Novak needs a Cost Expert: Costs in Appeal Hearings Explored

20 January 2022

Being an avid tennis fan, in the small hours of 16th January 2022, I checked my phone to see if Novak Djokovic was going to be able to compete for his 21st Grand Slam title (surpassing Roger Federer and Rafa Nadal as the most decorated male tennis player in Grand Slam history) or whether his appeal would in fact be rejected leading to his deportation.

I clicked a link to see a video of Chief Justice James Allsopp state:

The orders of the court are; (1) The amended application be dismissed with costs; such costs to be agreed or, failing agreement, assessed. (2) Reasons to be published at a later date.

When I started working in the legal profession someone said to me that I would see the world differently from everyone else (non-lawyers) from now on. Here was a perfect example of that. Whilst many will have focused on the dismissal of the application, which meant Djokovic was to be deported, I was struck by the comment “with costs”. I immediately thought, well he is going to have a tough time arguing against the level of the Minister’s costs (represented before Judge Kelly on the first application by just junior counsel and then one leader and one junior before the Federal Court on appeal) when he himself was armed with two Q.C.’s, junior counsel, a Serbian barrister and his firm of solicitors throughout. A proportionality tale for the ages, I thought.

If your client finds themselves within an appeal, the costs of the appeal process and the costs below can weigh heavy upon the handling of the next steps. Arguably tenuous segue from tennis into costs complete, I then thought of situations that we have encountered at Kingsley Napley with costs in appeal proceedings. My colleague, Fiona Simpson (also a tennis and costs ‘fan’) and I have had some interesting points arise over the last few years and so we thought this would be a good platform to look at this topic.

CPR 52.20 provides the appellate court with the power to make an order for costs both ‘here and below’ (with reference to PD 44 section 4.2). This means any order of the lower court in relation to costs can be reversed by the appellate court. That said, it is very important to note that pursuant to CPR 52.16, a decision of the lower court is not automatically stayed by the filing of an appellant’s notice or the granting of a permission application. Always make sure a stay of any costs provision is part of the permission application if that is required. When it comes to previous costs orders that may be impacted by any appeal decision but are not the subject of the appeal itself, the appellate court has ample power under section 15(3) of the Senior Courts Act 1981 to stay the payment of those costs (see Boxing Brands Ltd v Sports Direct International Plc & Ors (2015) [2015] EWCA Civ 185). No hawk-eye required for that one.

If you find that the appeal against your client seems to be a surreptitious way of avoiding payment then CPR 25.15 (security for costs of an appeal) is well worth considering. The purpose of an order for security for costs is to protect a party in whose favour it is made against the risk of being unable to enforce any costs order they may later obtain. The order, if complied with, will provide the party in whose favour it is made with a fund, normally held by the court, against which they can enforce any award of costs they may later obtain (CPR 25.12). The application may be made either in the respondent’s notice or, subsequently, by a separate application notice. According to the commentary in the White Book under 25.15.2 “The making of such an order may interfere with an appellant’s ECHR art.6(1) right of access to a court: …..The court should not order security for the costs of an appeal if to do so would stifle the appeal. However, if grounds for security for costs appear to have been established, it is for the appellant to satisfy the court, by evidence, that the effect of ordering security will be to stifle the appeal”. Wise words.

We have also seen situations where a failure to adhere to directions in appeal proceedings, such as the length and format of skeleton arguments, has led to costs sanctions. See Inplayer Ltd v Thorogood [2014] EWCA Civ 1511, where the Court of Appeal, having allowed the appeal with costs following the event, held that the appellant should not recover the costs of his skeleton argument, described by the court as “35 pages of rambling prolixity through which the reader must struggle to track down the relevant facts, issues and arguments”. The tennis equivalent of a double fault at break point.

If you have made a Part 36 offer during the proceedings below; don’t forget that under CPR 36.4(1) your offer does not carry over into the appeal proceedings itself. Making a fresh offer, also by way of Part 36, can give a client additional costs protection. In case you were wondering, an order for indemnity basis costs below does not automatically carry over into the appeal proceedings either. There is no presumption and the default order will be standard basis unless the court orders otherwise.

Lastly, something often overlooked, unless the appellate court directs otherwise or invites the respondent to make submissions at a permission to appeal hearing, the respondent will not be given an order for the costs of the permission application/hearing (see para 8 of PD 52B).

If, like Djokovic, you find that you are in appeal proceedings, as a lay client or a practitioner and the costs are overwhelming the subject of the actual appeal, this blog may give you the starting point to gain control of the costs situation.

About the authors

Michael Tyler is a Partner in our Costs & Litigation Management team. He has conducted costs proceedings at first instance and on appeal in the High Court and Supreme Court Privy Council. Michael is also a qualified legal project practitioner.

Fiona Simpson is a Partner in our Dispute Resolution team. She specialises in civil fraud litigation, advising clients bringing or defending civil fraud proceedings, often involving injunctions and often with an international dimension.  Fiona regularly advises on freezing orders and asset tracing. She is a recommended Global Leader in Who's Who Legal: Asset Recovery Global Guide 2021 and listed as a Thought Leader in the Who's Who Legal: GIR - Asset Recovery 2021 Guide. 


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