Khan-Ghauri v Dunbar Bank Plc

An indemnity costs order against a litigant who was an assisted person must preserve the statutory limit on liability for the assisted period. The order should make liability subject to the amount it is reasonable for the assisted person to pay under Legal Aid Act 1988, section 17. Transitional provisions may preserve the earlier legal aid regime where representation under Part 14 was signed before the replacement legislation came into force.

Mr Khan-Ghauri brought four actions, which failed. On 15 June 2000, Mr Justice Pumfrey ordered him to pay the defendants’ costs on an indemnity basis. Lord Justice Peter Gibson later refused permission to appeal on the general merits and on the costs order, but preserved a limited issue concerning the effect of Mr Khan-Ghauri’s legal aid status. The present application concerned whether the costs order should account for periods during which he was an assisted person and whether the Legal Aid Act 1988 or the Access to Justice Act 1999 applied.

Decision

1. Application allowed. Lord Justice Rix gave the judgment. Lord Justices Chadwick and Kennedy agreed. The time for applying for permission to appeal on the limited costs issue was extended, permission was granted, and the costs order was amended.
2. The court confined the hearing to the preserved legal aid issue. The applicant was not permitted to reopen the general merits of the underlying litigation or the wider costs decision.
3. The indemnity basis of assessment remained appropriate. However, the order had to protect the claimant for any period during which he was an assisted person. His liability for that period was therefore limited to the amount which, under section 17 of the Legal Aid Act 1988, it might be reasonable for him to pay. The costs remained subject to detailed assessment if not agreed.
4. The court accepted that section 11 of the Access to Justice Act 1999 came into force on 1 April 2000. Article 5 of the Access to Justice Act 1999 (Commencement No 3, Transitional Provisions Savings) Order 2000 nevertheless preserved the application of the earlier Act to legal aid representation under Part 14 signed before that date. The amended order therefore correctly referred to the 1988 Act rather than the 1999 Act.

• High Court: On 15 June 2000, Mr Justice Pumfrey ordered Mr Khan-Ghauri to pay the defendants’ costs on an indemnity basis, subject to detailed assessment if not agreed.
• Court of Appeal: On 8 February 2001, Lord Justice Peter Gibson refused permission to appeal on the general merits and on the indemnity costs order, while preserving the limited legal aid issue.
• Court of Appeal: In [2001] EWCA Civ 1003, the court extended time, granted permission on that issue and amended the costs order to reflect the statutory protection for assisted persons.