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  EWHC 2503 (Comm) (which we reported on here) and Re Ingenious Litigation  EWHC 235 (Ch). In both cases the court awarded security at 75%.
Another decision on indemnity costs arising from a failure to mediate.
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.
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.
Mr Justice Teare determined an application for indemnity costs following the dismissal of the second claimant bank’s US$77 million claim for an indemnity from the defendant underwriter pursuant to a war risks insurance policy for the constructive total loss of the vessel BRILLANTE VIRTUOSO by piracy.
This was an appeal by the mother in Children Act proceedings against an order that she do pay £109,394 in costs. In the course of the proceedings the mother had been given a four year prison sentence in Russia for attempting to bribe a police officer to instigate criminal charges against the father in order to further her own claim on the children. Despite her incarceration, the mother had continued to pursue an appeal against an order that the father have custody of the children, before finally conceding, leaving only the incidence of costs to be decided.