Rashpal Samrai & Ors v Rajinder Kalia

Indemnity costs require conduct or circumstances taking the case out of the norm. Unproved allegations of serious sexual and financial exploitation, combined with other unreasonable conduct, may satisfy that threshold.

Where proceedings combine personal injury and non-personal-injury claims, qualified one-way costs shifting does not necessarily protect the whole claim. The court may separate the claims on a broad-brush basis and permit enforcement of an appropriate proportion of costs under rule 44.16(2)(b) of the Civil Procedure Rules 1998. Interim payments on account may be based on the approved costs budget, but enforcement may be stayed pending related wasted-costs proceedings.

The claimants had unsuccessfully brought proceedings against the defendant. The court had previously determined the substantive claims in the main judgment, [2024] EWHC 3143 (KB), and awarded costs in principle to the defendant.

This further hearing concerned the basis of assessment, the enforceability of costs against the first to fourth claimants whose claims included personal injury allegations, and interim payments on account. The court also considered the effect of pending wasted-costs applications against the claimants’ former legal representatives.

1. Basis of assessment. The court held that the basis of assessment was within the trial judge’s wide discretion. The conduct of the second, third and fourth claimants, particularly their unproved allegations that the defendant had sexually and financially exploited them through his position at the temple, took their cases out of the norm when considered with their other conduct. Their costs were therefore to be assessed on the indemnity basis. The first, fifth, sixth and seventh claimants’ costs were to be assessed on the standard basis [10].
2. QOCS. The first to fourth claimants’ proceedings included personal injury claims and therefore engaged rules 44.13 and 44.14 of the Civil Procedure Rules 1998. Because no order had been made in their favour, costs could not be enforced without permission unless an exception applied [11]-[14].
3. The non-personal-injury claims, including harassment, unpaid services, repayment of loans and expenses, and donations said to result from undue influence, were sufficiently distinct to fall within rule 44.16(2)(b). The case was not, viewed in the round, wholly a personal injury claim. The court therefore permitted enforcement of the proportion attributable to those claims. Drawing on the broad-brush approach illustrated by Brown, Jeffreys and Siddiqui, that proportion was assessed at 40%, rather than the 60% sought [15]-[22].
4. The court declined to exercise its discretion to prevent enforcement of that proportion. The claimants had entered the litigation as adults, had been warned of the risks, lacked after-the-event insurance, and had increased their jeopardy through their conduct. Financial disparity and the defendant’s own criticised conduct did not justify a different conclusion [21].
5. Interim payments. Interim payments of £100,000 were ordered in respect of each claimant. Enforcement was stayed pending determination of the wasted-costs applications, with liberty to apply if developments made lifting the stay appropriate. The claimants were also at liberty to apply to vary or discharge the orders if wasted costs were subsequently ordered [23]-[26].

First-instance costs judgment following the substantive judgment dated 9 December 2024, [2024] EWHC 3143 (KB). Permission to appeal applications concerning the substantive judgment and fundamental dishonesty finding were refused [5]-[6].