Legal Apportionment

Dyson Technology Ltd v Ben Strutt [20071 EWHC 1756 Patten J

The appellant had sought an injunction restraining the respondent from acting in breach of a restraint of trade covenant in his contract of employment and from disclosing confidential information. That part of the claim, based on the confidential information element, was discontinued and the action finally proceeded on the restrictive covenant element. The court ultimately granted the injunction enforcing the covenant and the respondent was ordered to pay the appellant's costs of the action save for three specific items of costs concerning the confidential information claim.

The common costs were non specific costs such as travelling expenses which were general to the action and did not relate to the handling of any particular issue. The specific common costs, such as the preparation of witness statements and research, related to work done on more than one issue in the case but which were not separated for the purpose of charging out time or as disbursements. The Costs Judge determined that the general costs should be split between the parties and that costs that covered both issues of confidential information and breach of covenant should be divided in proportion to the time spent on each, with the appellant bearing the costs of work done in relation to confidential information. It was contended that where, as in this case, the costs of the action were awarded to one party with the exception of costs relating to a particular matter or issue, the party in whose favour the costs of that issue were awarded was not entitled to recover anything except the extra costs generated by that issue and that the respondent was therefore entitled to the costs solely attributable to the confidential information claim, not to costs that were incurred and were equally attributable to both elements of the claim.

Patten J held that the Costs Judge should not have apportioned that the costs of work all of which was relevant to both elements of the claim, Medway Oil applied. The Judge had been wrong to divide the general costs. The fact that those costs would have been incurred, even if only the restrictive covenant claim had been brought, required them to be treated as costs of the action and not costs referable to the confidential information issue. It was noted that there was much to be said for the application of the general rule that costs should follow the event and for keeping to the simple formula of orders for a stated proportion of the costs or a stated amount of the costs in cases where recognition of limited degree of success by one party or the other was called for.

Medway Oil principles is an important development in this post CPR era It is not open for the Costs Judge to carry out a "some kind of ex post facto analysis of what was the minimum amount of evidence needed to support the claim". Unless a trial Judge has disallowed the costs of particular evidence the Costs Judge should assume that the evidence called was relevant to the claim.