Wembley litigation costs judgment penalises parties for not settling

The costs judgment in Multiplex Constructions (UK) Limited v Cleveland Bridge UK Limited and another [2008] EWHC 2280 (TCC) (the Wembley litigation) establishes eight key principles which judges should follow when deciding costs. It emphasises that the general rule that the successful party is entitled to an order for costs is only the starting point in the exercise of the court's discretion. Also that proportionate costs orders are to be preferred to issue-based ones and the parties' approach to settlement as well as general conduct of the litigation is very important.

Multiplex was the overall winner of the dispute about the final account but was awarded only 20% of its costs of the action. After each element of the claim was considered separately, Multiplex had been awarded 10% of the costs but this figure was doubled for the final award after the judge looked at the entirety of the parties' conduct of the litigation. Both parties were criticised for not taking opportunities to settle the dispute. The judgment strongly suggests that large-scale construction litigation like this over a final account should be settled.

Note added 24.02.10: the Court of Appeal has allowed appeals on three of the grounds it was asked to consider (see Legal update, Appeals allowed in Multiplex v Cleveland Bridge).