{"id":822781,"date":"2026-05-03T08:45:19","date_gmt":"2026-05-03T06:45:19","guid":{"rendered":"https:\/\/kohenavocats.com\/jurisprudences\/dexia-crediop-s-p-a-v-comune-di-prato\/"},"modified":"2026-05-03T08:45:19","modified_gmt":"2026-05-03T06:45:19","slug":"dexia-crediop-s-p-a-v-comune-di-prato","status":"publish","type":"kji_decision","link":"https:\/\/kohenavocats.com\/zh-hans\/jurisprudences\/dexia-crediop-s-p-a-v-comune-di-prato\/","title":{"rendered":"Dexia Crediop S.P.A v Comune Di Prato"},"content":{"rendered":"<div class=\"kji-decision\">\n<div class=\"kji-full-text\">\n<p>MR. JUSTICE WALKER: 1. My judgment dated 25 June 2015 dealt with local government law and financial services law defences to the main claim in these proceedings. I\u00a0shall refer to it as the \u201cmain claim judgment\u201d. 2. The main claim judgment did not deal with other defences. Nor did it deal with the counterclaim. The reason for this was that the parties\u2019 closing submissions at trial had had to deal with a\u00a0wide range of possible outcomes. They had not focused on particular features of the conclusions that in the event I\u00a0reached on the first of the financial services law defences. The matter was restored for further argument in relation to those features and their consequences. On 10 November 2016 I\u00a0handed down my judgment on issues not dealt with in the main claim judgment. In the body of that judgment I\u00a0referred to it as the \u201cjudgment on remaining issues\u201d. For convenience today, I\u00a0shall refer to it as \u201cthe 2016 judgment\u201d. 3. Certain aspects of the orders to be made in consequence of the 2016 judgment were not in dispute. My order dated 10 November 2016, which I\u00a0shall refer to as \u201cthe 2016 order\u201d, dealt with those aspects in this way: (1) it determined the restitutionary consequences flowing from the 2016 judgment and in particular, it allowed an alternative restitutionary claim; (2) it allowed a\u00a0restitutionary counterclaim; (3) it dismissed other counterclaims; and (4) it reserved the costs and granted a stay of execution pending today\u2019s hearing. 4. When making that order, I\u00a0was much assisted by a\u00a0joint note from the parties. The note explained that, as regards the consequences of the 2016 judgment, certain issues remained in dispute. I\u00a0indicated to the parties earlier today that I\u00a0proposed to hear argument on those issues in stages. Stage 1 would be argument on the appropriate primary costs order to be made. Stage 2 would be argument on subsidiary costs orders. Stage 3 would be argument on permission to appeal, and stage 4 would be argument on whether there should be a\u00a0stay of execution. The parties were content with this proposal and argument has proceeded accordingly. 5. The legal teams involved today are those which appeared at the trial. Mr.\u00a0Richard Handyside QC and Mr.\u00a0Rupert Allen and their instructing solicitors Allen &amp; Overy comprise the legal team for the claimant, which I\u00a0shall refer to as \u201cDexia\u201d. Mr.\u00a0Jonathan Davies-Jones QC and Mr.\u00a0Christopher Burdin and their instructing solicitors Seddons Solicitors comprise the legal team for the defendant, which I\u00a0shall refer to as \u201cPrato\u201d. I\u00a0thank the legal teams for the considerable assistance which has been provided to me by them. 6. I\u00a0have now heard argument on stage 1 and accordingly give my judgment on the appropriate primary costs order to be made. The statements of case gave rise to numerous issues. Almost without exception those issues were highly complex. In the main claim judgment and the 2016 judgment some of those issues were decided in Dexia\u2019s favour and some were decided in Prato\u2019s favour. Neither party suggests that the whole of the costs should be paid by one party to the other. Both parties say that an order should be made on a\u00a0proportional basis, but they do not agree on the proportions and who should pay them. Dexia asserts that the appropriate order is that Prato should pay 90% of Dexia\u2019s costs and that Dexia should pay 10% of Prato\u2019s costs, and that those amounts should be netted off. Prato proposes that an order should be made under which it would recover from Dexia 70% of its costs. In the present judgment I\u00a0refer to the dispute between the parties in this regard as a\u00a0dispute about the \u201cprimary\u201d costs order so as to distinguish it from \u201csubsidiary\u201d costs matters such as whether there should be an interim payment on account. 7. My powers in relation to the primary costs order are governed by CPR 44.2 which comprises eight paragraphs. Under paragraph (1), I\u00a0have a\u00a0discretion as to whether costs are payable by one party to another. The general rule when exercising that discretion is set out in paragraph (2). The general rule is that the unsuccessful party will be ordered to pay the costs of the successful party. 8. Paragraph (2) notes, however, that the court may make a\u00a0different order where that is required to do justice. Under paragraph (4), in deciding what order (if any) to make about costs, the court is to have regard to all the circumstances. Paragraph 4(b) notes that these circumstances include whether a\u00a0party has succeeded on part of its case, even if that party has not been wholly successful. 9. Paragraph 4(a) also notes that the circumstances include the conduct of all the parties, something which is in turn the subject of paragraph (5). Under paragraph 5(b) the conduct of the parties includes whether it was reasonable for a\u00a0party to raise, pursue or contest a\u00a0particular allegation or issue. Under paragraph 5(c) the conduct of the parties also includes the manner in which a\u00a0party has pursued or defended its case or a\u00a0particular allegation or issue. 10. As to the remaining paragraphs, at this stage I\u00a0 mention only paragraph 6(a) under which the court may make an order that a\u00a0party pay a\u00a0proportion of another party\u2019s costs. 