The Supreme Court made no order for costs after reducing a High Court award of €600,000 in damages for sexual assault to €350,000. The appeal concerned the assessment of damages only.
The defendant, identified in the judgment as S. M., sought his costs of the appeal. Counsel for the plaintiff, identified as M.N., did not seek the plaintiff’s appeal costs, but submitted that neither side should receive a costs order.
In a judgment delivered on 5 May 2005, Mr Justice Geoghegan said there was no single solution for costs when an appeal limited to damages resulted in a reduced award. A plaintiff may have done nothing wrong yet face a lower award and the cost of their own lawyers. A defendant who wins a reduction may also see much of its benefit consumed by legal costs.
The judge said the usual rule that costs follow the event would apply in most cases, but the court retained discretion where that rule could cause hardship. He declined to set absolute rules, saying each appeal had its own circumstances.
He suggested that parties could make offers after trial in letters marked “without prejudice” except as to costs. A defendant could offer a sum and state that the letter might be relied on in a later costs application if the appeal reduced the award to that sum or less. A plaintiff could make a corresponding offer and seek to rely on it if the appeal reduction left an award at or above the offered amount. The judge said this practice, used in other jurisdictions, should also be used in Ireland.
The judgment said defendants could make such offers even if they had not made a lodgment, or had made one the defendant later considered inadequate. A defendant who had lodged money could also make a higher offer. These offers could help address costs disputes, the judge said, but would not create an automatic rule.
In this case, the reduction was substantial, and the defendant’s financial position meant there was no realistic prospect that an offer involving a lower award would have been acceptable to the plaintiff. The judge concluded that making no order for appeal costs was fairest in the circumstances.
He added that the suggested approach should not fetter the discretion of judges hearing circuit appeals. Those appeals are full rehearings, he said, and different principles apply. The judgment records that he had sometimes awarded appeal costs to a plaintiff in a circuit appeal despite a reduction in damages.