Should a party expect to recover costs in relation to heads of claim which they have abandoned?
In AEI Ltd v Phonographic Performance Limited  1 WLR 1507, Lord Woolf MR stated:
“…it is no longer necessary for a party to have acted unreasonably or improperly to be deprived of his costs of a particular issue on which he has failed.”
Referring to this judgment Longmore LJ, in Summit Property Ltd v Pitmans (A Firm)  EWCA Civ 2020, at paragraph 16, approved this view and went further:
“In my judgment, it is also no longer necessary for a party to have acted unreasonably or improperly before he can be required to pay the costs of the other party of a particular issue on which he (the first party) has failed. That is the substance of what the Master of the Rolls was there saying.”
Again, in Dudley Fleming v Chief Constable of Sussex  EWCA Civ 643, Potter LJ observed at paragraph 36:
“The principles are too well known to require to be set out in detail. The pre-CPR working rule to be found in the judgment of Nourse LJ in Re Elgindata Ltd (No 2) 1 WLR 1207 was modified by the observations of Woolf Lord in AEI Rediffusion Music Ltd v Phonographic Performance Ltd to the effect that it is no longer necessary for a party to have acted unreasonably or improperly to be deprived of his costs on a particular issue on which he has failed.”
So the test for recovery is not necessarily one of whether it was reasonable to pursue that head of claim.
In Shirely v Caswell  1 Costs LR 1, Chadwick, LJ, giving the judgment of the Court of Appeal:
“The costs of issues abandoned, or not pursued at trial, ought, prima facie, to be disallowed against the party incurring them on an assessment of the costs of that party by the costs judge – because, again prima facie, they are costs which have been unnecessarily incurred in the litigation.”
Burton J said, in Nugent v Goss Aviation  EWHC 1281 (QB):
“On an assessment the costs judge, who will prima facie disallow costs in respect of issues abandoned or not pursued, as the Court of Appeal has directed to do in Shirley v Caswell, will in any event disallow the costs of any claims which were positively struck out.”
So, the starting point is that a party should not expect to recover the costs of issues abandoned.
However, the law abhors certainty and so the Court of Appeal has jumped to the rescue. This is what they had to say about abandoned heads of claim in Motto v Trafigura  EWCA Civ 1150:
“So where a claimant told a … representative, and bona fide and reasonably believed, that he or she had suffered a certain type of damage as a result of the injury, then it would be right to recover the necessary, reasonable and proportionate cost of making the claim to recover for that damage.”
And further, and more bizarrely still:
“I do not consider that, absent special facts, it was unreasonable to have pleaded all heads of damage communicated by the client, with a view to amending them out or not pursuing them if and when they could not be sustained. Once a potential claimant was identified, it was sensible to add him or her as a party, and, rather than risking the cost, delay and uncertainty of adding to the heads of damage, I would have thought it perfectly sensible to include any head of damage which had been identified by the potential claimant, unless it was fanciful or some other special reason was apparent for not pleading it. Similarly so far as pursuing and investigating such heads of damage.”
So, bung in everything you can think of at the outset and expect to be able to recover the costs of the same.
Ten years worth of costs law ignored.