The High Court has recently considered whether it should delay making a final decision on costs until the conclusion of other legal proceedings. Although it is common to delay interim cost orders until the main proceedings are resolved, this case was unique because it involved a request to postpone the decision until completely separate proceedings were concluded. Commercial Disputes partners, Gearoid Carey and Gerard Kelly examine why the outcome of the decision implies that postponing cost orders in these situations is unlikely to be approved.

The High Court has recently looked at a request made after the substantive legal proceedings were decided, to delay or put off the costs awarded to the defendant until the plaintiff's separate proceedings reached a conclusion.[1]

A stay or deferral normally means the costs award could not be enforced during the stay/deferral period. While stays/deferrals of interim costs orders when the substantive result is awaited are common, seeking a stay or deferral following the conclusion of proceedings is unusual unless there is an appeal. However, that is exactly what Judge Heslin was asked to do in this case which led him to consider the appropriate basis for imposing a stay/deferral on a substantive costs award.

Background

The plaintiff in this case brought personal injury proceedings against the defendant. However, the plaintiff’s solicitors had failed to secure authorisation from the Personal Injuries Assessment Board (PAIB) within the relevant statutory period. As a result, the High Court determined that the substantive proceedings were statute-barred. When the issue of costs came before the High Court, the defendant argued that the normal rule, where costs should be awarded to the successful party, should apply in this instance. Since the defendant was completely successful, they believed they should be awarded their costs. However, the plaintiff submitted that the costs should be subject to a 36 month stay/deferral to allow professional negligence proceedings against the plaintiff’s former solicitors to conclude. The plaintiff argued that, if the costs order was not deferred, he would suffer prejudice as a result.

Decision

The thrust of the plaintiff’s submission was that until the professional negligence proceedings were successfully determined in his favour, any costs order against him was effectively worthless to the defendant. However, the court’s discretion regarding costs was not absolute. Rather, the exercise of discretion regarding costs must be undertaken within statutory ‘guardrails’. Judge Heslin recited section 169(1) of the Legal Services Regulation Act 2015 which provides that, in general terms and subject to certain statutory exceptions, a party who is entirely successful in civil proceedings is entitled to their costs. Here, there were no circumstances which would justify a departure from the normal rule. In fact, the plaintiff had insisted on the determination of a preliminary issue even though, since December 2022, he was aware his claim was statute-barred due to an oversight or omission by his former solicitors.

Judge Heslin also referred to the Supreme Court decision in Godsil v Ireland[2] where the important role costs play in the administration of justice was highlighted. The Court of Appeal in Permanent TSB Group v Skoczylas[3] was also cited by Judge Heslin. He referenced Judge Collins’ observation, in particular, which considered the question of a stay on costs orders that “the making of [a] costs order would be an entirely hollow protection for successful litigants if such order were not, in general, immediately enforceable.”

The plaintiff’s application here, said Judge Heslin, sought to bring about that entirely hollow protection of a stayed costs order. Although a stay of costs order regarding substantive proceedings was not limited to the situation where an appeal was brought, the onus of establishing a stay was required in the interests of justice and lay with the plaintiff in this case.

Here, the court was not convinced that the burden of proof had been met. The fact that the plaintiff was seeking a delay while other proceedings, in which the defendant was not involved, were ongoing did not automatically preclude the plaintiff from getting the relief they wanted. However, the High Court's decision was intended to conclude the plaintiff's case against the defendant. The outcome of the High Court's decision against the plaintiff, along with the plaintiff's confirmation that they would not appeal it, militated against delaying or deferring the costs order.

Instead of the plaintiff being unfairly affected by not delaying the proceedings, the court decided that refusing to let the defendant enforce their costs order would clearly harm the defendant. Ultimately, fairness demanded that the defendant obtained a costs order in their favour, and it would be very unfair to postpone the costs order for 36 months to wait for legal proceedings that the defendant wasn't part of and couldn't influence to conclude. Moreover, the plaintiff's involvement in other legal cases was not enough to prove that delaying the proceedings was necessary for justice.

Conclusion

This decision confirms that, in principle, a costs award from substantive proceedings can be delayed or deferred, not just only in the case of an appeal. However, the burden is on the applicant to prove that delaying the costs obligation is appropriate in the interest of justice. Given the prejudice likely to be suffered by the party who is otherwise entitled to their costs as a result of a stay/deferral, demonstrating it would be in the interests of justice is likely to be difficult to meet. For an applicant to succeed, they would need to show that they would suffer more significant prejudice if the stay/deferral were not ordered. More than mere assertion regarding the existence of prejudice would need to be shown and that party’s own conduct during the proceedings is also likely to be a relevant consideration.

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[1] Murphy v Foley [2023] IEHC 737

[2] [2015] IESC 103

[3] [2020] IECA 152