A GOOD REASON WHY YOU SHOULD LOVE (OR AT LEAST MEDIATE WITH) THY NEIGHBOUR: INDEMNITY COSTS OF £200,000

August 11, 2017 · by · in Access to justice, Appeals, Costs

The Court of Appeal judgment in Dickinson & Anor v Cassillas [2017] EWCA Civ 1254 serves as a warning for anyone involved in a neighbour dispute. The Court dismissed the appellants’ appeal in relation to findings against them after a trial.  The section on costs is illuminating.

“Where most neighbours would have found a sensible solution to the problems that arose between them, Mr and Mrs Dickinson took their stand on what they considered to be their strict legal rights. To their great cost, they were wrong about those rights.”

 

THE JUDGMENT ON COSTS

 

  1. I accordingly consider that Mr and Mrs Dickinson cannot succeed on any of their grounds of appeal as regards the merits of the case.
  2. They also appeal against the order for costs made by the recorder. He ordered that they should pay the costs of Mrs Casillas, to be assessed on the standard basis up to 8 January 2009 and on the indemnity basis thereafter. He further ordered that, because the substantive order made by the recorder was at least as advantageous as an offer under CPR Part 36 made by Mrs Casillas but refused by Mr and Mrs Dickinson, they were liable to pay an additional 10% on the amount of the costs payable by them.
  3. The recorder gave a separate judgment on costs. On the basis of the evidence he had heard and his assessment of the evidence of Mr and Mrs Dickinson, he found that their approach to the case had been driven by a collateral reason or agenda, which was to get the meters moved. They had not come to court to assist the court in resolving the dispute but to assist themselves. Mrs Casillas had overwhelmingly succeeded. Mr and Mrs Dickinson accepted that two offers under Part 36 had been made, in December 2013 and July 2014, and that both had been refused. The order at trial was at least as advantageous as the offers made by Mrs Casillas, so that she was entitled to indemnity costs from the date that was 21 days after the first offer. The recorder also took account of an offer made by Mrs Casillas in December 2008, the failure of Mr and Mrs Dickinson to engage in any genuine or realistic attempt to settle the case and the conduct of Mr and Mrs Dickinson, which cannot have failed to include the recorder’s adverse assessment of the honesty of their evidence.
  4. These are all factors that the recorder was entitled to take into account in deciding not only to award indemnity costs but to do so from 9 January 2009. It cannot be said that the recorder has exercised his discretion on an incorrect basis or that his order is outside the wide discretion given to judges on issues of costs. There are no grounds for this court to interfere with his order.
    1. As to the 10% uplift on costs, Mr Nicholls based his submission on the fact that the offer made in December 2008 predated the introduction with effect from 1 April 2013 of the provision in CPR 36.17(4)(d) for the uplift, so that by reason of para 22(7) of the Civil Procedure (Amendment) Rules 2013 the provision did not apply in this case. This ignores that a relevant offer under Part 36 was made in December 2013 after the new provision had come into force. There is no restriction in 36.17(4)(d) as to the indemnity costs to which the uplift applies.
  5. We were told that Mrs Casillas’s costs amount to well over £200,000. I assume this includes the uplift on costs under her conditional fee agreement with her solicitors. This case has a long and acrimonious history, which is bound to have increased the costs, and we do not know all the circumstances that may have led to this level of costs. Even allowing for that and for assessment of the costs on the indemnity basis, this appears to be an extraordinarily high figure for a case involving a minor property dispute. Although an assessment on the indemnity basis removes the requirement that the costs should be proportionate to the matters in issue, they must still be reasonably incurred and reasonable in amount. The burden of showing that they are unreasonable lies on Mr and Mrs Dickinson, but the parties can expect the costs to be scrutinised on assessment, unless (as I would hope) they might be agreed.
  6. For the reasons given above, I would dismiss this appeal. Where most neighbours would have found a sensible solution to the problems that arose between them, Mr and Mrs Dickinson took their stand on what they considered to be their strict legal rights. To their great cost, they were wrong about those rights.”
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