Rawlinson and Hunter Trustees SA & Ors, R (on the application of) v Central Criminal Court & Anor

The court has a wide discretion when deciding costs. Indemnity costs are appropriate only where conduct or circumstances take the case out of the norm, ordinarily through significant unreasonableness or other inappropriate conduct. All relevant circumstances must be considered. A concession or abandonment of issues should not generally be discouraged by an indemnity costs order. A separate costs award may be made for an interested party where that party has a distinct interest and the complexity of the case justifies separate representation. Any award remains subject to control against duplication and unreasonable use of leading counsel.

This was a judgment on costs following successful judicial review claims concerning search warrants issued in connection with a Serious Fraud Office investigation. The court had previously quashed the warrants, declared the searches and seizures unlawful, and ordered the Director of the Serious Fraud Office to respond to applications for indemnity costs.

The issues were whether costs in the two claims should be assessed on the standard or indemnity basis, whether Vincent Tchenguiz should receive a separate costs award as an interested party, and what limits should apply to representation and duplicated work.

1. Indemnity costs. The court held that the costs in both claims should be assessed on an indemnity basis. The applicable principles included the wide discretion recognised in Excelsior Commercial and Industrial Holdings Ltd v Salisbury Ham Johnson and Others [2002] EWCA Civ 879, and the requirement that conduct or circumstances take the case truly out of the norm. The former Director had failed to discharge the critically important duty to place accurate and comprehensive material before the judge seeking the warrants. The errors were serious, foreseeable in their consequences, were not accepted until a late stage, and led to exceptionally serious proceedings.
2. The court applied the same reasoning to the VT action. Earlier concessions and the claimants’ previous indication that indemnity costs would not be sought absent bad faith did not prevent an indemnity order in light of the subsequent conduct and the continuing need to expose the errors publicly.
3. Separate costs for the interested party. Applying Bolton MDC v Secretary of State for the Environment (Costs) [1995] 1 WLR 1176, the court held that costs are always discretionary and that a second set of costs may be awarded even where the issues could have been covered by one legal team. Vincent Tchenguiz had interests distinct from those of Rawlinson and Hunter, including his personal position as a key suspect in a highly publicised criminal investigation. The complexity of the case justified separate representation.
4. The court limited recovery to one leading counsel for each of Rawlinson and Hunter and Vincent Tchenguiz. Solicitors’ costs were recoverable from only one solicitor where preparatory work had been duplicated. The RT claimants recovered 80 per cent of their costs on the indemnity basis, reflecting their unsuccessful claim against the police, and only one leading counsel was allowed.