Kerry Underwood

COSTS PERMITTED TO BE CLAIMED AS DAMAGES

with 2 comments


Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Playboy Club London Ltd v Banca Nazionale Del Lavora SPA [2019] EWHC 303 (Comm) (21 February 2019)

the Commercial Court allowed an amendment to Particulars of Claim in deceit proceedings to include as a head of damages adverse costs incurred in respect of the defendant in these proceedings, that is the other party in the original proceedings.

Both the original proceedings, and the current ones, related to a credit reference relied upon by the claimant, the owner of a casino, and the original negligence claim succeeded in the High Court, but the Court of Appeal overturned that decision, and that finding of the Court of Appeal was upheld by the Supreme Court and thus the defendant won the claim and the claimant was ordered to pay the costs of the defendant.

The claimant then brought the current deceit proceedings and the defendant’s attempt to strike them out failed.

The proposed amendments in these proceedings pleaded that, although the claimant’s negligence claim had ultimately failed, it had at all relevant times at least a reasonable prospect of success, and that the claimant had acted reasonably in bringing and pursuing the claim and that the costs incurred formed part of the total costs exposure recoverable in the deceit claim.

The court recognised that damages are recoverable to a greater extent in a case of fraud, as compared with a claim in negligence, and found that the claimant had a more than merely fanciful prospect of success, and therefore it would be wrong to decide the question without a trial.

The defendant argued that, as a matter of principle, costs could not be recoverable as damages.

There was no authority involving costs of a previous legal action between the same parties, and where the claimant had been unsuccessful and had had costs awarded against it, being awarded damages in a subsequent legal action, to include those costs.

The defendant pointed out that the effect of this is to reverse the costs award previously made.

The court considered that although this was a novel and unprecedented claim which might be difficult to establish, the principle should not be determined without findings on all of the disputes of fact.

The matter should be decided at trial, and not by refusing permission to amend the pleadings, which would mean that the matter could not be argued at all.

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Written by kerryunderwood

March 6, 2019 at 7:12 am

Posted in Uncategorized

2 Responses

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  1. According to Dr Friston’s new book, its been tried many times before but never with success. See para 3.37 et seq.

    sarahjrobson

    March 6, 2019 at 12:57 pm

    • But he distinction between costs and damages is not always clear, as recognized by Dr Friston in the paragraphs preceding the ones quoted by you.

      kerryunderwood

      March 6, 2019 at 1:46 pm


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