Murray & Anor v Bernard

The ordinary costs rule applies to hostile probate litigation: the unsuccessful party should pay the successful party’s costs. A party’s initial refusal to mediate does not automatically justify a costs penalty where the party later accepts mediation and the mediation fails for another reason. The relevant question is whether there was an unreasonable refusal to mediate in the circumstances. Indemnity costs require conduct sufficiently serious to cross the boundary from ordinary unreasonableness, and a bad case may still attract costs on the standard basis.

The court dealt with costs consequential on an unsuccessful challenge to a will and probate grant. The principal issues were whether the successful claimants’ initial refusal to mediate justified depriving them of their costs, whether costs should be awarded on the indemnity basis, and whether a payment on account should be ordered. The court also gave directions concerning possible double recovery in relation to an unsuccessful amendment application made at the start of the trial.

1. Ordinary costs order. The litigation was hostile and arose from the defendant’s decision to oppose the grant of probate. It was therefore to be treated as ordinary adverse litigation. Under Civil Procedure Rules 1998, CPR 44, the usual presumption was that the unsuccessful party should pay the successful parties’ costs.
2. Mediation. A refusal to mediate may be taken into account when determining costs where the refusal is unreasonable. The claimants had initially refused mediation, but subsequently changed their position and indicated that they were prepared to mediate. The mediation did not occur because the defendant considered that he was not ready. The claimants were not to be fixed with their earlier position, and there was no operative refusal to mediate capable of justifying a costs penalty.
3. Basis of assessment. The defendant’s case was bad and came close to the boundary for indemnity costs, but did not cross it. Costs were therefore ordered on the standard basis.
4. Payment on account and assessment. The defendant was ordered to pay £45,000 on account of costs. The costs judge was directed to consider whether the separate brief fee claimed for the unsuccessful forgery amendment application involved double recovery against the trial brief fee or refreshers.