ISG Retail Limited vs FK Construction Limited

This case concerned a procedural dispute between ISG Retail Limited and FK Construction Limited, focusing on whether the proceedings should continue under Part 7 and the assessment of costs.

TLDR:

• ISG Retail Limited filed a Part 8 claim against FK Construction Limited.
• The court had to decide whether to transfer the proceedings to Part 7.
• The court ordered the transfer to Part 7 and assessed costs.

The claimant, ISG Retail Limited, initiated Part 8 proceedings against the defendant, FK Construction Limited. The dispute arose from a construction contract, and the initial judgment declined to make any declarations. The court was then asked to rule on whether the proceedings should continue under Part 7 and to assess costs.

Under CPR Part 8.1(4), the court has the discretion to order a claim to continue as if the Part 8 procedure had not been used. The court considered factors such as cost savings and the promotion of timely resolution. FK Construction Limited argued for the dismissal of the Part 8 proceedings, suggesting that ISG Retail Limited should start fresh under Part 7. ISG Retail Limited proposed serving revised Particulars of Claim and sought directions for a case management conference.

The court noted that ISG Retail Limited's statement of case would require substantial revision but deemed it a reasonable foundation for Part 7 proceedings. The court decided that transferring the case to Part 7 would likely save time and costs compared to dismissing the proceedings and starting anew. Consequently, the court ordered the transfer to Part 7, with specific deadlines for serving revised Particulars of Claim, Defence, and Reply.

Regarding costs, FK Construction Limited sought its costs for the Part 8 proceedings, which ISG Retail Limited did not oppose. Both parties agreed on a summary assessment. FK Construction Limited's total costs amounted to £213,142.65, while ISG Retail Limited's costs were £115,001.70. FK Construction Limited proposed a reasonable figure of £149,199.86, representing 70% of its total costs.

The court assessed costs summarily, considering proportionality and reasonableness. The court found FK Construction Limited's costs to be high and disproportionate, particularly the fees for counsel and document preparation. The court reduced FK Construction Limited's costs to £133,000, which it deemed reasonable and proportionate compared to ISG Retail Limited's costs.

The parties were instructed to agree and lodge an order giving effect to the judgment within seven days.

Legal representatives: Simon Hale (instructed by Mantle Law (UK) LLP) for the claimant, Simon Hargreaves KC and James Frampton (Addleshaw Goddard) for the defendant.

Judicial Panel: Neil Moody KC sitting as a Deputy Judge of the High Court

Case Citation Reference: [2024] EWHC 1159 (TCC)