Robin Simon Graham Makin v The Ministry of Justice

An indemnity costs order is a departure from the norm, justified where the conduct of the litigation or the circumstances take the case outside ordinary and reasonable proceedings. Dishonesty or moral blame is unnecessary; improper or unreasonable conduct may suffice.

On the indemnity basis, doubts about whether costs were reasonably incurred or reasonable in amount are resolved in favour of the receiving party, although unreasonable costs remain disallowable and proportionality is not applied.

Under Civil Procedure Rules 1998 Part 44.11, the court may disallow costs or order payment of costs caused by rule-breaking or unreasonable or improper conduct. The jurisdiction is punitive or disciplinary rather than compensatory, and any sanction must be proportionate.

The claimant pursued detailed assessment proceedings concerning costs arising from earlier litigation against the Ministry of Justice. The parties had served competing bills of costs, and several hearings and applications followed.

The court considered the incidence and assessment of the defendant’s costs, including applications for default costs certificates, directions, and a set-aside application. It also considered whether the claimant’s costs should be reduced for misconduct under CPR Part 44.11.

The central issues were whether the claimant’s conduct justified indemnity costs, whether the court could determine misconduct on the papers, and whether the claimant’s costs should be reduced because of unreasonable or improper conduct, including overcharging and failures to assist the court.

1. Indemnity costs. The court applied the wide discretion recognised in Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hamer Aspden and Johnson and Borealis v Balmoral. The question was whether the conduct or circumstances took the case outside the norm of ordinary and reasonable proceedings. Dishonesty or moral blame was unnecessary. The claimant’s conduct in relation to the payment of cheques, the abandoned hearing on 3 May 2019, and associated dealings was improper and unreasonable and substantially exceeded the threshold.
2. The defendant’s costs of the 6 April 2018 application and the 3 May 2019 hearing were therefore awarded on the indemnity basis. The court summarily assessed those costs, together with other costs assessed on the standard basis, at £35,250 in total.
3. Effect of indemnity assessment. Under CPR Part 44.3, proportionality was not an issue on the indemnity basis. Doubts about whether costs were reasonably incurred or reasonable in amount were resolved in favour of the receiving party, although unreasonable costs remained disallowable.
4. Misconduct under Part 44.11. Applying Gempride Limited v Bamrah and others, the jurisdiction was non-compensatory and enabled the court to mark disapproval of a failure to comply with duties owed to the court. It applied to unreasonable or improper conduct, but not conduct amounting only to ordinary negligence. The burden lay on the applicant, the court retained a discretion, and any order had to be proportionate.
5. The claimant had been given a reasonable opportunity to provide written submissions and evidence, and could have requested an oral hearing specifically on misconduct. The court was entitled to proceed on the papers because the relevant incidents were documented or recorded and there was sufficient evidence to reach a fair decision.
6. The claimant’s conduct, including abusive and disruptive behaviour, failure to disclose material matters in an emergency injunction application, attempts to derail proceedings, and the presentation and persistence of an egregiously excessive bill, was unreasonable and improper. The court reduced the claimant’s costs in the main action by 70% under CPR Part 44.11.
7. The court recorded that the defendant’s misconduct allegations were not established. The claimant’s costs were reduced by 70%, with consequential orders concerning payment, set-off, interest and the remaining detailed assessment.

The judgment describes earlier procedural steps in the detailed assessment proceedings, including orders of the Liverpool District Registry and the Senior Courts Costs Office. No appeal from the present judgment is stated.