APPLICATION FOR INDEMNITY COSTS REFUSED: A HIGH COURT DECISION

October 29, 2015 · by · in Conduct, Costs, Uncategorized

In the judgment today in Harlequin Property (SVG) Limited -v- Wilkins Kennedy [2015] EWHC 3050 (TCC) Mr Justice Coulson refused an application for indemnity costs and reduced the sum claimed from £51,787.50 to £35,000.

THE CASE

The claimant made a number of applications, including an application to revise the terms of an order for security for costs. The judge dismissed the application in relation to security for costs. He considered that the claimant should pay the costs relating to the application for security, but not on the indemnity basis.

THE JUDGMENT ON COSTS

“6. COSTS

  1. The costs of the applications relating to disclosure/inspection will be reserved. That leaves the costs of the claimants’ unsuccessful application in respect of security for costs.
  2. The defendant sought an order that those costs be assessed on an indemnity basis pursuant to CPR 44.3(1)(b). I indicated at the end of the hearing that, whilst I agreed that the claimants were liable for the costs of that application, it seemed to me that the assessment should be on the standard, rather than the indemnity, basis.
  3. Although the application could fairly be described as optimistic, there was no improper or unreasonable conduct on the part of the claimants in making or pursuing the application. There was nothing which took the situation away from the norm: see Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hamer Aspden & Johnson [2002] EWCA Civ 879. The high degree of unreasonableness (Noorani v Calver [2009] EWHC 592 (QB)) necessary for an order for indemnity costs was absent. In the round, I conclude that it would not be appropriate to order the assessment on anything other than the standard basis.
  4. The claimants’ costs for all of the various applications on 23 October were £51,787.50, together with disbursements and VAT, making a total of £104,766. The defendant’s draft bill relating to security alone (ie excluding the various disclosure/inspection applications) was in the sum of £51,230.50. However it included items, such as attendance at the hearing for 6 hours, which actually related to all of the applications I dealt with at the hearing, not just the security application. Reductions are therefore required on that basis alone.
  5. I consider that the sum of £51,230.50 was excessive and disproportionate for costs incurred on the application to modify the existing order relating to security for costs. The argument on that application took less than an hour. I consider that every element of the draft bill is inflated. The telephone attendances were unnecessary, and the preparation of documents should have been minimal. Counsel’s fees were also too high for such a straightforward application, even if some additional allowance for fees is justified because of the claimants’ erroneous insistence in August that the application was urgent. In my view, a reasonable sum for the defendant’s costs of this application could not be more than £35,000. I therefore summarily assess the defendant’s costs of the security application in that figure.”

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