Sasha Rodoy v Optical Express Limited

An unsuccessful party will ordinarily pay costs, but indemnity costs require a further exercise of the court’s broad discretion. They are justified where the circumstances of the claim or the party’s conduct take the case outside the norm and make indemnity costs appropriate in the interests of justice. An unsuccessful claim is not, without more, dishonest, totally without merit or outside the norm. A party’s refusal even to engage with alternative dispute resolution recommended by a judge may weaken its claim for indemnity costs, although it does not necessarily require the party to settle.

The judgment gave reasons for an order made after the trial of a defamation claim. The claimant had lost because the court found the defamatory meanings substantially true and ordered her to pay the defendant’s costs. The issue was whether those costs should be assessed on the standard basis or the indemnity basis.

The court considered the nature of the claim, the claimant’s conduct, the evidential character of the trial, a prior judicial recommendation of alternative dispute resolution in Rodoy v Optical Express Ltd [2024] EWHC 1499 (KB), and the defendant’s refusal to engage with the subsequent ADR proposal.

1. Order. The court ordered costs on the standard basis. The claimant’s loss did not itself justify indemnity costs.
2. The court applied the principle that indemnity costs may be ordered where the circumstances of the claim or the party’s conduct take the case outside the norm, as explained in Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hamer Aspden & Johnson [2002] EWCA Civ 879. The discretion is very broad, but it must be exercised in the interests of justice.
3. The case was mainly concerned with the conclusions to be drawn from primary facts, most of which were documented. Although the claimant’s case failed, it was not dishonest, totally without merit or otherwise outside the norm. The circumstances therefore did not justify moving from the standard basis to the indemnity basis.
4. The court also considered the defendant’s failure to respond to the claimant’s proposal to pursue ADR, made after a strong recommendation by the trial judge. The court did not hold that the defendant ought to have settled. However, parties are expected to make reasonable efforts to settle and engage constructively in settlement processes, as stated in OMV Petrom SA v Glencore International AG [2017] EWCA Civ 195; [2017] 1 WLR 3465. The refusal even to entertain ADR weakened the defendant’s case for indemnity costs.

The judgment concerned reasons for a costs order made on 4 June 2026 following the trial of meaning before HHJ Lewis. The prior judgment recommended ADR: Rodoy v Optical Express Ltd [2024] EWHC 1499 (KB).