit of its Schedule 1 winter services claim.
  3. Cumbria also complained in written submissions [25-28] that Amey’s conduct in writing to allege contempt of court against Cumbria’s chief executive and others was unreasonable to a high degree and justified an award of indemnity costs. This is a reference to Amey’s criticisms of Cumbria and its advisers for pleading and persisting with the claim for extrapolation on the basis that it could be proved as statistically random when in fact it was, or ought to have been, apparent to Cumbria and its advisers, and to Mr Robinson in particular, that it could never be demonstrated that Cumbria’s sampling exercise was statistically random.
  4. I summarised my conclusions in relation to this aspect of the case at [1.27 – 1.32] of my substantive judgment. I concluded that for reasons given in more detail later in the judgment I did not accept the serious criticism made of Mr Robinson, namely that he was responsible for the defence and counterclaim being filed and served, verified with a statement of truth, in circumstances where he knew that it was false, in that he knew that it would never be possible for Cumbria to establish its case on the pleaded basis. I was nonetheless critical of him and therefore of Cumbria for the claim having been pleaded in this way, and also for it not having been amended, or the position stated in clear terms, once it became absolutely clear to Cumbria and its advisers that the pleaded case based on the 95% confidence rate could not be supported.
  5. I also made it plain [1.28] that I did not consider it appropriate to address in the substantive judgment either the substance of the letters written by Amey or Cumbria’s criticism of those letters. I should also make it plain that since this judgment is dealing with costs the only relevance of this allegation is in relation to costs, and it is not my function to go beyond that.
  6. In short, I do not however consider that it was improper for Amey to take a dim view of Mr Robinson’s evidence as it emerged or of Cumbria’s behaviour as regards this matter. I also accept that the letters written by Amey to Cumbria’s chief executive and others were written in order to give reasonable warning at the earliest opportunity, in accordance with the guidance given by the Court of Appeal in KJM Superbikes v Hinton (Practice Note) [2008] EWCA Civ 1820, and not with any malign intentions. Thus the letter written to Cumbria’s solicitors dated 3 March 2016 did not make any positive allegation that Cumbria’s legal advisers had committed a contempt of court; it merely gave notice that this was something which was being investigated by Amey, and it made it plain that no further steps in that regard would be taken by Amey until the conclusion of the case. Whilst I accept that this letter would have been deeply concerning to Cumbria’s legal team, I do not accept that it was improper or unreasonable to write such a letter at that stage, and I accept Amey’s submission that its purpose was to place Cumbria’s legal team on notice of the position at the earliest opportunity, in accordance with the guidance referred to above, rather than with ulterior and discreditable tactical motives. I reach the same conclusion as regards the letters dated 16 March 2016 sent to Cumbria’s Chief Executive and in-house solicitor, which were to similar effect.
  7. Accordingly I do not accept that it would be appropriate to make a discrete costs order against Amey in this regard, whether on the indemnity basis as advanced or otherwise. I also note in any event that the costs schedule in support of the application is limited to the cost of obtaining separate leading counsel’s advice in the sum of £3,975.

ADMISSIBLE OFFERS

Perhaps the most remarkable aspect of the case is the defendant’s argument in relation to a “drop hands” offer it had made.

  1. Cumbria relies upon an admissible offer which it made on 31 July 2015, whereby it proposed a “walk away” settlement, i.e. that both claims and counterclaims be withdrawn with no order as to costs. It accepts that Amey has, of course, done better than this at trial in terms of the substantive award. However it submits that:
(a) Its approach was both commercial and reasonable, in contrast it says to Amey’s uncommercial and unreasonable approach. Thus it says that the only relevant admissible global offer made by Amey was one made in August 2014 to accept only £19.95 million plus costs. It complains of Amey’s failure to make any admissible global counter-offer in response to Cumbria’s drop hands offer, and submits that this illustrates that Amey continued to take a wholly unrealistic approach to its part 2 claims. In oral submissions Mr Bowdery contended that had Amey made a sensible counter-proposal in response to Cumbria’s offer it is likely that a reasonable settlement would have been achieved.

(b) As at July 2015 the true value of Amey’s claim (adjusting for interest) would have been around £4.87 million. It submits that given the likely costs recovery which Amey will obtain on detailed assessment it is likely that Amey spent more than that in costs from that date onwards in obtaining the judgment which it did.

