Resisting Costs Awards

In James v Watters & Shortall [2023] IECA 144, the Court of Appeal recently rejected arguments by an unsuccessful litigant who sought to avoid an adverse costs award by relying on arguments not within the scope of Section 169(1) of the Legal Services Regulatory Act 2015 (the “2015 Act”).

Order 99 of the Rules of the Superior Courts governs the position in respect of costs and provides at rule 2(1) that, subject to statute (including sections 168 and 169 of the Act), costs are at the discretion of the Court. However, Order 99, rule 3(1) circumscribes that discretion somewhat by providing that, in considering the award of costs, the Court is obliged to “have regard to the matters set out in section 169(1) of the 2015 Act”. Section 169(1) of the 2015 Act sets out the general proposition that a party who is entirely successful in civil proceedings should be entitled to an award of costs as against the unsuccessful party, unless the Court orders otherwise. In considering whether to order otherwise, it provides that the Court is to have regard to “the particular nature and circumstances of the case” and “the conduct of the proceedings by the parties”, including by reference to some seven specified criteria, outlined at sub-sections (1)(a) to (g).

In her costs ruling on behalf of the Court of Appeal, Butler J referenced the existence of these criteria, but further observed that those “factors are not necessarily exhaustive and may or may not be relevant to the circumstances of the individual case”. She then commented that the written submissions on costs of the plaintiff/appellant did not advance any grounds specified within those listed at Section 169(1) of the 2015 Act. Rather, those submissions relied on two grounds not amongst the seven specified criteria, namely (i) that the substantive decision was legally incorrect and (ii) the poverty of or hardship upon plaintiff/appellant. In the first regard (and notwithstanding that any unsuccessful litigant likely holds the same view), Butler J noted that any decision on costs has to be made on the basis of the judgment as given and not on the basis the party involved believes they may have a successful appeal. In the second regard, the Court noted that the hardship complaint was in fact inconsistent with the case made by the appellant in the substantive proceedings. Irrespective, Butler J held that the fact a person may not have the means to discharge a costs order does not have a bearing on whether it is appropriate to make an order for costs against them. Rather, the ability to successfully execute a costs order is separate to whether such an order should be made. Accordingly, Butler J, with whom the other two judges agreed, was satisfied to make an order against the appellant for the costs of the appeal, with a stay on execution to accommodate leave to appeal to the Supreme Court being sought.

The decision is interesting in that, although Butler J did acknowledge that the factors relevant to the award of costs identified at Section 169(1) were not exhaustive and may not be applicable, it was clear that the non-statutory grounds relied on here by the appellant did not find favour with the Court of Appeal as a basis to deviate from the general principle of costs following the event. Whilst greater clarity is still awaited as to what non-statutory grounds may warrant costs not following the event, what is apparent from the judgment is that the starting point for submissions seeking to persuade a Court not to follow the general principle should be the statutory grounds at Section 169(1) of the 2015 Act. A party who fails to rely on one or more of them to the extent applicable runs the risk, as the appellant here found out, that non-statutory grounds may be unpersuasive.