11. At one stage in argument this morning it was suggested by Prato that the order which it sought was an order in accordance with the general rule. I do not agree. The general rule is that the unsuccessful party should pay to the successful party the whole of the costs of the matter that has been tried. This can be seen from the judgment of Lord Woolf M.R. in A.E.I. RediffusionMusic Ltdv Phonographic Performance Ltd [1999] 1 WLR 1507, 1522. That judgment was given at a\u00a0stage when the Civil Procedure Rules had been made but had not yet come into force. In that regard Lord Woolf said at page 1522: I draw attention to the new Rules because, while they make clear that the general rule remains, that the successful party will normally be entitled to costs, they at the same time indicate the wide range of considerations which will result in the court making different orders as to costs. From 26 April 1999 the \u2018follow the event principle\u2019 will still play a significant role, but it will be a starting point from which a court can readily depart. This is also the position prior to the new Rules coming into force. The most significant change of emphasis of the new Rules is to require courts to be more ready to make separate orders which reflect the outcome of different issues. In doing this the new Rules are reflecting a change of practice which has already started. It is now clear that too robust an application of the \u2018follow the event principle\u2019 encourages litigants to increase the costs of litigation, since it discourages litigants from being selective as to the points they make. If you recover all your costs as long as you win, you are encouraged to leave no stone unturned in your effort to do so. 12. In circumstances where both parties agree that there should be a\u00a0departure from the general rule, I\u00a0can deal briefly with the principles governing whether the court should take that course. Those principles were discussed by Gloster\u00a0J in HLB Kidsons v Lloyd\u2019s Underwriters [2007] EWHC 2699 (Comm), [2008] 3 Costs LR 427 at paragraphs 10 and 11: 10. The principles applicable as to costs were not in contention. The court\u2019s discretion as to costs is a wide one. The aim always is to \u2018make an order that reflects the overall justice of the case\u2019 (Travellers\u2019 Casualty v Sun Life [2006] EWHC 2885 (Comm) at paragraph 11 per Clarke J. As Mr. Kealey submitted, the general rule remains that costs should follow the event, i.e. that \u2018the unsuccessful party will be ordered to pay the costs of the successful party\u2019: CPR 44.3(2). In Kastor Navigation v Axa Global Risks [2004] 2 Lloyd\u2019s Rep 119, the Court of Appeal affirmed the general rule and noted that the question of who is the \u2018successful party\u2019 for the purposes of the general rule must be determined by reference to the litigation as a whole; see paragraph 143, per Rix LJ. The court may, of course, depart from the general rule, but it remains appropriate to give \u2018real weight\u2019 to the overall success of the winning party: Scholes Windows v Magnet(No 2) [2000] ECDR 266 at 268. As Longmore LJ said in Barnesv Time Talk [2003] BLR 331 at paragraph 28, it is important to identify at the outset who is the \u2018successful party\u2019. Only then is the court likely to approach costs from the right perspective. The question of who is the successful party \u2018is a matter for the exercise of common sense\u2019: BCCI v Ali (No 4) 149 NLJ 1222, per Lightman J. Success, for the purposes of the CPR, is \u2018not a technical term but a result in real life\u2019 (BCCI v Ali (No 4) (supra)). The matter must be looked at \u2018in a realistic &#8230; and &#8230; commercially sensible way\u2019: Fulham Leisure Holdings v Nicholson Graham &amp; Jones [2006] EWHC 2428 (Ch) at paragraph 3 per Mann J. 11. There is no automatic rule requiring reduction of a successful party\u2019s costs if [that party] loses on one or more issues. In any litigation, especially complex litigation such as the present case, any winning party is likely to fail on one or more issues in the case. As Simon Brown LJ said in Budgen v Andrew Gardner Partnership [2002] EWCA Civ 1125 at paragraph 35: \u2018The court can properly have regard to the fact that in almost every case even the winner is likely to fail on some issues\u2019. Likewise in Travellers\u2019 Casualty (supra), Clarke J said at paragraph 12: If the successful Claimant has lost out on a number of issues it may be inappropriate to make separate orders for costs in respect of issues upon which [the Claimant] has failed, unless the points were unreasonably taken. It is a fortunate litigant who wins on every point. 13. It may be noted that, applying these principles, Gloster\u00a0J held that in the circumstances of the Kidsons case it was appropriate to deprive the successful party of certain of its costs. In the present case Prato is the successful party. Both sides now agree that if the general rule were to be applied Prato would recover the whole of its costs, but that this is a case where the court as a\u00a0matter of discretion should depart from the general rule. I\u00a0am satisfied that the circumstances of the case are indeed such as to warrant a\u00a0departure. The real question in the case is how that departure should be formulated and how far it should go. In that regard both sides drew my attention to passages from Civil Procedure 2016 (the White Book) volume 1, pages 1253-1254. 14. First, a\u00a0general summary along with some helpful observations can be found in the first two paragraphs on page 1253: So, in summary, the position is that, where a party successful overall has been unsuccessful on an issue (or issues), a court (1) should consider adopting an issue-based approach, and (2) in deciding what order to make in relation to that issue (or issues) may decide (a) that party should be deprived of his costs of that issue, or a proportion of those costs, or those costs from or until a certain date; or even (b) that that party should pay the costs of the otherwise unsuccessful party on that issue, or a proportion of those costs, or those costs from or until a certain date. There are two separate aspects to the policy objectives underlying the development of the issue-based approach to costs. First, in the Access to Justice Report (June 1995), it was stated that, as the new approach to case management (subsequently introduced by the CPR) involves \u2018breaking down the issues which make up the litigation\u2019, the court has to be prepared \u2018to make different orders for costs in