A County Court judge in Londonderry has ruled that a district judge holds discretion to assess costs and expenses in civil bill actions where a defendant's lodgment has been accepted, rejecting the argument that a plaintiff is automatically entitled to full scale costs in such circumstances.

The case arose from a road traffic accident on 29 December 2023 at Crescent Link Road in Londonderry. The plaintiff, Sophie Storey, issued a civil bill on 18 April 2025 seeking £30,000 in damages from AXA XL Insurance Company UK Limited. The defendant lodged £8,750 on 2 July 2025, which the plaintiff accepted on 29 July 2025 in settlement of the damages claim. The parties failed to agree on costs, prompting the plaintiff to apply to the court to settle the amounts due.

The central legal question was whether Order 21 Rule 2(1) of the County Court Rules (Northern Ireland) 1981 gives the court discretion to assess the reasonableness of costs, or whether a plaintiff accepting a lodgment is entitled to 100% of the applicable scale costs as a matter of right. The plaintiff argued on two grounds: first, that no discretion exists under Order 21 to reduce scale costs; and second, that even if a discretion does exist, it would always be reasonable for a plaintiff to have incurred the full level of fixed costs set by the legislator.

District Judge Logue rejected both arguments. The court found that the phrase "costs and expenses reasonably incurred" in Order 21 Rule 2(1) applies the qualifying term "reasonably incurred" to both costs and expenses, and that the word "and" in that context should be read conjunctively in its natural and ordinary sense. The judge declined to follow the plaintiff's submission that "and" should be read disjunctively so as to exclude costs from the court's discretion, finding that the cases cited in support of that interpretation - Evans v Fleri and Re H (A Minor) - concerned situations involving clear statutory conflict or anomaly, neither of which was present here.

The court also rejected the argument that awarding anything less than 100% of scale costs would be arbitrary. The judge noted that a lodgment may be made at various stages of proceedings, from early in the case through to shortly before a final hearing, and that costs reasonably incurred will vary depending on when the lodgment occurs. The judgment referred with approval to the earlier decision of District Judge Duncan in Paul Dicks v First Central Underwriting Limited [2025] NI Cty 6, in which 75% of scale costs was awarded. The court clarified that this percentage is not a fixed rule but reflected what the judge in that case considered reasonable in those particular circumstances.

The plaintiff's reliance on principles drawn from judicial review cost decisions, including Re YPK and Others and M v London Borough of Croydon, was also dismissed. The court held that judicial review proceedings are of a different character to civil bill actions and that the costs principles applicable to them are not a suitable comparator in this context.

District Judge Logue confirmed that Order 21 creates a distinct regime within the County Court Rules for settling costs upon acceptance of a lodgment, and that the district judge's discretion is bounded only by the criterion of reasonableness and the parameters of the defended scale. The court indicated it would proceed to hear submissions on the substantive assessment of costs and expenses in the case.