The High Court has taken the proactive step of capping the costs of a litigant before they pursue an appeal through the Supreme Court.
Mr Justice Arnold said the claimant in Airways Pension Scheme Trustee Ltd v Fielder & Anor should be limited to the same costs as the defendant – in doing so shaving around £200,000 from the costs estimate.
The judge said the claimant’s request to have its costs subject to assessment on an indemnity basis did not go far enough because it did little to protect the defendant from excessive incurred costs.
The court should ‘seize the nettle now so that everyone knows where they stand’, said the judge. ‘It is deeply alarming that the trustee should be proposing to spend some £1.24m on an appeal raising a single point of law with a hearing lasting only 1½ days,’ he added. ‘I consider that it is necessary for the court to intervene to ensure that the trustee’s costs are kept within some semblance of reasonableness.’
The claimant is the trustee of the Airways Pension Scheme and the defendants a representative member of the scheme and British Airways itself. The judge was required to decide an application for Beddoe relief from the trustee, asking for cost protection when the wider dispute over discretionary benefits goes to the Supreme Court.
Mr Justice Arnold said the trustee, which lost in the Court of Appeal, was acting in the interests of the scheme as a whole by pursuing a challenge in the Supreme Court, and should therefore be entitled to indemnity costs from the assets of the scheme.
But the judge made clear this decision did not give the trustee ‘carte blanche’ to spend whatever it chose on the appeal.
The £1.24m estimate, of which £444,000 had already been incurred, was based on the assumption of a day and half’s hearing and does not include the costs of BA’s proposed cross-appeal. It also takes into account the instruction of two QCs and a junior.
BA estimates its costs at around £1m for a two-day hearing, with the intention of instructing one QC and two juniors.
The trustee has so far spent £12.86m on the main proceedings excluding the appeal, and the judge said it could be assumed BA had spent a similar amount.
The judge said he saw ‘no good reason’ why costs should not be the same for both parties. He recognised the trustee had incurred costs on taking advice, and would bear more costs as the appellant to the Supreme Court, but this should be a ‘marginal factor’.