The consequences of Part 36 can be punishing, but it is a separate question whether they are unjust. The justice of Part 36 is that decisions about litigation should be economically utilitarian: it actively discourages litigation on ‘points of principle’ by making litigation not fought on a commercial basis a high stakes activity.
In Belsner v Cam Legal Services Ltd, Mr Justice Lavender determined that a solicitor who wishes to rely on having been given informed consent for the purposes of CPR 46.9(2) must not only point to a written agreement which meets the requirements of the rule, but must also show that his client gave informed consent to that agreement insofar as it permitted payment to the solicitor of an amount of costs greater than that which the client could have recovered from another party to the proceedings.
In this short decision Deputy Master Raeburn considered the effect of the Claimant’s failure to file and serve an N260 Statement of Costs in advance of the hearing before him in accordance with CPR PD 44, paragraph 9.5(4) and 9.6.
A short reminder from The Honourable Mr Justice Calver that an award of indemnity basis costs does not hand the receiving party a blank cheque.
In this short judgment Mr Christopher Hancock QC (sitting as a Judge of the High Court) confirmed the position where a party has a contractual entitlement to costs.
The defendants in this anti-competition and breach of contract case sought security for costs against the claimant.
The claimant agreed with D4-D8 to provide security for 65% of their incurred and anticipated costs. However, D4-D8 sought security at a higher level than this based upon a potential award of indemnity costs given the “wide ranging and serious allegations of impropriety, which may include deceit”.
The defendants’ case was based largely on the decisions in Danilina v Chernukhin [2018] EWHC 2503 (Comm) (which we reported on here) and Re Ingenious Litigation [2020] EWHC 235 (Ch). In both cases the court awarded security at 75%.
Another decision on indemnity costs arising from a failure to mediate.
![DSN v Blackpool Football Club Ltd (Rev 1) [2020] EWHC 670 (QB)](https://i0.wp.com/tmcls.co.uk/wp-content/uploads/2020/03/DSN-v-Blackpool-Football-Club-Ltd-Rev-1-2020-EWHC-670-QB.jpg?resize=180%2C180&ssl=1)
Having beaten his own offer at trial the Claimant was awarded indemnity costs under CPR 36.17(4)(b) from 21 days after the date on which it was made.
The Claimant also claimed indemnity costs on a broader basis and for a longer period by reason of the Defendant’s failure to engage in settlement discussions. or contemplate any form of ADR.
![Lejonvarn v Burgess & Anor [2020] EWCA Civ 114](https://i1.wp.com/tmcls.co.uk/wp-content/uploads/2020/02/Lejonvarn-v-Burgess-Anor-2020-EWCA-Civ-114.jpg?resize=180%2C180&ssl=1)
Following the dismissal of all claims by the High Court in this construction dispute, and an award of costs on the standard basis to the appellant (defendant), the Court of Appeal had to determine three issues, namely:
a) Whether it was a case in which the respondents’ pursuit of what were said to be “speculative, weak, opportunistic or thin claims” could properly be described as out of the norm such as to warrant an order for indemnity costs.
b) Whether the respondents’ failures to accept and subsequently to beat the appellant’s Part 36 offer, made at a very early stage in the proceedings, also meant (either separately or taken cumulatively with the pursuit of these particular claims) that an order for indemnity costs was warranted.
c) The relevance, if any, of the fact that the appellant’s approved costs budget was said to be £415,000, but that any assessment on the indemnity basis would start at the appellant’s actual costs figure of not less than £724, 265.
This was a decision of Jacobs J as to the entitlement of the defendant following discontinuance to an award of indemnity costs and a payment on account pursuance to CPR 44.2(8). The Court held that there was nothing “out of the norm” in the claimant’s conduct of the proceedings (in which they sought the enforcement of a Swedish arbitration award) up until a hearing of the defendant’s application to set aside in June 2017 when Robin Knowles J found that the defendant’s three original grounds of challenge were no longer maintainable, but that they had had established a prima facie case that the award was obtained by fraud.
