The Supreme Court Costs Office
No.12 of 2005
Birchall v Bullard
8 April 2005
Court of Appeal (Ward & Rix LJJ
The Claimant, a small builder who had agreed to build two large extensions to the Defendant's home in Bournemouth, fell out with his employers, and he accordingly left the site. The Defendants employed small sub-contractors to complete the works, and the Claimant brought proceedings against the Defendants for £18,000 odd, with the Defendants counterclaiming for a sum in excess of £100,000, of which £23,000 related to the roof, which the Defendants alleged needed to be "dismantled and reconstructed". The Claimant then brought in a sub-contractor as a Part 20 Defendant.
After various interlocutory hearings and a five day trial, followed by a reserved judgment, the Recorder awarded the Claimant £18,327.04, but gave judgment for the Defendants against the Claimant on the counterclaim for £14,373.15, so that the net sum payable by the Defendant to the Claimant was £5,025.63. He found that the cost of the repairs to the roof totalled only £3,985. Nevertheless, for reasons which he gave in his judgment, the Recorder entered judgment for the Claimant against the Part 20 Defendant for only £79.50. The Judge concluded that the Defendants should pay the Claimant his costs of the claim, but that the Claimant should pay the Defendant the costs of their counterclaim, and that the Claimant should pay the Part 20 Defendant's costs in full.
On appeal the Court of Appeal carefully analysed what had happened, and concluded that the Claimant was the overall winner, and that accordingly the Recorder had misdirected himself in relation to his costs order, and directed that the Defendants should pay the Claimant 60% of his costs of the claim, the counterclaim and Part 20 proceedings, and also 60% of his liability for the Part 20 Defendant's costs.
Lord Justice Ward, who delivered the leading judgment, describes the court's horror at the amount of costs that had been incurred in this relatively small case:
"23. On 20 July 2004 Waller LJ gave permission to appeal because it seemed to him "that an injustice may have been done in the way the costs orders work out". We explored this a little further when the appeal opened. As we had expected, an horrific picture emerges. In this comparatively small case where ultimately only about £5,000 will pass from the Defendants to the Claimant, the Claimant will have to spend about £65,000 up to the end of the trial, he will also have to pay the sub-contractors costs of £27,500. We were told that the Claimant might recover only 25% of his trial costs, save £16,000 because most of the contest centred on the counterclaim. The Defendants' costs of trial are estimated at about £70,000 and it was estimated the Claimant would have to pay about 85%, ie £59,500. Recovery of £5,000 will have cost him £136,000. On the other hand the Defendants who lost in the sense that they have to pay the Claimant £5,000 are only a further £26,500 out of pocket in respect of costs. Then there are the costs of the appeal - £13,500 for the Appellant and £9,000 for the Respondent. A judgment of £5,000 will have been procured at a cost to the parties of about £185,000 is that not horrific?