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The Appellant driver (A) appealed against a Costs Order made at the conclusion of a liability trial arising from an RTA with the Respondent lorry driver (R). Following the accident, both parties had intended to issue personal injury claims; however, A did so first. The parties formally agreed that the issue of liability would be determinative of A's claim and of R's intended claim, without the need for R to issue separate proceedings or a counterclaim. A made two Part 36 Offers; first for 75 per cent in his favour and subsequently for a 50:50 split; R refused both and the matter proceeded to trial on liability as a preliminary issue. The Judge determined that A should recover 35 per cent of the value of his claim and that R should recover 65 per cent of the value of his claim. Prior to the Judge making a determination on costs, Counsel for R conceded that a counterclaim had not been made, but made reference to "a claim by the wayside." Consequently, the Judge in exercising his discretion under CPR 44.3(4) determined that A should recover 35 per cent of his costs in line with the ruling on liability, as justice was best served by doing so.
A submitted on appeal that it was not open to the Judge to consider R's notional cross-claim as there was no real evidence of it before him save for R's fleeting reference to having "a claim by the wayside", and that, as liability had been established in A's favour, albeit in a reduced fashion, he was entitled to all of his costs.
Although there was no explicit reference in the Judge's determination to R's cross-claim when making the Costs Order, it was clear from his decision to apportion costs in the same proportion as liability that he had had it in mind. R had made it sufficiently clear to the Judge that, although he did not have a formal counterclaim, he did have a claim "standing by the wayside", thus making the issue of liability relevant to the cross-claim. Further, A had had ample opportunity to make submissions on costs and had understood the argument advanced by R in relation to the notional cross-claim, but failed to make submissions to the contrary. The Judge had correctly exercised his discretion and it was clear that he had had proper regard to the claim and notional cross-claim when making the order for costs.