Wilson v Yahoo! UK Ltd & Ors

Indemnity costs require more than an unsuccessful or totally without merit claim. The court must apply principle while responding to the particular circumstances of the case. The ordinary protection of proportionality may justify standard-basis costs where the conduct, though unreasonable, is not sufficiently grave. A substantial costs schedule should ordinarily be assessed in detail where summary assessment would risk imposing an unjustified burden on a litigant in person. An interim payment on account should reflect the court’s assessment of the likely recoverable costs, while preserving the safeguards of detailed assessment.

The claimant’s trade mark claim had already been struck out as disclosing no reasonable cause of action, and it had been recorded as totally without merit for the purposes of CPR 3.4. The present hearing concerned the defendants’ application for indemnity costs, summary assessment, an interim payment on account, and interest following Part 36 offers.

The court had to determine the appropriate basis and method of assessment, the amount to be paid on account, and the applicable interest on the defendants’ costs.

1. The defendants were entitled to their costs on the standard basis, subject to detailed assessment by a Costs Judge. The claim was without merit, the defendants had made offers to settle, and the claimant’s conduct at an interlocutory hearing was assumed to have been inappropriate and perhaps unreasonable. Those matters did not, in the overall context, amount to conduct sufficiently grave to justify indemnity costs. The case was technically focused, modest in scale, heard in about two hours, and involved no allegations of bad faith, dishonesty or deceit. ([2008] EWHC 487 (Ch), paras 6–10.)
2. The court applied the principle that the question was fact-sensitive, but held that the application could not be determined impressionistically. The decision in National Westminster Bank plc v Rabobank Nederland (Number 2) [2008] 1 All ER (Comm) 243, including its collection of earlier authorities and the material collected in Three Rivers District Council v Bank of England [2006] EWHC 816 (Comm), assisted the court in applying principle to the facts.
3. Summary assessment was inappropriate for a costs schedule totalling about £92,000. Detailed assessment would allow a Costs Judge to apply proportionality and would give a litigant in person a fair opportunity to challenge the bill. The defendants were therefore to receive £15,000 on account, payable within 28 days. ([2008] EWHC 487 (Ch), paras 11–14.)
4. Interest was ordered on the defendants’ costs at base rate plus 1 per cent from the date on which the defendants paid costs to their solicitors, or from any earlier date on which the clients became liable to pay such interest, pursuant to Rule 36.14. The order was to record separately that the claim was struck out as disclosing no reasonable cause of action and that it was totally without merit for CPR 3.4 purposes. ([2008] EWHC 487 (Ch), paras 15–18.)