relation to different issues to support the new approach to case management\u2019 (Section V Ch. 25 para. 22). Secondly, in the Access to Justice Final Report (July 1996) criticism was made of the fact that the English courts \u2018are wedded to the dual concept that costs should be treated as a whole and that costs should follow the event\u2019 and it was recommended that the courts should use to the full their very wide statutory discretion over costs to support the conduct of litigation in a proportionate manner and to discourage excess\u2019 (Section II Chp 7 paras 8 and 9). In AEI Rediffusion Music Ltd v. Phonographic Performance Ltd [1999] 1 W.L.R. 1507, CA, in elaborating on that criticism, Lord Woolf M.R. explained that too robust application of the dual concept (a) discourages parties from being selective \u2018as to the points they take\u2019, and (b) by enabling them to proceed on the safe assumption that, if they are successful overall they can expect to recover costs on all issues (including those on which they fail), increases costs and adds to delays. (Put shortly and colloquially, the policy objective is to discourage by costs risks a \u2018kitchen sink\u2019 approach to litigation.) 15. The next two paragraphs discuss the circumstances where an \u201cissue-based\u201d approach is possible, and the development of the issue-based approach to costs since the CPR came into effect: An \u2018issue-based\u2019 approach is possible where there are identifiable \u2018issues\u2019 in the proceedings. In r.44.2 there are references to \u2018issue\u2019 (r.44.2(5)(a) and (b)), to \u2018allegation\u2019 (above, to \u2018part of case\u2019 (r.44.2(4)(b)), to \u2018particular steps taken in proceedings\u2019 (r.44.2(6)(e)), and to \u2018distinct part of proceedings\u2019 (r.44.2(6)(f). It is assumed that what these words and expressions mean in the context in which they are used will be readily understood. The assumption appears to be well-founded. In most reported cases dealing with the \u2018issue-based\u2019 approach to costs the issues subjected to scrutiny are what lawyers would describe (using the language of pleading) as \u2018pleaded issues\u2019, or \u2018points of claim\u2019, or \u2018heads of claim\u2019, or \u2018allegations\u2019 of breaches of duty or of negligence. An \u2018issue\u2019 in this context could be described as anything upon which, standing alone, a could court grant relief, but it may mean something less than that. In any event, it has to be something arising in the proceedings upon which one party can be said to have been \u2018successful\u2019. The development of the issue-based approach to costs since the CPR came into effect has had an enormous impact on costs practice. Application for issue-based orders have become common place and \u2018a modern industry\u2019 has emerged (Gemstar-TV Guide International Inc v Virgin Media Limited [2009] EWHC 3552 (Pat), December 18, 2009, unrep (Mann J.)). Routinely, judges approach the matter by asking themselves three questions: first, who has won; secondly, has the winning party lost on an issue which is suitably circumscribed so as to deprive that party of the costs of that issue?; and thirdly, is it appropriate in all the circumstances of the individual case not merely to deprive the winning party of its costs on an issue in relation to which it has lost, but also to require it to pay the other side\u2019s costs? (Hospira UK Ltd v Norwich AG [2015] EWHC 886 (Pat), April 12, 2013, unrep. (Arnold J.)). 16. On the following page, some observations are set out including: The fact that the judge has such a wide discretion under r.44.2 means that predicting the outcome of an issue-based approach is extremely difficult. Different judges may take strongly diverging approaches in similar case, without falling into error and their decisions being amenable to appeal. Criticism has been made of \u2018a growing and unwelcome tendency\u2019 by first instance courts and by the Court of Appeal to depart from the \u2018starting point\u2019 of the general rule \u2018too far and too often\u2019 (Fox v Foundation Piling Limited [2001] EWCA Civ 790, [2001] C.P. Rep. 41, CA at para. 62, per Jackson L.J.). That criticism applies principally to departures from the general rule by the adoption of an issue-based approach. 17. Reference is also made on page 1254 to propositions which can be derived from the judgment of Jackson J in Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd [2008] EWHC 2280 (TCC); 122 Con. LR 88. I\u00a0need not set out all seven of the propositions that can be found on pages 1254 to 1255. Propositions 3 and 4 are adequately summarised in the passage that I\u00a0have cited from Gloster\u00a0J\u2019s judgment in the Kidsons case. It suffices for present purposes to set out proposition 1: 1. The rules themselves impose no requirement to the effect that an issue-based costs order should be made only \u2018in a suitably exceptional case\u2019, and none is to be implied, although \u2018there needs to be a reason based on justice\u2019 for departing from the general rule, and that the question of the extent to which costs of a particular issue are to be disallowed should be left to the evaluation and discretion of the judge, \u2018by reference to the justice and circumstances of the particular case\u2019 (F&amp;C Alternative Investments (Holding) Ltd v Barthelemy (No.3) [2012] EWCA Civ 843; [2013] 1 W.L.R. 548, CA, at paras 47 and 49 per Davis L.J. (a case where a proportionate costs order, made in relation to two issues on which the parties who had succeeded overall had not succeeded, was upheld.)). 18. I\u00a0indicated earlier that Dexia accepted that Prato was the successful party in the case. The main claim sought a\u00a0declaration that interest rate swaps entered into between Dexia and Prato were valid. That claim had failed. As was pointed out by Prato in oral submissions this morning, this had three adverse, or potentially adverse, consequences for Dexia. The first was that amounts of the order of \u20ac1.5 million paid by Prato to Dexia under the last of the swaps (\u201cswap 6\u201d) had been paid under an invalid agreement. The second concerned a claim by Dexia that \u20ac6.5-odd million had become due and payable during the period up to trial. That claim had been dismissed. The third consequence concerned a claim by Dexia that further payments of the order of \u20ac10 million would become due. That claim, too, had been dismissed. 