The Court of Appeal has restored the Minister for Public Expenditure and Reform’s full High Court costs after allowing the Minister’s appeal in a public procurement case brought by Word Perfect Translation Services Ltd.
In a judgment delivered on 27 July 2023, Ms Justice Donnelly said the High Court had erred by treating the most cost-effective way of conducting litigation as the starting point when deciding whether an entirely successful party should receive its costs.
The underlying proceedings concerned Word Perfect’s challenge to a State request for tenders for Irish translation services. The Minister argued that Word Perfect was not eligible to bring the challenge because it had not submitted a tender. The High Court upheld that preliminary objection and did not decide Word Perfect’s three substantive claims. The eligibility ruling was subsequently upheld on appeal.
When awarding costs, the High Court gave the Minister 50 per cent of her costs. It considered that the Minister could have asked for the eligibility issue to be decided in a preliminary motion, potentially avoiding a trial of the substantive claims. Word Perfect had argued that the issue was discrete and its relevant facts were not disputed.
The Court of Appeal held that section 169(1) of the Legal Services Regulation Act 2015 starts from an entirely successful party’s entitlement to costs, unless the court orders otherwise. A court may consider the nature and circumstances of the case and the parties’ conduct, including whether it was reasonable to raise, pursue or contest issues. The section does not require a successful party to prove that it conducted litigation in the most cost-effective manner possible.
The court said cost-effectiveness can be relevant to assessing whether a party’s conduct was reasonable. It was open to a court to find that failing to seek an early ruling on a preliminary issue was unreasonable, but that assessment must be objective and take account of the circumstances, including urgency, without the benefit of hindsight.
In this case, the High Court had expressly said it did not criticise the Minister’s decision not to seek a preliminary ruling. The Court of Appeal concluded that the High Court had asked the wrong question when reducing costs and allowed the Minister’s appeal. It ordered that the Minister receive her full High Court costs.
Word Perfect’s cross-appeal, which challenged the calculation behind the 50 per cent award, was dismissed because it no longer arose. The Court of Appeal said the Minister appeared entitled to the costs of the appeal; Word Perfect could seek a short hearing on that issue by applying to the Registrar by 8 September 2023.