  1. Cumbria went so far in its written submissions as to argue that Amey’s conduct was so egregious as might have justified an award of indemnity costs against it as from July 2015. In oral submissions Mr Bowdery moderated this approach and submitted that a reasonable outcome would be to deprive Amey of 50% of its costs to reflect all relevant circumstances, including the position in relation to admissible offers.
  2. In responding to this submission, Mr Streatfeild-James contended that the factual analysis by Cumbria was flawed. He pointed out that Cumbria had made a number of separate admissible offers both preceding 31 July 2015 and on 31 July 2015 itself, none of which it came close to matching at trial. He pointed out that Amey had also made a number of separate admissible offers in response, some of which resulted in individual settlements, which showed that Amey was not in any sense resolutely refusing to negotiate reasonable settlements. He also pointed to the fact that there was a second mediation in November 2015 which, although unsuccessful, again showed that both parties were at least trying to achieve an overall settlement. He submitted that in that context it was a hopeless argument on Cumbria’s part that if only Amey had responded more positively to its walk away offer the case could have settled. He submitted that what was quite clear was that Cumbria resolutely refused to make any admissible offer at any time whereby it was prepared to make any, let alone a substantial, payment to Amey on the basis that Cumbria had wrongfully deducted or withheld substantial monies from the last three months’ assessments. He noted that in the Multiplex case Jackson J. was able to and did find at [39] that the claimant had made an offer which was slightly too high but was nonetheless constructive, and that had the defendant entered into a dialogue as invited to do by the claimant the particular claims in question would probably have been settled. It is also the case that the 7th principle enumerated by Jackson J., that an outright refusal to negotiate in response to a “near miss” offer may make it appropriate to penalise that party in costs, has since been said by the Court of Appeal to be in error and should be disregarded: Dufoo v Tolaini [2014] EWCA Civ 1536.
  3. I prefer and accept Mr Streatfeild-James’ submissions. In my judgment Cumbria cannot show either that its offer was reasonable and should have been accepted, or that Amey can or should be criticised for its response, or that had Amey responded in some more appropriate way the case would have settled.
  4. I also consider that Cumbria’s analysis of the reasonableness of Amey’s conduct from a commercial perspective as from the date of its walk away offer is flawed. As at that date Amey would have been entitled to a substantive award of around £4.87 million. It is reasonably clear that at that stage its costs were, very broadly speaking, of a comparable amount. On any view Amey would have been entitled to payment of its costs at that point. Whilst there would have been some scope for debate as to whether or not Amey should recover 100% of its costs or some lesser proportion, on any view it would have been a significant proportion. If Amey had accepted Cumbria’s offer it would have recovered nothing and would have had to write off its costs, a total loss of something approaching £9 million. It does not seem to me that it was obviously unreasonable for Amey in those circumstances to press on to trial, even at a further cost of around £4.5 million in relation to costs, in order to recover that amount.
  5. In its responsive submissions Amey made the same point in a slightly different way, which was that if Cumbria had been more realistic it ought to have made a Part 36 offer for say £5 million. If that had been accepted Amey would have been entitled to receive the £5 million and its proportionate and reasonable costs. Even if Cumbria had a good reason for arguing that it should not have to pay all of Amey’s costs, by reference to the issues of success and conduct upon which it now relies, it could have made an admissible offer to pay £5 million together with a proportion of Amey’s costs to be determined by the court. It cannot be right in my judgment that Amey should be criticised for not accepting a walk away offer, which offered neither a substantive payment nor any offer in relation to costs, simply because it could be said that it would be very expensive to continue to trial.
  6. Mr Bowdery advanced a further argument on proportionality to the effect that since Amey ought to have known that if it recovered only £5 million it would not secure a costs recovery in excess of 50% of that sum, namely £2.5 million, it can now be seen that Amey is worse off as a result of proceeding to trial than it would have been had it accepted the walk away offer. That is because its total relevant costs expenditure is around £8.85 million, whereas on this analysis it will recover no more than £5.365 million principal and interest and around £2.5 million costs. However, for the reasons I have already given as regards proportionality, in my judgment there can be no room for a confident assumption that on detailed assessment no more than 50% of the total recovery will be awarded to Amey. In the circumstances there is no basis for a contention that Amey ought to have known that it would be worse off by continuing than by accepting Cumbria’s walk away offer. In any event, I am far from convinced that it is appropriate to conclude that a party should be deprived of costs for failing to accept an offer which, in this case, was far short of his true entitlement, because it could be shown that he would recover less in costs than the amount he would spend to obtain that entitlement. The result of the Jackson reforms is that this problem is to be avoided in claims valued at below £10 million by way of active advance costs management and, as I have said, both Amey and Cumbria took the decision in this case not to invite the court to costs manage, on the basis that they both believed that it was proportionate to spend substantial amounts on costs given the recovery they each hoped to achieve.
  7. Standing back, whilst there may be some room for some criticism of Amey for not counter-proposing an admissible global offer at a more reasonable level by reference to the eventual outcome, that criticism is modest when set against Cumbria’s persistent refusal to accept that it had over-deducted from monies otherwise due to Amey, and that its defects counterclaims were speculative and did not justify the substantial deductions made or counterclaims advanced, and thus when set against Cumbria’s steadfast refusal to make an offer of repayment of a substantial amount of money together with payment of Amey’s reasonable and proportionate costs.

 

THE RESULT: THE CLAIMANT RECOVERED 85% OF ITS COSTS

  1. Weighing everything up in the round, in my judgment the appropriate order is that Amey should recover 85% of its costs. This reflects its failure in relation to many of the Part 2 claims and its failure in relation to the Better Highways claim, including the criticisms I have made of some of its more optimistic and/or exaggerated Part 2 claims, and also the limited criticisms I have accepted of its conduct, particularly in relation to SAP. However it reflects these matters in the context of my assessment of the overall relative success and failure of both parties, and also of Cumbria’s failure to protect itself against the adverse judgment which it has suffered, and it also reflects the extent to which in my assessment time and costs were incurred by reference to these issues and this conduct. As I have made clear, it does not take the issue of proportionality into account.
  2. Finally, Cumbria has properly drawn my attention to the fact that there are a number of orders where costs were reserved, in addition to those already referred to in the context of SAP. Having considered these, my decision is that all such orders should be treated as orders for costs in the case.

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