19. Nevertheless Dexia contended that this was not the whole story. First, there had been a\u00a0host of defences and counterclaims on which Prato had lost. They can conveniently be identified by quoting the general description of defences and counterclaims in paragraphs 10 and 11 of Dexia\u2019s skeleton argument: 10. Prato\u2019s pleaded defences to the claim were that: 10.1 Prato had no capacity to enter into the Swaps by virtue of alleged infringements of Article\u00a0119 of the Italian Constitution, Article\u00a041 of Law 448\/2001 or Article 3 of Decree 389\/2003; 10.2 The Swaps were null and void because Prato had acted unlawfully and in excess or abuse of its powers or without actual or ostensible authority in entering into the Swaps by reason of the alleged infringements of the same administrative law provisions; 10.3 Prato\u2019s obligations under the Swaps were unenforceable because they would have required it to act illegally under Italian law by virtue of the alleged infringements of the same administrative law provisions; 10.4 Prato\u2019s obligations under the Swaps were unenforceable because they contravened mandatory rules of Italian law including Article 30 and Article 32 of TUF and Article 23 of TUF and Article 30 of the CR, as well as the rules concerning causa and oggetto in the Civil Code. 10.5 Prato had rescinded or was entitled to rescind the Swaps for Dexia\u2019s alleged misrepresentation; and 10.6 Prato had annulled the decisions to enter into the Swaps by means of an administrative self-redress procedure (autotutela) under Italian law. 11. Prato also counterclaimed for: 11.1 Restitution of amounts it had paid under Swap 6; 11.2 Damages for Dexia\u2019s alleged breach of Italian financial services law; 11.3 Damages for Dexia\u2019s alleged breach of contract and\/or negligence; and 11.4 Damages for Dexia&#039;s alleged misrepresentation. 20. As regards the pleaded defences to the claim set out in paragraph 10, it was only in respect of defences described in paragraph 10.4 that Prato was successful. Moreover, Prato was not successful on all of the defences described in paragraph 10.4. It was unsuccessful in defences which relied on the rules concerning causa and oggetto. 21. In relation to the defence described at paragraph 10.6, Prato had in fact been unsuccessful in proceedings in Italy concerning the administrative self-redress procedure. That defence was abandoned at the start of the trial. In relation to the counterclaim it was only as regards the counterclaim described at 11.1, which I\u00a0shall refer to as the \u201crestitutionary counterclaim\u201d, that Prato succeeded. It failed on all other counterclaims. Moreover, while Dexia had lost on its main claim, it had succeeded on an alternative restitutionary claim. 22. Many of the defences and counterclaims which failed had relied upon a\u00a0central allegation by Prato of breach of duty on Dexia\u2019s part. That allegation concerned a failure by Dexia to disclose to Prato the initial mark to market value (\u201cinitial MTM\u201d) of the swaps. All claims founded upon that allegation, however, had been unsuccessful. Thus, the result was that on the defences where Prato had been successful the evidence of only two of the six experts called at trial had been relevant. The evidence of the remaining four experts, two on each side, was entirely concerned with aspects of the case on which Prato lost. 23. Dexia submitted that, in the words of the White Book in the first passage quoted above, this was a\u00a0case where Prato had adopted a\u00a0\u201ckitchen sink\u201d approach. It was asserted that the swaps were not complex financial products and were readily understandable. There was little dispute as to the underlying facts, yet the trial had spanned seven weeks. The court\u2019s judgments dealing with these complicated defences had extended to over 200 pages. There had, submitted Dexia, been a\u00a0burdensome proliferation of evidence: the exhibits to the reports of the Italian legal experts ran to 30 lever arch files. Dexia submitted there was a\u00a0public interest in insisting that parties conduct cases in a\u00a0proportionate manner and not impose very considerable burdens both on the other side and on the court. 24. Dexia acknowledged that Prato was legally entitled to take all proper defences available. As to that, however, Dexia submitted that Prato could not expect sympathetic consideration of a\u00a0claim to costs when the overwhelming majority of its defences and counterclaims had failed. 25. In summary, Dexia\u2019s position was that the case would have been very different if Prato had confined itself to the points on which it succeeded. The pleadings would have been much shorter. The bundles would have been far fewer and there would have been no factual evidence. The experts\u2019 reports would have been shorter. The expert evidence could have been dealt with in a\u00a0day. Dexia submitted that in these circumstances the trial would have lasted no more than two days. By contrast, seven weeks elapsed between the start of the trial and its conclusion. 26. Dexia also relied on a\u00a0different reason for departing from the general rule. This concerned findings made in the 2016 judgment about the evidence of the principal witness for Prato, Ms.\u00a0de Castelli. Her evidence was rejected by the court on the basis that parts of it were \u201cpure invention\u201d, \u201cinherently incredible\u201d, \u201cinconsistent and incredible\u201d, \u201cbluster\u201d, \u201cabsurd\u201d and \u201cdisingenuous\u201d. Dexia commented that Prato\u2019s central case was therefore advanced by it on an entirely false factual premise. In that regard Dexia submitted that CPR 44.2(4)(a) applied. The court should have regard to the conduct of the parties on this aspect. Dexia added that CPR 44.2(5)(c) was engaged because the contrived evidence of Dr.\u00a0de Castelli was an aspect of the manner in which Prato had pursued its defence and counterclaim. 