Barrister Training Course

Workshop 2
Supplemental Guidance
Collaborate Task 2

Use this Supplemental Guidance to reflect upon your own work, revisit any areas which you
analysed incorrectly and consolidate your knowledge by revisiting the relevant elements of
learning in BPP Adapt and The White Book.

You are discussing the Menelaus case with your pupil supervisor. Your pupil
supervisor wants to test your understanding of the important issue of costs.

1. She asks you to imagine that Menelaus was of the view that the Marriners
owed it £82,831 plus interest. Having complied with all of its relevant pre-action
obligations, Menelaus issued proceedings seeking this amount. Further, at
trial, the judge found in favour of Menelaus and awarded it the full value of its
claim.

On these facts, in relation to costs, what would the court have regard to when
determining whether to award costs to Menelaus, and if so, in what amount?

 As made clear by CPR 44.2(1), the court has discretion as to whether costs are
payable by one party to another; the amount of those costs; and when those
costs are to be paid.

 Accordingly, therefore, while, if the court decides to make an order about costs,
the general rule is that the unsuccessful party (here, the Marriners) will be
ordered to pay the costs of the successful party (here, Menelaus) (see CPR
44.2(2)(a)), the court may make a different order (CPR 44.2(2)(b)).

 When deciding what order (if any) to make about costs, the court will have regard
to all the circumstances, including:

a) the conduct of the parties;

b) whether a party has succeeded on part of its case, even if that party has
not been wholly successful; and
c) any 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 (CPR 44.2(4) eg. A Calderbank offer).

 In relation to the question of the amount of costs to be awarded, the court will
also have regard to the factors set out at CPR 44.4.

2. She asks you to imagine that Menelaus complied with its pre-action obligations
and brought a claim for £82,831 plus interest but that the Marriners then made
a Calderbank offer to Menelaus, offering to pay £50,000 in full and final
settlement of Menelaus’s claim. Menelaus refused this offer and the matter
proceeded to trial. While the trial judge found in Menelaus’s favour, she only
awarded Menelaus £40,000: the remainder of the losses which Menelaus said
that it suffered were not made out by the argument and the trial judge decided
that Menelaus had, in part, exaggerated its claim.
 What order do you think the Marriners would most likely invite the court to
make in respect of costs in the light of the information set out in the previous
paragraph? Give reasons for your view.

 The court would likely start from the position that, while Menelaus did not win as
well as it might have hoped, it did, in fact, win the case. Accordingly, the general
rule that the unsuccessful party should pay the costs of the successful party:
CPR 44.2(2)(a) will likely apply. The Marriners would not likely ask the court to
order that Menelaus pays their costs as the court would be extremely unlikely to
make such an order.

 Instead, it is much more likely that the Marriners will ask the court to make an
order under CPR 44.2(6). The most likely types of order which the court might
make here are: an order that the Marriners pay only a proportion of Menelaus’s
costs (CPR 44.2(6)(a)) or pay costs relating only to a distinct part of the
proceedings (44.2(6)(f)).

 It is likely that the court will make such an order because:

o in deciding what order to make about costs, the court will have regard to all
the circumstances of the case, including any admissible offer to settle made
by a party and which is not a Part 36 offer (where that offer is drawn to the
court’s attention): CPR 44.2(4)(c) (this is the point of the Calderbank offer in
the question); and

o the court will also take into account the conduct of the parties (CPR 44.2(4)
(a)), especially whether it was reasonable for a party to raise, pursue or
contest a particular allegation or issue (CPR 44.2(5)(b)), the manner in which
a party has pursued its case or a particular allegation or issue (CPR 44.2(5)
(c)) and whether a claimant who has succeeded in the claim, in whole or in
part, exaggerated its claim (CPR 44.2(5)(d)).

 Applying these points to the facts of this particular case, there is an admissible
offer to settle (which is not an offer to which the costs consequences under Part
36 apply) in an amount greater than the client eventually obtained from the
court. The court would therefore take this into account when determining the
order to make in relation to costs (CPR 44.2(4)(c)).

 The trial judge has also made an explicit finding of fact that Menelaus
exaggerated its claim. Menelaus sought damages of £80,000 and was only
awarded £40,000.

 These points therefore justify the conclusion that the court is likely to make one or
other of the orders set out above.

3. She asks you to explain to her briefly your understanding of the different bases
on which the court is able to award costs.

 Where the court is to assess the amount of costs, it will assess those costs on
the standard basis or the indemnity basis (CPR 44.3(1)).

 If the court opts for the standard basis, the court will allow costs which are
reasonable and proportionate to the matters in issue (meaning that even costs
which were reasonably or necessarily incurred can be disallowed) and will
 resolve doubt as to whether costs should be allowed in favour of the paying party
(CPR 44.3(2)).

 By contrast, if the court opts for the indemnity basis, the court will disallow only
costs which were unreasonably incurred or unreasonable in amount and will
resolve doubt as to whether costs were reasonably incurred or reasonable in
amount in favour of the receiving party (CPR 44.3(3)).

 Essentially, the court will ordinarily make a costs award on the standard basis.
There has to be something which takes the case out of the norm for the court to
make a costs award on the indemnity basis and that something is likely to be the
conduct of the paying party.