Ashraful Alam Khokan v Jawad Hossain Nirjhor (Costs)

Where a claim is struck out for failure to comply with a self-executing costs order, the claimant is ordinarily the unsuccessful party and the defendant is ordinarily entitled to costs under Civil Procedure Rules 1998, r 44.2. The court must consider all the circumstances, including litigation conduct, pre-action conduct, settlement and ADR conduct, and any admissible offers.

Where no trial will take place, the costs judge should not conduct a mini-trial or determine disputed merits. Failure to engage in ADR does not automatically justify a costs penalty. A costs budget may be revised only where a significant development warrants revision and the application is made promptly. Indemnity costs require conduct or circumstances outside the norm.

The claimant brought a defamation claim concerning publications made by the defendant on social media. The claim was automatically struck out after the claimant failed to pay an outstanding costs order by the specified deadline. The defendant obtained judgment in his favour and sought his costs on the indemnity basis, together with substantial revisions to his costs budget.

The claimant sought costs orders against the defendant, relying principally on alleged failures to engage with the pre-action protocol, settlement and ADR, and on the merits of the defamation claim. The court determined the appropriate costs order, the permitted budget revisions, the basis of assessment, and the costs of the consequential hearing.

1. The defendant was the successful party for the purposes of Civil Procedure Rules 1998, r 44.2(2). The self-executing strike-out order had brought the claim to an end, and, insofar as an application under r 3.5 was required, that application was allowed. The general rule therefore applied: the claimant was to pay the defendant’s costs unless the circumstances justified a different order.

2. The court’s discretion under r 44.2(4)–(5) required consideration of all relevant circumstances, including the parties’ conduct before and during the proceedings. The claimant’s late abandonment, failure to pay the earlier costs order, and unsatisfactory evidence concerning his finances supported application of the general rule. The defendant’s earlier pre-action failures had already attracted a costs sanction and did not justify a further departure.

3. The court declined to determine the disputed authenticity of intelligence reports or diplomatic correspondence. Once there was to be no trial, it was not the function of the costs court to decide whether the claim or defences would have succeeded. A mini-trial concerning alleged social-media abuse would likewise have been disproportionate.

4. Failure to engage in ADR, even if unreasonable, did not automatically require a costs penalty. The correspondence showed some engagement by the defendant, and the overall conduct did not justify an order against him.

5. Applying r 3.15A, revisions to the disclosure, witness-statement, trial and PTR phases, and specified contingencies, were permitted where they reflected significant developments raised promptly or connected with the consequential hearing. Other revisions were refused because the need for them had not been raised promptly.

6. Indemnity costs were refused. Although the claimant’s conduct had been marked by earlier indemnity costs orders, the unresolved allegations of dishonesty and impropriety on both sides could not fairly be determined on the consequential costs application. The claimant was ordered to pay the defendant’s costs on the standard basis. The costs of the consequential hearing were summarily assessed at £5,500 and the permitted budget variations were limited as stated.