27. On behalf of Prato it was submitted that a\u00a0number of additional principles could be identified from earlier judicial decisions. The first of these was that the court must give weight to the overall success of the winning party. The second was that the court is not concerned with success in a\u00a0technical sense but with \u201cthe real-life result\u201d. I\u00a0need not set out the third and fourth principles identified by Prato as the assertions made by Prato in that respect duplicate what is set out in paragraphs 10 and 11 of the judgment of Gloster\u00a0J in the Kidsons case and are indeed common ground. Nor need I\u00a0set out Prato\u2019s fifth proposition, which was not in truth a\u00a0proposition of law at all, but merely the observation made by Jackson LJ in the Fox case cited in the White Book in the passage set out above. Prato\u2019s sixth proposition was that even where it is appropriate to adopt an issue-based approach, the court has to stand back from the mathematical result and ask itself whether in all the circumstances it has \u201carrived at the right result\u201d. 28. In this regard Prato relied strongly on the decision of the Court\u00a0of\u00a0Appeal in Kastor NavigationCo Ltd v AGF Mat [2004] EWCA Civ 277. This was a\u00a0marine insurance case. After a\u00a0lengthy trial the owners\u2019 claim that the vessel was a\u00a0constructive total loss succeeded. However, the owner\u2019s original claim was that the vessel was an actual total loss. While the judge at first instance concluded that the argument on the constructive total loss issue occupied only about 1\u00bd days, the remaining 15\u00bd days of a\u00a017-day trial were occupied in the investigation of matters concerned with the claim for an actual total loss. 29. The judge concluded that an assessment that 15% of the owner\u2019s overall costs related to the constructive total loss claim would eliminate any possibility that it might be an underestimate. On that footing the judge gave the owners their costs of the constructive total loss issue, on an indemnity basis after the first day of the trial, and gave underwriters their costs of the actual total loss issue. The net effect of the judge\u2019s order was that the owners would bear all their own costs and pay\u00a070% of the insurer\u2019s costs. 30. The judge had, in the last paragraph of his judgment, stood back and asked himself whether this outcome was \u201cso plainly wrong that it must be regarded as perverse\u201d. He concluded that it was not. 31. In the Court\u00a0of\u00a0Appeal Rix\u00a0LJ delivered the judgment of the court. I\u00a0set out below what was said in that judgment in paragraphs 146-149 and 151-153. 146 \u2026 The owners were undoubtedly the successful party in this case. They had recovered the full amount of their claim plus interest. In A.L. Barnes Ltd. v Time Talk (UK) Ltd [2003] EWCA Civ 402 Barnes had obtained judgment for a substantial part of their claim but were ordered to pay 50% of the other side\u2019s costs because the judge had made a finding that one of its directors was dishonest, an issue which had taken up \u2018the great bulk of court time\u2019. This had led the judge to conclude that the defendant was the successful party. In allowing the appeal Longmore LJ (with whom Clarke and Ward LJJ agreed) said: It does seem to me that the judge has, with the greatest respect, fallen into an error of principle. In what may generally be called commercial litigation &#8230; the disputes are ultimately about money. In deciding who was the successful party the most important thing is to identify the party who is to pay money to the other. That is the surest indication of success and failure. 147 Mr Eder\u2019s principal submission is that the judge fell into much the same error in this case. He did not start from the general rule that the owners were entitled to their costs. He gave effect to the outcome of his issue by issue analysis too mechanistically without having regard to all the circumstances of the case and then tested his conclusion by applying the wrong test. 148 We remind ourselves that the rules confer a wide discretion on trial judges on questions of costs. This court must exercise restraint when it is asked to upset orders for costs and should only do so if they are flawed. \u2026 149 For the reasons the judge gave we do not think he can be faulted for adopting an issue by issue approach to this case. Nor was there anything wrong in principle with an order which resulted in the successful party having to pay the unsuccessful party a substantial proportion of its costs. The \u2018winner takes all\u2019 principle no longer applies. But the question in this case is whether the judge was right to apply the issue by issue approach so rigorously (\u2018logically\u2019 as he put it) to the exclusion of any other factors. This may be entirely justified in some cases. But was it justified in this case and, if it was not, does this mean that the judge\u2019s order was flawed? &#8230; 151 This is not a case where the issue on which the successful party lost was a separate head of claim: it was a separate basis for putting the successful party\u2019s only claim. Accordingly, unlike in many cases involving issue-based orders for costs, this was a case where the issue on which the successful party lost would not have been litigated if the unsuccessful party had conceded the issue on which the successful party won. The force of that point in relation to costs in the present case is underlined by the existence of the owners\u2019 Part 36 offer. 152 These factors might have justified an order that the insurers should pay all or a very substantial part of the owners\u2019 costs. But this is not to say that the judge was wrong to take into account the fact that the owners had been wholly unsuccessful on the actual total loss claim and that this had occupied most of the time at trial and generated much of the cost before it. They had started with this claim and pursued it without ever having a sustainable case on causation. They made the choice to pursue it at trial when they need not have done. This is obviously a factor which pulls the other way. On its own it obviously justified the order which the judge made. 153 But we think it was an error of approach by the judge simply to visit the mathematical outcome of the issue by issue approach on the owners. This took no account of the other factors to which we have referred. The rules required him to have regard to all the circumstances of the case and it does not seem to us that he did so, at least not in the way the rules required. He should have stood back from the mathematical result and asked himself whether in all the circumstances, including the other factors to which we have referred, it was the right result. In fact he asked himself whether it was a perverse result. This was not the right question. If he had asked the right question we doubt that he would have decided that the owners should be deprived of all their costs and pay 70% of their unsuccessful opponents\u2019 costs.