Counting the costs
Just because you are successful at trial doesn’t mean you will recover all your legal costs, says Dan Butler
In January, Inside Housing reported on the judgement in Mears v Leeds Council. The council was ordered to pay damages to Mears after it was found to have breached regulations when tendering for a contract. Leeds failed to disclose weightings and criteria that applied when assessing submissions from contractors for a refurbishment, repairs and maintenance contract. It was found that this could have affected Mears’s chances of making it through to the next round.
On 20 October the parties went back to court to argue about the legal costs incurred in the case. Procurement challenges are notoriously expensive cases. They can only be heard in the High Court and the volume of paperwork means that proper scrutiny takes a lot of time - which means money.
The general rule in commercial litigation is that the unsuccessful party will be ordered, subject to the court’s discretion, to pay the successful party’s costs. In this case, although Mears won, it did not recover all its costs.
It is accepted that the appropriate starting point in assessing costs is to consider which party had been successful. The judge held that overall Mears had been the successful party as they had received damages but that the proportionate order was that the council should only pay 35 per cent of Mears’ costs, to reflect the significant issues upon which the council had successfully defended the claim.
Even if you are successful at trial it is not certain that you will recover all your legal costs. Clearly, the threat of an adverse costs award will have a significant impact on whether parties to a dispute seek to resolve matters at an early stage, by cheaper alternative dispute resolution such as mediation.
Dan Butler is a solicitor at Weightmans