The Supreme Court has ordered Mark Smith to pay the defendants’ costs of his unsuccessful appeal, while making no order for costs incurred in the High Court or Court of Appeal.
The ruling, delivered on 30 November 2023, concerned costs after the Court had dismissed Smith’s attempt to overturn the Court of Appeal’s decision that his negligence claim against his former solicitor was statute barred. The substantive appeal had been decided in May 2023. The costs ruling did not determine whether the solicitor had been negligent.
Smith had succeeded in the High Court on a preliminary issue about whether the limitation period barred his claim in tort. The Court of Appeal reversed that decision, and the Supreme Court declined to reinstate it. The defendants accepted that Smith’s contract claim was barred.
The fourth named defendant, Paul Kelly, sought his costs as the successful party. Smith opposed that application and sought his own costs, or a variation the Court considered fair. He argued that he had suffered loss connected with the conveyance of his house and had not known of the alleged negligence until the contract for sale was rescinded. He also said his case had clarified the law and raised a potential injustice in how limitation rules apply to claims for economic loss or property damage.
The Court said the usual rule is that the successful party recovers costs. Although exceptions exist, costs for an unsuccessful party have generally been awarded in particularly significant public-interest cases, often involving foundational constitutional or European law issues and proceedings against the State or State bodies. The Court concluded that the limitation issue in Smith’s case did not fall within that category and that the case was not marginal.
It also noted that Smith had not explained why proceedings were not brought within the statutory period, although he knew of his cause of action two years after it accrued. The Court emphasised that there had been no finding on whether Kelly was negligent.
The Court nevertheless gave Smith relief from some of the costs of the overall proceedings. It considered that clarification of the law would benefit solicitors and their insurers, and that Smith had been entitled to defend the favourable High Court ruling in the Court of Appeal. It therefore made no order as to costs for either lower court. But it ordered him to pay the costs of the appeal to the Supreme Court, finding that the Court of Appeal’s decision was clear and correct and that he had proceeded to appeal it.