\u201d 32. Prato submitted that the present case falls within the words used in paragraph 151 of the judgment. Prato had lost on issues which would not have been contested if the issues on which they had won had been conceded. In those circumstances, the Court of Appeal had indicated that a\u00a0mathematical approach should be put to one side if it did not produce \u201cthe right result\u201d. 33. Finally, Prato referred to Summit Property Ltdv Pitmans [2001] EWCA Civ 2020. The Court\u00a0of\u00a0Appeal in that case was concerned with a\u00a0claim made by a\u00a0client of a\u00a0solicitors\u2019 firm against the firm for breach of its retainer. The client won on the main issue of the breach of duty. This had taken up most of the time at trial. The solicitors, however, were successful in defending the claim for damages, in particular on the basis that the losses suffered had not been caused by the breach of the retainer. The result was that the client was the unsuccessful party overall, but it was awarded 65% of its costs while being required to pay only 30% of the solicitors\u2019 costs. 34. That case, Prato submitted, was completely different from the present. There had been no breach of duty by Prato to Dexia, nor had Prato been in breach of any professional obligation. It had simply defended itself as best it could against an unjustified claim. The two fundamental questions had been whether the swaps were binding and whether Prato owed the huge sums claimed by Dexia. They were the questions which motivated the litigation and they were both questions on which Prato had been successful. Prato urged that, among other things, points on which Dexia had won were \u201cin real life\u201d meaningless successes as all the points in the case had been directed at the two fundamental questions as to the validity of the swaps and whether or not Dexia was entitled to the \u20ac18 million which was at issue under swap 6. 35. The counterclaims on which Prato had lost had, submitted Prato, no commercial or real life significance in light of the fact that the swaps were invalid. Here too Prato made the point that the issues on which it lost would not have been litigated at all if Dexia had conceded the issues on which Prato had won. Prato asserted that there had been nothing unreasonable or disproportionate about running the points on which it had lost and that the fundamental problem with Dexia\u2019s approach was that it had effectively sought an indemnity for prosecuting an unjustified claim which failed. 36. As to Prato\u2019s conduct in running the points which had not succeeded, Prato submitted that the court had considered each such point carefully and had not found any such point to be unarguable or hopeless. In fact difficult and important questions of Italian law arose as described in the main claim judgment. There were strong lines of Italian case law supporting the parties\u2019 propositions on, for example, the question whether it was entitled to succeed in its assertion that in the absence of disclosure of the initial MTM, the contract would lack causa. Numerous Italian cases had supported the assertion in the counterclaim of an obligation to disclose. Indeed the discussion of those issues, the question of causa and the question of an obligation to disclose, had taken up around half the 2016 judgment. Prato added the fact that Italian law has no doctrine of precedent was highly material. It was particularly difficult for parties and their lawyers to say with certainty what Italian law was. In these circumstances, Prato urged that it should not be penalised in costs beyond 30% for that difficulty. Prato added it was a\u00a0public body charged with the responsible stewardship of public funds and that there were lines of Italian case law supporting it. In those circumstances, it was quite wrong to say that Prato had adopted a\u00a0\u201ckitchen sink\u201d approach. Nor could it properly be said that Prato had taken any points regardless of merit. 37. As to the suggestion that the case would have been much shorter, Prato submitted that this suggestion did not adopt the right perspective. It failed to recognise that any claimant was likely to lose on some issues. 38. On this aspect there was a further submission by Prato. It was that Dexia had relied upon a\u00a0passage in the 2016 judgment as showing that Prato had been unreasonable to advance a\u00a0defence prior to an important decision of the Italian Court of Cassation. This submission does not need to be set out in any detail. The reason is that it misunderstood the point that was being made by Dexia. Dexia was simply pointing out that until that decision its own approach to the first financial services law defence was strongly supported by Italian case law. 39. As to the contrived evidence of Ms.\u00a0de Castelli, Prato noted that her evidence was not rejected in its entirety. Prato also suggested that the evidence had no bearing on any defence other than misrepresentation. Prato submitted that its deduction of 30% appropriately took account of the factor that the contrived evidence of Ms.\u00a0de Castelli could justify a\u00a0departure from the general rule. 40. Turning to the concern that Dexia was effectively seeking indemnity for prosecuting an unjustified claim which had failed, Prato submitted that Dexia\u2019s proposed order gave no weight to the outcome and was not the right result. Prato added that the real cause of the litigation was Dexia\u2019s conduct in bringing proceedings to validate swaps which were in fact invalid. Moreover, submitted Prato, there was an important public policy here, for Dexia\u2019s approach would create a\u00a0chilling effect. In litigation between a\u00a0bank and its client, the bank was racking up huge costs even though the client had demonstrated that it was right to complain of invalidity of the contract that had been made between it and the bank. This, submitted Prato, was not a\u00a0policy which the CPR was intended to achieve. 