Eva Green v White Lantern Film (Britannica) Limited & Anor

An indemnity costs order is justified where conduct of the proceedings takes the case outside the norm. Knowingly advancing coordinated false evidence, together with excessive pleadings and unjustified serious allegations, may warrant indemnity costs even before a rejected Civil Procedure Rules 1998 Part 36 offer takes effect.

Part 36 ordinarily requires all the successful party’s costs to be paid on the applicable enhanced basis. Departure is permitted only where the consequences would be unjust, having regard to all the circumstances. That presents a formidable obstacle. A late-disclosure complaint will not ordinarily justify reducing the successful party’s Part 36 costs where the disclosure should have been managed by the complaining party and the alleged prejudice is insufficiently established.

This was a consequentials hearing following the trial judgment in the claimant’s contractual claim, reported at [2023] EWHC 930 (Ch). The claimant had succeeded in recovering a $1 million fee, the defendants’ defences had failed, and their tort counterclaims had been dismissed.

The court determined the appropriate basis of costs, allocation of liability between the defendants, the effect of two episodes of late disclosure, and the amount of an interim payment on account. The claimant relied on a rejected Part 36 offer. The defendants also considered whether to seek permission to appeal but made no application to the trial judge.

1. Outcome. The defendants were ordered jointly and severally to pay the claimant’s costs. Costs incurred after 18 August 2022 were payable on the indemnity basis under Civil Procedure Rules 1998 Part 36.17, with interest at 10 per cent over base rate and an additional payment of £75,000.

2. The pre-18 August 2022 costs were also ordered to be assessed on the indemnity basis. Applying the test in Excelsior Commercial & Industrial Holdings Limited v Salisbury Hamer Aspden & Johnson [2002] EWCA Civ 879, the case was outside the norm. The defendants’ evidence had been knowingly false and coordinated, and their defence was essentially based on that false case. The prolix and vague pleadings, failed serious allegations, aggressive conduct and pressure placed on the claimant reinforced that conclusion. The court’s disapproval could properly be expressed through indemnity costs.

3. No allocation of liability was made between White Lantern and SMC. The proceedings had been controlled and run by, and for the benefit of, SMC. White Lantern was nominal, and joint and several liability avoided the risk that the costs order would go unsatisfied.

4. The defendants’ objection based on Mr Merrifield’s late disclosure was rejected. Under Part 36.17, the ordinary consequences applied to all the successful party’s costs unless injustice was shown. The defendants failed to overcome the formidable obstacle to departure. The late disclosure was within the defendants’ disclosure responsibility, was not deliberately concealed, largely supported the claimant’s case, and did not establish a sufficient basis for deduction.

5. The claimant’s own late disclosure was treated differently. The court expressed disapproval by depriving her of her own costs incurred in providing the late and further late disclosure. It would be unjust for the defendants to pay those costs.

6. An interim payment on account of costs of £1.2 million was ordered. The court’s task was to estimate likely recovery with an appropriate margin for error, rather than identify an irreducible minimum. The lack of detailed costs information and the late-disclosure adjustment justified ordering approximately 70 per cent of the stated costs.

The judgment records that the defendants were considering an appeal but had made no application for permission to appeal to the trial judge. No appellate decision is stated.