In general terms, if a claimant discontinues his claim he is usually ordered to pay the defendant’s costs unless the court provides for a different order (CPR 38.6 (1)). In Carey v HSBC [2009] EWHC (“Carey”) the court gave guidance in relation to s78 of the Consumer Credit Act 1974 concerning the obligation to provide information. In McGuffick v Royal Bank of Scotland Plc [2009] EWHC 2386 (“McGuffick”) the court held that it was open to a bank to continue reporting the state of a debtor’s account to credit reference agencies during the period when a loan agreement could not be enforced because the bank had not complied with its duty under the Consumer Credit Act 1974 s.77(1). Following the outcome of these cases, many claimants then sought to discontinue their claims, but on the basis that the defendant banks should pay all or part of their costs.
When the claimants issued proceedings, the court had not ruled on Carey or McGuffick. Nevertheless the court held that as with any claimant, they took the risk that the legal issues might be determined against them and as such this was no reason why the other party should pay their costs. Accordingly all claims for a different costs order under CPR 38.6 were dismissed.
Anton Teasdale v HSBC Bank Plc and other related cases [2010] EWHC 612