41. In reply Dexia relied upon paragraph 149 of the judgment in Kastor Navigation where the Court\u00a0of\u00a0Appeal recognised that a\u00a0rigorous approach to a\u00a0determination of the consequences of losing on a\u00a0substantial issue may be entirely justified in some cases. Moreover, a\u00a0particular feature of the Kastor\u00a0case was that if the insurers had faced up to the constructive total loss claim then the two claims would never have been tried together. Kastor, submitted Dexia, provided no basis for doing anything other than taking an issue-based approach. In the present case Prato, while it was the successful party overall, had lost on many more issues than it had won. Moreover the vast bulk of the evidence was concerned with issues on which Prato had lost. In that context Dexia submitted that Prato misunderstood the foundation of Dexia\u2019s points in relation to its \u201ckitchen sink\u201d assertion. The foundation for that assertion was that under CPR 44.2, it is relevant that Dexia has been successful on a\u00a0large part of the case. This was not a\u00a0case in which Prato\u2019s conduct of the case had been economical. It had litigated so many points on which it lost that Dexia should recover its costs or a proportion of the costs on those issues. The submission by Prato concerning public policy in relation to the racking up of costs was misconceived. If it were said that Dexia\u2019s costs were too high, then that would come out on assessment. 42. To my mind there are passages in the submissions of Dexia which call for some degree of comment or qualification. I reject the assertion that the swaps were not complex financial products. On the facts of the case Prato was treated as not being a\u00a0professional client but as being in the position of a\u00a0consumer. It could not be assumed that a\u00a0consumer would be able to understand the particular provisions in these interest rate swaps. That said, however, my conclusion in relation to Ms.\u00a0de Castelli was that she was an astute and highly competent individual. Thus, although I\u00a0emphasise that the swaps were complex, I\u00a0accept that Ms.\u00a0de Castelli was able to understand them. 43. I\u00a0should mention in relation to the span of the trial that while it was conducted over a\u00a0period of seven weeks, because of the availability or unavailability of witnesses it was conducted to some extent in fits and starts, involving a\u00a0total of 18 days from start to finish of the trial. I\u00a0add that I\u00a0doubt very much whether the trial would have been as short as Dexia suggests if Prato had not run the many defences and counterclaims which failed. Certainly the trial would have been considerably shorter. 44. There is one very substantial advantage which would have assisted me greatly when it came to writing my judgment had the matter been confined to the issues on which Prato were successful. This is that the precise nature of those issues would have been the subject of much more detailed examination at trial and I\u00a0would have had the benefit of more detailed analysis by the Italian law experts of the cases that were relevant to those particular issues. I do not suggest that the outcome would have been any different. My point is simply that of necessity the Italian law experts, dealing with the hugely complex array of points relied upon by Prato, inevitably went into more detail on some points than they did on others. Accordingly, when considering Dexia\u2019s contentions as to potential time savings, I would allow additional time for more detailed analysis by the experts of issues on which Prato succeeded. On this basis, my best estimate is that, if Prato had conceded issues of Italian law on which it lost, the trial would have required something in the region of 5 to 8 days. 45. It was not disputed by Dexia that I\u00a0must give weight to the fact that Prato was overall the successful party. Nor was it disputed by Dexia that I\u00a0am concerned with \u201cthe real life result\u201d. There was no contention by Dexia that I\u00a0should do anything other than follow the guidance given in Kastor Navigation about standing back and asking myself what was \u201cthe right result\u201d. This seems to me to be very much a\u00a0case where, as in Kastor, different factors pull in different directions. 46. I\u00a0am not inclined to adopt in this case the terminology of a\u00a0\u201ckitchen sink approach\u201d. That terminology would be appropriate in a\u00a0case where points had been pursued that obviously lacked merit. It would be wrong to say that the defences run by Prato at the trial fell into that category. 47. I\u00a0am not persuaded by Prato\u2019s contention that the Italian law rules concerning precedent, or indeed a\u00a0lack of Italian law rules concerning precedent, create insuperable difficulties for those seeking to advise clients. Even in our common law system, those who advise clients must recognise that there may be a\u00a0change in the principles which had been thought to apply. Nevertheless, I\u00a0accept Prato\u2019s submission that there were, on many of the important issues run by way of defence or arising in the counterclaim, strong arguments to be made on the basis of Italian law decisions. In the event, those arguments were not in my view arguments that the Italian Court of Cassation would be likely to uphold. It would be quite wrong to describe Prato\u2019s case on those issues as adopting a\u00a0\u201ckitchen sink\u201d approach. 48. I observe that the expression \u201ckitchen sink approach\u201d is found in the comments in the White Book. It is not found in the judgment of Lord Woolf MR in the Rediffusion case. As was rightly accepted by both sides, it is not necessary for Dexia to make any assertion that there was an unreasonable approach taken by Prato. CPR 44.2 confers power, as a\u00a0matter of discretion, to recognise the extent to which Prato ran defences and counterclaims on which it failed. That power arises out of the circumstance that on the issues in question Prato did fail. The time and other resources taken up by those issues were very substantial indeed. 