Party pays fees for case doomed to fail

Wates Construction Company v HGP Greentree - AllChurch Evans (Queen's Bench Division - 10 October 2005)

This case arose out of proceedings commenced against Wates Construction Company by Waitrose following the collapse of a roof due to a build-up of rain water, built by Wates Construction. Wates Construction had engaged the services of HGP Greentree AllChurch Evans to design the drainage system.

Wates Construction denied the claim and brought Part 20 proceedings against HGP. On the first day of trial, Wates Construction agreed to discontinue and pay HGP's costs. The court had to decide what the basis for the assessment of those costs should be.

A joint discussion of the experts confirmed the defects in the drainage system were down to the construction and not the defect. The court found that Wates Construction should have known then that a Part 20 claim was going to fail. Prior to trial, HGP had invited Wates Construction to discontinue and pay its costs on a standard basis.

The court held that to maintain a claim that is, or is likely to be, doomed to fail on the facts and on the law is conduct that is so unreasonable as to justify an order for indemnity costs. Wates Construction was ordered to pay HGP's costs on a standard basis up to the date when the experts produced their joint report and then on an indemnity basis from that date onwards.

Comment: This decision demonstrates the willingness of the court to impose costs penalties on a party where it has acted unreasonably in pursuing a claim that has no reasonable prospects of succeeding. This principle must apply equally to a defendant who maintains an unsustainable defence. Christopher Prescott, BLM Liverpool

These law reports are contributed by insurance law firm Berrymans Lace Mawer (

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