Costs – the “normal” rule
Order 99, r.1(3) of the Rules of the Superior Courts lays down the “normal rule” that costs follow the event unless the Court, for special reasons, otherwise directs. There have been a number of recent decisions in the area of costs that illustrate the various complexities of the oft cited Order 99.
If you are a not a party to a case can you be made liable for the costs?
The Supreme Court in Moorview Development Limited & ors v First Active Plc & ors IESC 33 confirmed that a non-party can be made liable for the costs of proceedings where he has funded those proceedings.
This case was an appeal from a decision of the High Court where Clarke J. had made an order against the developer Brian Cunningham in relation to long standing litigation by a group of companies owned and controlled by him against First Active Plc. The High Court order was made in 2011 (see here) and Brian Cunningham was made liable for the costs on the grounds that he funded (and directed) the litigation. This decision became known as a “Moorview Order” but had not received an endorsement from the Supreme Court until now.
Before the Supreme Court issued its decision the Court of Appeal had overturned a High Court decision awarding costs against a non-party. In WL Construction Limited v. Chawke IECA 113 Hogan J. had stated that a non-party witness could not be joined to proceedings after a judgment had been issued purely to award costs against him where he was not put on notice during the proceedings that he could be made liable for costs. Hogan J. questioned the correctness of the High Court Moorview decision and stated ultimately even if Moorview was correct that the jurisdiction to award costs against a non-party was an exceptional one.
Now that the Supreme Court have issued their decision it is settled the High Court have jurisdiction to make an order against non-parties generally subject to the various factors identified by the Court for consideration in such circumstances.
Can you deny a party the majority of their costs?
In Lowry v. Moriarty IECA 66 the Court of Appeal considered whether the Tribunal of Inquiry into certain Payments to Politicians and Related Matters, (the Moriarty Tribunal) was correct when it decided that Mr. Lowry should only recover one third of his costs on the basis that he had not fully co-operated with the Tribunal. Mr. Lowry had sought to judicially review the decision of the Tribunal but had been refused leave by the High Court.
Generally every person appearing before a Tribunal of Inquiry by solicitor or counsel has an entitlement to be reimbursed by the State his or her costs of so appearing.
The Court of Appeal considered the issues in a lengthy judgment and found that the reduction of costs to which Mr. Lowry had an entitlement had not been detailed or reasoned and that Mr. Lowry had not been given an opportunity to address the quantum of the reduction. The Court of Appeal did not take issue with reducing the costs to which someone had an entitlement for non-cooperation, but outlined that there must be a detailed and rational approach to this decision.
Wasted costs orders
This sort of costs order is provided for under Order 99 Rule 7 and it allows the Court to impose the costs of the proceedings on the solicitor personally in cases where there has been misconduct, clearly pointless litigation or a lack of good faith.
In 2012 Mr. Justice Hogan in the High Court stated that the:
“…wasted cost procedure could become an instrument of oppression in the hands of the wealthy or the powerful or the vested interests who, for example, feared legal change being brought about by ground-breaking litigation.” (Ho v Minister for Justice IEHC 231)
However there appears to be a growing trend towards their imposition; a number of recent cases considered their applicability.
In PO v Minister for Justice IR 164 a wasted costs order was made by the Supreme Court where Charleton J. held that while strong advocacy is to be admired, “floating points that dissolve on first consideration is a misuse of court time and of the costs necessary in answering them.”
In re Dunnes Stores; Dunnes Stores v. Taculla Ltd IEHC 346 a wasted costs order was made in the High Court against Taculla Ltd where it had furnished affidavit evidence so late that the hearing date had to be adjourned.
Further in Bebenek v Minister for Justice IEHC 323 Keane J. in the High Court considered the inherent jurisdiction to make a wasted costs order where the behaviour of the lawyers fell below the minimum professional and ethical standard even in last minute applications.
And Finally…Open Offers
The decision of the High Court in O’Reilly & Anor v Neville & Ors IEHC 228, has already been discussed here and it provides a reminder that as a plaintiff there may be adverse costs consequences where one side makes genuine efforts to settle and the other side do not engage.
Legal Costs not always a simple formula
All of these decisions are a reminder that any apparently simple rule always has an exception. Both litigants and their lawyers should be mindful of the conduct of proceedings and the fact that costs are not necessarily a foregone conclusion even if you win your case.
Contributed by: Catherine Thuillier
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