49. It is right to make an order which gives proper recognition to the impact of this on the shape of the case, and on the resources that were needed both to prepare for the trial and to conduct the trial. Such an order would, in my view, come close to depriving Prato of its costs. When I\u00a0take into account the additional factor of the contrived evidence of Ms.\u00a0de Castelli, standing back and asking what is the right result, my conclusion is that the right result is to deprive Prato of its costs entirely. I add that the contrived evidence of Ms.\u00a0de Castelli did not merely go to misrepresentation. The foundation for many of the issues in the case, and the major complaint made by Prato prior to the beginning of the proceedings, concerned an allegation that Prato was unaware that the swaps would at the outset have a\u00a0negative initial MTM. I\u00a0have no doubt that Ms.\u00a0de Castelli as an astute and highly intelligent financial officer had appreciated that by entering into a\u00a0contract of this kind the client is immediately put into a\u00a0position where it has a\u00a0contract with a\u00a0negative initial present value. 50. That said, however, I\u00a0am not persuaded by Dexia that this is an appropriate case for the court to go further and to make an order that Prato should pay to Dexia some part of Dexia&#039;s costs. That would in my view fail to give proper weight to the undoubted fact that Prato was the successful party overall. I\u00a0recognise that there may be cases where, as noted in paragraph 149 of the judgment in KastorNavigation, the appropriate course is to take a\u00a0rigorous approach, analysing the time spent on issues which have been successful and the time spent on issues which have failed and awarding costs to each side accordingly. I\u00a0do not consider that the present case falls into that category. Prato is right to say that if the defences on which it won had been conceded, then there would not have needed to be a\u00a0trial on other defences. 51. In all the circumstances, my conclusion is that the right primary costs order is that each side should bear its own costs.<\/p>\n<\/div>\n<hr class=\"kji-sep\" \/>\n<p class=\"kji-source-links\"><strong>Sources officielles :<\/strong> <a class=\"kji-source-link\" href=\"https:\/\/caselaw.nationalarchives.gov.uk\/ewhc\/comm\/2017\/252\" target=\"_blank\" rel=\"noopener noreferrer\">consulter la page source<\/a><\/p>\n<p class=\"kji-license-note\"><em>Open Justice Licence (The National Archives).<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>MR. JUSTICE WALKER: 1. My judgment dated 25 June 2015 dealt with local government law and financial services law defences to the main claim in these proceedings. I shall refer to it as the \u201cmain claim judgment\u201d. 2. The main claim judgment did not deal with other defences. Nor did it deal with the counterclaim. The reason for this was&#8230;<\/p>\n","protected":false},"featured_media":0,"template":"","meta":{"_crdt_document":""},"kji_country":[7608],"kji_court":[7665],"kji_chamber":[],"kji_year":[52833],"kji_subject":[7625],"kji_keyword":[7623,8052,8204,8356,57032],"kji_language":[7611],"class_list":["post-822781","kji_decision","type-kji_decision","status-publish","hentry","kji_country-royaume-uni","kji_court-high-court-commercial-court","kji_year-52833","kji_subject-commercial","kji_keyword-claim","kji_keyword-costs","kji_keyword-dexia","kji_keyword-issues","kji_keyword-prato","kji_language-anglais"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.5 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Dexia Crediop S.P.A v Comune Di Prato - Ma\u00eetre Hassan Kohen, avocat en droit p\u00e9nal \u00e0 Paris<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/kohenavocats.com\/zh-hans\/jurisprudences\/dexia-crediop-s-p-a-v-comune-di-prato\/\" \/>\n<meta property=\"og:locale\" content=\"zh_CN\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dexia Crediop S.P.A v Comune Di Prato\" \/>\n<meta property=\"og:description\" content=\"MR. JUSTICE WALKER: 1. My judgment dated 25 June 2015 dealt with local government law and financial services law defences to the main claim in these proceedings. I shall refer to it as the \u201cmain claim judgment\u201d. 2. The main claim judgment did not deal with other defences. Nor did it deal with the counterclaim. 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Il assure un accompagnement rigoureux d\u00e8s la garde \u00e0 vue jusqu\u2019\u00e0 la Cour d\u2019assises, veillant au strict respect des garanties proc\u00e9durales.\",\"publisher\":{\"@id\":\"https:\\\/\\\/kohenavocats.com\\\/zh-hans\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/kohenavocats.com\\\/zh-hans\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"zh-Hans\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/kohenavocats.com\\\/zh-hans\\\/#organization\",\"name\":\"Kohen Avocats\",\"url\":\"https:\\\/\\\/kohenavocats.com\\\/zh-hans\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"zh-Hans\",\"@id\":\"https:\\\/\\\/kohenavocats.com\\\/zh-hans\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/kohenavocats.com\\\/wp-content\\\/uploads\\\/2026\\\/01\\\/Logo-2-1.webp\",\"contentUrl\":\"https:\\\/\\\/kohenavocats.com\\\/wp-content\\\/uploads\\\/2026\\\/01\\\/Logo-2-1.webp\",\"width\":2114,\"height\":1253,\"caption\":\"Kohen Avocats\"},\"image\":{\"@id\":\"https:\\\/\\\/kohenavocats.com\\\/zh-hans\\\/#\\\/schema\\\/logo\\\/image\\\/\"}}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Dexia Crediop S.P.A v Comune Di Prato - Ma\u00eetre Hassan Kohen, avocat en droit p\u00e9nal \u00e0 Paris","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/kohenavocats.com\/zh-hans\/jurisprudences\/dexia-crediop-s-p-a-v-comune-di-prato\/","og_locale":"zh_CN","og_type":"article","og_title":"Dexia Crediop S.P.A v Comune Di Prato","og_description":"MR. JUSTICE WALKER: 1. My judgment dated 25 June 2015 dealt with local government law and financial services law defences to the main claim in these proceedings. I shall refer to it as the \u201cmain claim judgment\u201d. 2. The main claim judgment did not deal with other defences. Nor did it deal with the counterclaim. 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