The High Court has declined to follow the “party who writes the cheque” approach in a case where the claimant recovered less than one per cent of the amount of damages it sought and failed in two of the three pleaded causes of action. Read more >
In Pepe's Piri Piri Ltd v Junaid & Others  EWHC 2769 (QB) (“Pepe's”) the claimant sought damages alleging conspiracy to procure a breach of contract, unlawful interference with the claimant’s business and procuring a breach of contract. The claim was for just over £500,000. The claimant failed in its claim for conspiracy and unlawful interference but the claim for procuring succeeded. The claimant was awarded damages in the sum £2,523.07.
In making a costs order courts must: (1) have regard to the general rule that the unsuccessful party will pay the costs of the successful party (2) identify the unsuccessful party (3) consider whether to depart from the general rule by applying exceptions to it.
One line of authority suggests simply following the money; the unsuccessful party is the one who writes the cheque at the end of the case (Day v Day  EWCA Civ 415). In Fox v Foundation Piling Ltd  EWCA Civ 790 the Court of Appeal held in a case in which the sum awarded represented a small proportion of the overall claim, that the claimant was nonetheless the successful party and the party writing the cheque at the end of the case cannot complain if he does not protect himself with a Part 36 offer.
A second line of authority suggests then court must look closely at the facts of the particular case and ask: who, as a matter of substance and reality, has won? It may be the party writing the cheque was the overall winner in all the circumstances (Roache v Newsgroup Newspapers Limited  EMLR 161; Oksuzoglu v Kay  2 All ER 63l; Medway Primary Care Trust v Marcus  EWCA Civ 750).
The position has been complicated by the fact that Medway and Fox were heard by differently constituted panels of the Court of Appeal only a week apart and with conflicting decisions.
In Pepe's the High Court followed the Roache, Oksuzoglu and Medway line of authority and held that the defendants were the successful party.
Tim Welch acted for defendants’ 3 to 9.