Pepin v Watts & Anor

The indemnity principle is infringed only where the paying party has no liability, express or implied, to pay the claimed costs in any circumstances. A merely theoretical liability is sufficient; its practical likelihood is not decisive. A failure to provide the usual costs certificate is not necessarily fatal where the relevant provisions are not mandatory and the indemnity issue has been fully considered. The decision whether to postpone payment of summarily assessed costs is discretionary. The Court of Appeal will interfere only where the judge has plainly gone wrong.

The applicant brought proceedings against a Surrey police officer. A District Judge ordered him to pay the costs of a hearing concerning an application to strike out the claim as an abuse of process. Cooke J refused permission to appeal on the merits but granted permission on the question whether the officer was liable for the costs of his solicitor, and therefore whether the indemnity principle was infringed.

Davis J dismissed the appeal and summarily assessed the costs. The applicant sought permission to appeal, arguing that the officer had no real liability for the solicitor’s costs, that the absence of a costs certificate was fatal, and that immediate payment would unfairly prejudice a litigant in person receiving income support.

1. Application refused. The appeal would have been a second appeal and raised no important point of principle or practice, nor any other compelling reason for the Court of Appeal to hear it.
2. The indemnity principle was not infringed. The relevant question was whether there was an express or implied agreement that, under no circumstances, would the party claiming the costs be liable to pay them. The possibility that the liability was theoretical rather than practical was sufficient. Section 88 of the Police Act 1996 gave the Police Authority and Chief Constable power, but not a duty, to pay a police officer’s costs. That created a possible liability analogous to an employer’s or trade union’s payment of costs for an employee or member.
3. The absence of the usual certificate in the statement of costs was not fatal. The alleged error arose from a forgivable misunderstanding, and the relevant provisions were not mandatory. The indemnity issue had nevertheless been fully considered on its merits.
4. The postponement of payment of summarily assessed costs under CPR 44.3 was a matter for the judge making the order. Appellate interference was justified only if there were grounds for concluding that the discretion had plainly been exercised wrongly. Davis J had considered the applicant’s asserted prejudice and had been entitled to order payment within 21 days.

• Court of Appeal (Civil Division): refused permission to appeal from Davis J’s decision.
• High Court, Queen’s Bench Division: Davis J dismissed the appeal from the District Judge’s costs order and summarily assessed costs at £650.
• Guildford County Court: the District Judge ordered the applicant to pay £1,000 costs for the hearing concerning the proposed strike-out application.
• Cooke J refused permission to appeal on the merits but granted permission on the indemnity-principle issue.