PZX, R (on the application of) v Secretary of State for the Home Department

The court has a wide discretion to award costs on the indemnity basis. The governing question is whether the conduct of a party, or other circumstances of the case, take the litigation out of the norm. This means conduct outside the ordinary and reasonable conduct of proceedings, rather than conduct that is merely unusual. Unreasonableness is sufficient; dishonesty or moral blame is unnecessary. The assessment must consider the nature and importance of the failure, its connection with the issue being litigated, and the wider context. Procedural compliance is required equally in public law litigation. Unexplained refusal to clarify the statutory basis for release and failure to comply with an order to file a skeleton argument justified indemnity costs.

The claimant, an Algerian national detained under immigration powers, brought judicial review proceedings seeking accommodation and release from detention. The defendant substantially acceded to the interim relief sought, and the court ordered costs to follow the event.

The claimant then sought assessment of those costs on the indemnity basis. The application concerned the defendant’s refusal, before an adjourned hearing, to identify the statutory basis on which release would occur, together with its failure to file a skeleton argument as ordered. The central issue was whether that conduct was unreasonable and took the case out of the norm.

1. Disposition. Costs followed the event, and the claimant’s costs were ordered to be assessed on the indemnity basis.
2. Section 51 of the Senior Courts Act 1981 and CPR 44.2(1), read with CPR 44.3 and 44.4, confer a wide discretion. The starting point is the wording of the rules, and the discretion must be exercised to deal with the case justly under CPR 1.1(1).
3. Following Excelsior Commercial and Industrial Holdings Ltd and Esure Services Ltd v Quarcoo, indemnity costs are justified where the conduct of a party or other circumstances take the case out of the norm. The expression refers to conduct outside the ordinary and reasonable conduct of proceedings. There is no exhaustive list of circumstances, and moral condemnation is unnecessary.
4. The relevant assessment is fact-sensitive. The court must consider the nature of the failure, the importance of the issue being litigated, the connection between those matters, and the wider context. The approach applies to unreasonable conduct by either party.
5. Procedural rules and court orders apply with full force in public law litigation. The defendant’s unexplained refusal to identify the statutory basis for the claimant’s release, despite the court’s concern and the claimant’s vulnerability, was unreasonable. Its failure to file a skeleton argument in breach of an order, without meaningful explanation or apology, was also unreasonable.
6. Those matters cumulatively constituted unreasonable litigation conduct outside the norm. The application for indemnity costs was therefore granted.