Barclay v Tuck

Indemnity costs require conduct or circumstances taking the case out of the norm. The court retains a broad discretion, and mere error, hindsight or failure on the merits does not suffice. Unreasonableness is the central consideration.

Where a party becomes legally aided during committal proceedings, summary assessment in that party’s favour is unavailable under the applicable costs rules. Costs may nevertheless be awarded on the standard basis. For an earlier period, the court may make no order as to costs where the proceedings were reasonably commenced, but both parties achieved some practical success and the overall circumstances make a costs order unjust or disproportionate.

This was a first-instance decision on costs following the dismissal of committal proceedings in [2018] EWHC 1125 (QB). The defendant sought his costs on the indemnity basis, including costs incurred after he became legally aided and costs incurred earlier as a litigant in person. The claimant sought his own costs for substantial parts of the proceedings and disputed the defendant’s entitlement.

The central issues were whether the claimant’s conduct justified indemnity costs, how the defendant’s legal-aid status affected assessment, and how costs should be allocated between the period before and the period after 8 March 2018.

1. The defendant was entitled to his costs from 8 March 2018, when he became legally aided, but only on the standard basis. From that date he was the successful party and the claimant was the unsuccessful party. The general rule that costs follow the event therefore applied under CPR 44.2(2).

2. Indemnity costs were refused. The claimant’s conduct was not oppressive, disproportionate, abusive or so unreasonable as to take the case out of the norm. The court retained a broad discretion, but the pursuit of allegations which ultimately failed did not, in the circumstances, justify indemnity costs. The claimant had reasonably commenced and pursued the proceedings, and relevant developments had occurred only shortly before the final hearing.

3. There was no order as to costs for the period before 8 March 2018. The committal proceedings were reasonably brought, and the claimant achieved substantial reductions in the offending material. Nevertheless, the claimant ultimately failed on every allegation, while the defendant’s earlier conduct had contributed to the circumstances making proceedings necessary. Having regard to all the circumstances, including the parties’ conduct and partial success, no order was the just and proportionate outcome under CPR 44.2(4) and CPR 44.2(5).

4. Summary assessment of the legally aided defendant’s costs was not permitted under Civil Procedure Rules 1998, PD 44, paragraph 9(a). The defendant’s costs were instead to be subject to detailed assessment if not agreed, together with legal-aid assessment.

5. The court also confirmed that the defendant was entitled to the reasonable costs of complying with the order to serve his witness statement and accompanying chronological bundle. Choosing not to give evidence did not justify penalising him in costs, since the burden of proving contempt rested on the claimant.

This was a first-instance costs decision following the court’s earlier judgment in the same proceedings, reported at [2018] EWHC 1125 (QB).