Costs penalty for unreasonable conduct when drawing up court order (High Court)

The procedure on drawing up court orders is set out in CPR 40 and Practice Direction (PD) 40B (see Practice note, Interim hearings: an overview: Drawing up the order).

The usual practice in the Technology and Construction Court (TCC) is for the court to ask the claimant or applicant's lawyers to prepare a draft order for agreement by the defendant or respondent's lawyers (paragraph 5.8.1, TCC Guide).

Parties to litigation are required to help the court to further the overriding objective (CPR 1.3). The TCC Guide expressly provides that a judge may impose costs sanctions if he concludes that one party is not reasonably co-operating with the other parties (paragraph 5.1.2, TCC Guide).

This decision relates to a professional negligence claim against a surveyor in the TCC.

At a case management conference (CMC) on 23 November 2012, Edwards-Stuart J ordered that certain issues (referred to as the assignment and lending issues) should be dealt with first. The issues relating to the actual valuations, if they arose, would be heard separately. The judge gave directions, in particular, limiting disclosure and exchange of evidence to the assignment and lending issues. He ordered that the costs of the CMC be reserved to the first trial.

The judge asked the claimant's counsel and solicitors to prepare a draft order. The subsequent conduct of the parties is relevant to the decision and, therefore, it is necessary to provide some detail. The following events took place:

Edwards-Stuart J directed that the restored CMC hearing should go ahead. RPC asked the claimant to pay their costs incurred as a result of the claimant not agreeing to the order made by the court. The claimant objected. Among its grounds for objections was that this was contrary to the order reserving costs to the trial judge.

Edwards-Stuart J ordered that his previous costs order be varied so that the costs incurred in agreeing or drawing up the terms of the 23 November 2012 order would be excluded from the costs to be reserved to the trial judge. He then ordered the claimant to pay £6,925 in respect of the defendant's costs.

Edwards-Stuart J said that, when he made the costs order at the CMC, it had not crossed his mind that one party would seek to introduce fundamental changes to the order, and that it would take three and a half months to agree it.

If a party is required to draw up an order, the party's solicitors and counsel have a duty to produce a draft that fairly reflects what they think the judge decided or directed. Edwards-Stuart J said that the claimant's draft order had borne "almost no relation" to what he had directed at the CMC. RK had, the judge said, drafted an order that reflected the directions that they or their clients would have liked. This was wholly unacceptable: "it is not just unreasonable, it is verging on the contumelious" (paragraph 19, judgment). He also commented that RK's statement in its 16 January letter to the court was disingenuous.

The judge considered that RPC's draft order had reflected what he had ordered, and that RPC were wholly justified in resisting RK's amendments. In the circumstances, the defendant should not have to pay the costs that were quite unnecessarily incurred as a result of the claimant's conduct.

The facts of this case are highly unusual but, by making a costs order against the claimant, the judge has given a very clear warning to those involved in drafting interim orders.

(Paragraph 21, judgment.)

Where the parties cannot agree precisely what the court has ordered, they should raise the matter with the judge, who will usually be able to resolve the matter without a hearing.

Webb Resolutions Ltd v JV Ltd (t/a Shepherd Chartered Surveyors) [2013] EWHC 509 (TCC) (14 March 2013).