In Hosking & Anor v Apax Partners LLP & Ors [2018] EWHC 2732 (Ch) Mr Justice Hildyard awarded indemnity costs in a case where the claimant discontinued four days into a six week trial.

My assessment is that this was high-risk litigation aggressively and very expensively pursued after failure of one sort or another in multiple jurisdictions, without demonstrable support in the contemporaneous documentary evidence; that the shape of the proceedings abroad, and the publicity the claims seem to have been calculated to attract committed the Liquidators to an inappropriate form of action,”


The claimant liquidators brought an action seeking to impugn a a redemption of some law-debts.   It was asserted that the redemption took place at an undervalue of some  €800 million.

However the claimant discontinued its case four days into a six week trial.


The defendant’s sought indemnity costs. The claimant responded that it was inappropriate for indemnity costs to be awarded, the court had not heard all the evidence and should not reach a decision on the substantive merits of the claim.


The judge set out why this was an appropriate case in which to award indemnity costs.
    1. As acknowledged previously, I accept that there may well often be reasons against drawing an inference from the fact of discontinuance that the case has been recognised belatedly to be hopeless. There may be other reasons or drivers to which reference cannot safely or properly be made. However, in this case, the fact of discontinuance after the collapse of settlement negotiations directed to the compromise of the Liquidators’ proceedings abroad as well as here, taken together with all the circumstances to which I have previously referred, seems to me to support the thesis that the case was belatedly pursued in this jurisdiction with the aid of earlier-engineered publicity, not by reference to its perceived intrinsic merit, but as a last available means (apart from the appeal in Luxembourg) of forcing a world-wide settlement despite the failures in Luxembourg and New York, and the refusal of a stay here. This seems to me clearly to add weight to the conclusion that this is a case ‘out of the norm’.
    2. Further, the lack of any explanation for discontinuance must be weighted in all the apparent circumstances. These seem to me to include in particular
(1) the monetary forfeit of discontinuance (in that an order for adverse costs is a corollary) in any event; in this case the size of the forfeit suggests, no other explanation having been offered and in light of (2) below, that the applicants held a very dismal view of the prospects;

(2) the signs that it is not some funding restraint that has caused the discontinuance: for the Liquidators intend to proceed in Luxembourg, and it is no secret that they have enjoyed bondholder support;

(3) the nature of the claims and their reputational significance, which means that their sudden abandonment entails that the Respondents have not had the opportunity for vindication and yet would pay for the insult to the extent that their costs are irrecoverable;

(4) the abandon with which the Liquidators have sued in three jurisdictions, including an unsuitable one (New York) for a claim under the Insolvency Act against a company with its COMI here, and marshalled quantities of expert evidence, ramping up the costs of and pressures on the other parties;

(5) the overall fairness in the apparent circumstances of restricting the Respondents to recovery of costs on a standard basis, and of thereby reserving to the claimants the twin benefits of (a) any doubt as to reasonableness having to be resolved in their favour and of (b) the proportionality test, whilst denying the Respondents any prospect of vindication.

    1. The Liquidators submitted, and I agree, that neither of the following matters can be said of themselves to take a case ‘out of the norm’:
(1) Pursuit of a case to judgment which fails (even resoundingly);

(2) Pursuit of an arguable case raising issues of law and fact which could not be resolved without a trial, even if the court considers with hindsight that the case was unlikely to succeed.

    1. They further submitted that their claim was plainly arguable and had a real prospect of success; that in any event the Court could and should not make a fair assessment of the merits; and that “once their attack on the merits is stripped away, the Respondents’ grounds for seeking an order for indemnity costs are thin at best.”
    2. I accept that I should not seek at this stage summarily to determine the merits of the abandoned claims. But I do not accept that I should not make an assessment as to the purposes of pursuing the proceedings, or discount an overall view, after exchange of skeleton arguments, introduction of the primary documentation, four days of trial, and the sudden unexplained discontinuance, as to the weight of the difficulties in the way of establishing liability and more generally the egregious features of the case. Further, I consider that I am in a position to assess in broad terms the reasonableness of the pursuit and the manner of presentation of these proceedings having regard to the earlier proceedings abroad and the frailties and difficulties they had to overcome, and the sustained efforts to avoid the natural or ‘home’ jurisdiction. Put shortly, and in any event, I consider that I am in a position to determine in all the circumstances already apparent to the Court whether the case is such as fairly and properly to be characterised as ‘out of the norm’.
    3. My assessment is that this was high-risk litigation aggressively and very expensively pursued after failure of one sort or another in multiple jurisdictions, without demonstrable support in the contemporaneous documentary evidence; that the shape of the proceedings abroad, and the publicity the claims seem to have been calculated to attract, committed the Liquidators to an inappropriate form of action, it being difficult, perhaps impossible, to force the complaints into the structure of section 423; that the case always depended on extracting in cross-examination support for a thesis which had no or no material support in the contemporaneous documentation and which it clearly contradicted; and that whilst the ultimate consequences of the Recap and its fall-out might elicit the support of a jury, the claims had a much lesser chance of success before a judge in this jurisdiction.
    4. In my assessment, the attempts to litigate anywhere but in the natural home for the relevant claims seem to me to indicate an appreciation of the severe difficulties of establishing the case here. Further, the case appears to me to have been launched and pursued with a view to a settlement which the very hostile publicity against the Respondents which the way the proceedings were formulated had engendered in the USA, and the continuing echoes of that publicity in this jurisdiction, might have led the Claimants to suppose might be on the cards, whatever might be the merits of the claims in law. The desire for a jury trial in New York, which remained even after the issue of proceedings here (as demonstrated by the extraordinary and unsuccessful application for a stay of these proceedings), reinforces my perception that the Liquidators and their funders were wary of strict legal adjudication of their claims.
    5. Moreover, and in any event, I consider the following factors (all elaborated above) take this case well ‘out of the norm’:
(1) The pursuit to the doors of the Court, and four days beyond, of serious allegations of commercial impropriety, which were suddenly abandoned only when settlement talks failed, and then without explanation and without visible change in the forensic landscape;

(2) The changing nature of and inconsistencies in the case, both internally and with the expert evidence put forward;

(3) The publicity attending the case, stoked up by the prior proceedings in the USA and the highly-coloured way in which the case was presented both there and in this jurisdiction;

(4) The overall unfairness of preserving for the Claimants the twin benefits of the ordinary basis of assessment whilst exposing the Respondents, having had to respond to an expensively presented case, to the twin detriments of facing a shortfall in costs recovery and being denied the chance of vindication without explanation.

    1. In such circumstances, I do not consider the standard basis of costs would reflect the extraordinary nature of the case and its sudden discontinuance or provide a fair balance in the circumstances. I direct the costs payable by the Claimants to be assessed on the indemnity basis accordingly.
    2. I do not, however, feel able to accede to the submission that I should state that the allegations of commercial impropriety made against the 6 TPG individuals were unwarranted. That should not be taken as an indication that I had been persuaded they had a real prospect of success: on the contrary, they appeared to me to be thin. But what is sought is in the nature of an adjudication of the merits summarily: and I do not consider that would be proper. Further, as previously indicated, the ultimate commercial consequences of the Recap are such as to give rise, and indeed have given rise, to real disquiet; and that is so even though the claims made in respect of the circumstances were inappropriately framed.