In Bellamy the Judge highlighted that there is no mandatory “no costs” rule in the Small Claims Court under the Rules of the High Court of Justice 2009 (the Rules), but that Rule 11.21 does contain certain restrictions. In this regard, Rule 11.21 states that the Court in a small claims case may not make a costs order to pay the other part’s costs, save for the following:
- The court costs for issuing the claim;
- In regards to an injunction or specific performance claim, the costs associated with legal advice and assistance;
- In personal injury cases, costs associated with legal advice;
- Court fees;
- Reasonably incurred travel expenses of any of the parties or any witness;
- A maximum of £50 per day for loss of earnings in attending the hearing;
- Fees for an expert; and/or
- Where a party has behaved unreasonably, the Court may award such further costs as it deems appropriate.
In Bellamy both sides were seeking reimbursement of legal costs due to allegations that the other party had acted “unreasonably”. The Judge highlighted that unreasonable behaviour is not defined within the Rules, but that the previous case of RPS Consultants Ltd v Hexagon Enterprises Ltd set out a non-exhaustive list with what may constitute “unreasonable behaviour” including:
- Speculative and an unsupportable case;
- An untruthful defence;
- Rejection of a settlement offer which is manifestly to the advantage of the offeree; and/or
- Failing to submit an appropriate defence.
Having carefully considered matters the Judge held that whilst there was some substance to criticisms raised by the parties these were insufficient for either party to prove that the other had acted unreasonably.
This decision is helpful in illustrating the limited costs which are recoverable in the Small Claims Court and the relatively high barrier which must be met in trying to obtain a costs order by alleging unreasonable costs by the other party.