Court of Appeal: ‘Entirely successful’ party not required to show litigation conducted in most cost-effective manner before receiving full costs
The Court of Appeal has determined that the a party which is “entirely successful” in proceedings was not required to show that it had conducted litigation in the most cost-effective manner before being entitled to its full costs. The High Court had determined that the Minister for Public Expenditure and Reform was only entitled to 50 per cent of his costs despite winning the case.
About this case:
- Citation: IECA 189
- Court:Court of Appeal
- Judge:Ms Justice Aileen Donnelly
Delivering judgment for the Court of Appeal, Ms Justice Aileen Donnelly determined that the High Court had erred in holding that the starting point for the assessment of costs was whether the parties had conducted litigation in a cost-effective manner. Instead, the starting point was that an entirely successful party was entitled to their costs.
A court may refuse to award full costs having regard to the particular nature, circumstances and conduct of the litigation, but there was no rule that litigation must be conducted in the most cost-effective manner possible, the court said.
The plaintiff, Word Perfect Translation Services Limited, issued proceedings against the Minister challenging the legality of a request for tenders regarding Irish translation services. The plaintiff relied on three substantive grounds which primarily concerned issues of EU law.
At the hearing of the action, the Minister denied each of the substantive points, but also made a preliminary objection to the plaintiff’s standing to bring the case. In short, it was said that Word Perfect was not eligible to bring the challenge because it had not submitted a tender and was therefore not an “eligible person” within the Public Procurement Remedies Regulations.
In February 2022, the High Court held in favour of the Minister on the preliminary issue and therefore did not consider the three substantive grounds of challenge. The decision was upheld on appeal.
Thereafter, the matter returned before the trial judge to deal with the costs of the proceedings. Word Perfect argued that the Minister should have brought a preliminary motion on the eligibility point prior to the trial as this would have avoided a waste of court time and money for the parties. In this regard, the plaintiff pointed to Order 84A RSC which allowed a party to bring a motion to dismiss a challenge to a public contact.
The High Court (Twomey J.) determined that the Minister was “entirely successful” in the proceedings and made clear that there was no criticism of the manner in which the case was conducted by him. However, the court took the view that parties were required to conduct litigation in the most cost-effective manner possible. The court held that this was not done in the present case and awarded the Minister 50 per cent of the costs.
In reaching this decision, the trial judge relied on Chubb v The Health Insurance Authority  IECA 183, Somers v Kennedy  IEHC 78 and Ryanair v An Taoiseach  IEHC 673.
The Minister appealed the decision to the Court of Appeal. The specific issues before the court were whether there was a requirement under section 169 of the Legal Services Regulation Act 2015 for parties to conduct litigation in the most cost-effective manner. This included whether the “conduct of the parties” concerning litigation misconduct also involved the cost-effectiveness of proceedings. Additionally, the question of whether cost-effectiveness was a “starting point” for the exercise of a trial judge’s discretion to award costs.
Court of Appeal
Ms Justice Donnelly engaged in an extensive analysis of the trial judge’s decision and the decisions in the Chubb, Somers and Ryanair cases. The court noted that the trial judge had begun his assessment by considering whether the case had been conducted in the most cost-effective manner possible.
Having regard to the wording and structure of the High Court judgment, the court was satisfied that the trial judge had concluded that a court was obliged to ask in every case whether litigation had been conducted in a cost-effective manner. Moreover, the trial judge had determined that this was the “starting point” for determining the question of costs, the court said.
The court said that this assessment was a “very far-reaching proposition that may lead to unintended consequences and possible injustices”. The court said that this statement of principle mandated “a very significant change of approach to an award of costs”.
The court reiterated the wording of section 169 LSRA 2015 which allowed a court to make an order that an entirely successful party was not entitled to their full costs “having regard to the particular nature and circumstances of the case, and the conduct of the proceedings by the parties”. The court observed that while section 169 outlined factors to be considered, there was nothing in the section which required ligation to be conducted in a cost-effective manner.
However, section 169 provided that the “starting point” was that an entirely successful party was entitled to their costs, although a court may order otherwise. The section also set out a non-exhaustive list of matters that may be considered when assessing the conduct of the parties.
Importantly, it was held that the 2015 Act did not impose a requirement on a successful party to demonstrate that it had conducted litigation in a cost-effective manner, the court said. As such, the trial judge had erred by holding that the starting point to the issue of costs was the cost-effectiveness of the Minister’s actions.
While a failure to move by way of preliminary application was a factor that may be taken into account, the test was “not one that amount to the imposition of a rule on a party to conduct proceedings in the most cost-effective manner possible”. Instead, the test was whether the approach taken on the preliminary issue was objectively reasonable in the circumstances of the case.
The court emphasised that a “costs hearing ought not to be an exercise in nit-picking and a broad-brush-stroke approach must be taken. If it is not, there is a danger that costs applications will spiral out of control and have implications for the overall administration of justice.”
As such, the court was satisfied that the trial judge had erred in considering the costs of the hearing.
In the circumstances, the Minister’s appeal was allowed. In light of the trial judge’s finding that the Minister was entirely successful, he was granted the full costs of the High Court. The Minister was also entitled to the full costs of the appeal, although the court allowed Word Perfect an opportunity to contend otherwise.
Word Perfect Translation Services Limited v. The Minister for Public Expenditure and Reform  IECA 189