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England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Citation Plc v Ellis Whittam Ltd  EWHC 764 (QB) (28 March 2012)
Cite as:  5 Costs LR 826,  EWHC 764 (QB)
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| Citation Plc
|- and -
|Ellis Whittam Ltd
Jane Phillips (instructed by Robin Simon) for the Defendant
Hearing date: 14 March 2012
Crown Copyright ©
Mr Justice Tugendhat :
"had achieved by 13 October 2011, when it issued its claim form, and in any event by 28 October 2011, when it served its claim form, was in practice all that it could achieve which would be of any value to it in vindicating its reputation" (para ).
"it would not be an abuse of the process of the court for a claimant to decline to settle the dispute in question, notwithstanding that he had been offered all that he was entitled to by way of substantive relief, unless the offer included an acceptable offer in relation to costs. In such a situation, it would be perfectly proper for the claimant to decline the offer, commence proceedings and leave the defendant to decide whether to concede the claim for substantive relief in the context of the litigation. As has frequently been observed judicially, costs are, regrettably but in current conditions inevitably, often the most significant elements of a party's claim."
"(2) If the court decides to make an order about costs
(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
(b) the court may make a different order
(4) In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and
(c) any payment into court or admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply.
(5) The conduct of the parties includes
(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction (Pre-Action Conduct) or any relevant pre-action protocol;
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;...
(6) The orders which the court may make under this rule include an order that a party must pay ...
(c) costs from or until a certain date only;
(d) costs incurred before proceedings have begun; ".
"(1) This rule sets out a procedure which may be followed where (a) the parties to a dispute have reached an agreement on all issues (including which party is to pay the costs) which is made or confirmed in writing; but (b) they have failed to agree the amount of those costs; and (c) no proceedings have been started."
"5. Section 51 of the Supreme Court Act 1981 provides as follows:
(1). Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to the proceedings in b. The High Court, shall be in the discretion of the court.
6. Mr Stewart QC submitted that the costs incurred by a party in complying with any Pre-Action Protocol are capable of being costs "incidental to" any proceedings which are subsequently commenced if the Protocol procedure fails to lead to an early settlement. I did not understand Miss Garrett to dispute that, as a matter of principle, costs incurred during a Pre-Action Protocol procedure may be costs "incidental to" any subsequent proceedings. In my judgment, it seems clear that, as a matter of construction of Section 51, the costs so incurred are capable of being costs "incidental to" the proceedings.
7. I am fortified in this view by the decision of Sir Robert Megarry, Vice Chancellor, in the case of In re Gibson's Settlement Trusts  Ch 179. In that case the Vice Chancellor decided that, on an order for the payment of costs of proceedings, costs incurred before the proceedings commenced would not be disallowed solely on that account. He said that "on an order for taxation of costs, costs that otherwise would be recoverable are not to be disallowed by reason only that they were incurred before action brought". He also made plain that the words "incidental to" extended, rather than reduced, the ambit of any order, although he said that it was important to identify what the proceedings were in any case and how and why the costs claimed were incidental to those proceedings. As to costs incurred before the proceedings commenced he said :
"Of course, if there is no litigation there are no costs of litigation. But if the dispute ripens into litigation, the question then arises how far the ambit of the costs is affected by the shape that the litigation takes".
8. As I have already noted, there is no direct authority on the question of the general recoverability of costs incurred in compliance with Pre-Action Protocols. However in Callery v Gray  1 WLR 2112, the Court of Appeal were concerned with what costs were recoverable in circumstances where claims had settled without the need for substantive proceedings. At paragraph 54 of his judgment, Lord Woolf CJ said:
"(2) Where an action is commenced and a costs order is then obtained, the costs awarded will include costs reasonably incurred before the action started, such as costs incurred in complying with a Pre-Action Protocol".
9. Accordingly, both as a matter of construction of Section 51, and by reference to In re Gibson's Settlement and to Callery v Gray, I am of the view that, as a matter of principle, the costs incurred in complying with a Pre-Action Protocol may be recoverable as costs 'incidental to' any subsequent proceedings. Whether or not a particular item of Pre-Action Protocol costs can properly be described as having been incurred 'incidental to' the proceedings will, of course, be a matter of fact and assessment on each occasion."
"Section 6 [of the Human Rights Act] requires a court, as a public authority, to administer the law in a manner which is compatible with Convention Rights, insofar as it is possible to do so. Keeping a proper balance between the Article 10 right of freedom of expression and the protection of individual reputation must, so it seems to us, require the court to bring to a stop as an abuse of process defamation proceedings that are not serving the legitimate purpose of protecting the claimant's reputation, which includes compensating the claimant only if that reputation has been unlawfully damaged".
" Jameel was also applied by this court in Khader v Aziz  EWCA Civ 716 where it was held (para 32) that the appellant 'would at best recover minimal damages at huge expense to the parties and of court time'.
42. The principle identified in Jameel consists in the need to put a stop to defamation proceedings that do not serve the legitimate purpose of protecting the claimant's reputation. Such proceedings are an abuse of the process. The focus in the cases has been on the value of the claim to the claimant; but the principle is not, in my judgment, to be categorised merely as a variety of the de minimis rule tailored for defamation actions. Its engine is not only the overriding objective of the Civil Procedure Rules but also in Lord Phillips' words, ' a need to keep a proper balance between the Article 10 right of freedom of expression and the protection of individual reputation' .".
"Where a defamatory statement has received insignificant publication in this jurisdiction, but there is a threat or a real risk of wider publication, there may well be justification for pursuing proceedings in order to obtain an injunction against republication of the libel."
"The purpose of an award of damages in such a case as this is vindication of a claimant's reputation. Where there has been no slander to the public at large, but only to an unknown number of prospective clients, vindication in the form of a public judgment following a trial is unlikely to be necessary, or of value, since it would involve public repetition of the words complained of."