Axon v Ministry of Defence

Costs are assessed on the standard basis unless the case or conduct takes it outside the norm. An unsuccessful claimant need not pay a third party’s costs merely because the defendant reasonably joined that party for protection. The court must exercise its discretion under the Senior Courts Act 1981, the Civil Procedure Rules 1998 and the overriding objective. It may allocate third-party costs by reference to the claimant’s effective use of the proceedings. Where disclosure materially benefits the claimant and the claimant supports continuation of the third-party proceedings for that purpose, the claimant may be ordered to pay costs incurred up to completion of disclosure. Costs thereafter may remain payable by the defendant that brought the additional claim.

The claimant’s privacy claim against the Ministry of Defence had been dismissed in the substantive judgment. The defendant sought its costs on the indemnity basis and sought to make the claimant responsible for the costs of News Group Newspapers Ltd, joined as a third party in indemnity proceedings. The claimant had opposed a stay of those proceedings so that disclosure could continue, and the disclosure produced material relevant to his claim. The costs judgment concerned the proper allocation of the defendant’s and third party’s costs, including the effect of the claimant’s insurance and the parties’ conduct.

1. Costs of the claim. The claimant was ordered to pay the defendant’s costs, assessed if not agreed on the standard basis. The defendant had not shown circumstances or conduct taking the case outside the norm so as to justify indemnity costs. The claimant’s conduct and the nature of the information had contributed to the substantive result, but they were insufficient when considered with the case as a whole.
2. Third-party costs. Under section 51(1) of the Senior Courts Act 1981 and CPR rule 44.2, the court had a broad discretion, to be exercised consistently with the overriding objective. The general rule that the unsuccessful party pays the successful party’s costs was only a starting point.
3. The claimant was not ordered to pay all NGN’s costs. The substantive claim against the Ministry had failed, and any claim against NGN would also have failed because the Article 8 and Article 10 balance would have favoured publication. It was therefore not reasonable to transfer all of NGN’s participation costs to the claimant. The Ministry’s status as a public body and the claimant’s insurance did not alter that conclusion.
4. The claimant had nevertheless chosen to oppose a stay so that he could obtain disclosure through the third-party proceedings. It was just that he bear NGN’s properly incurred costs up to and including 17 November 2015, when disclosure was complete. The Ministry was ordered to pay NGN’s costs thereafter. If not agreed, those costs were to be assessed on the standard basis.
5. The court ordered interim payments on account, subject to the short opportunity given for written submissions as to their division. Any application for permission to appeal the costs decision was to be made within seven days.

Not stated in the judgment. The decision concerned costs following the dismissal of the substantive claim.