Andrew Breeze & Anor v Chief Constable of Norfolk Constabulary

Indemnity costs are exceptional but do not require dishonesty or moral blame. The court asks whether conduct or circumstances, viewed in the litigation as a whole, took the case outside the norm through significant unreasonableness or inappropriateness. Serious allegations may be necessary to establish malicious prosecution or misfeasance, but they must be pursued with circumspection and evidential foundation. A cumulative pattern of thin or far-fetched allegations, inconsistency with contemporaneous documents, an unfocused factual enquiry, irrelevant evidence and serious allegations pursued without foundation may justify indemnity costs. The court need not identify a particular increase in costs caused by each act, but the order must remain compensatory and proportionate. Failure to seek strike out or summary judgment, late disclosure, or absence of a settlement offer does not necessarily prevent the order.

Two claimants brought claims for malicious prosecution and misfeasance in public office arising from a discontinued fraud prosecution. Following a 12-day trial of liability issues, the claims were dismissed in judgment handed down on 17 October 2025. The present hearing concerned the defendant's application for indemnity costs from 21 December 2024, after a letter inviting discontinuance and warning of such an application. The defendant relied on the cumulative pursuit of serious, weak and evidentially unsupported allegations. The claimants argued that the allegations were inherent in the causes of action and that the defendant's disclosure failures, lack of an earlier strike-out or summary-judgment application, and failure to make a settlement offer made indemnity costs unjust. The central issue was whether the litigation had been pursued in a manner taking it outside the norm.

Application granted. The defendant was awarded indemnity costs from 21 December 2024, principally in respect of trial preparation and the trial.

1. CPR 44.3 makes the standard basis the ordinary basis of assessment. Indemnity costs require conduct or circumstances taking the case outside the norm. Dishonesty or moral blame is unnecessary, but there must ordinarily be significant unreasonableness or inappropriate conduct. The court applied the principles stated in Three Rivers DC v Bank of England [2006] EWHC 816 (Comm) and National Westminster Bank plc v Rabobank Nederland [2007] EWHC 1742 (Comm).
2. The assessment is a broad discretionary exercise. The criticised conduct must be considered in the context of the litigation as a whole, and its cumulative effect may be decisive. The receiving party need not prove that a particular act increased costs by a specific amount, but the order remains compensatory and must not have a disproportionate effect.
3. Serious allegations may be necessary to establish malicious prosecution or misfeasance in public office, but they should be pursued with circumspection and proper evidential support. The judge agreed with Grier v Lord Advocate [2022] CSIH 57; 2023 S.C. 116 that investigative mistakes or omissions do not readily establish malice. The seriousness of the allegations was reinforced by Sinclair v Chief Constable of West Yorkshire & British Telecoms Plc (unreported, Court of Appeal, 12 December 2000) and Hussain-v-Chief Constable of West Mercia [2008] EWCA Civ 1205.
4. The claimants pursued an unfocused factual enquiry, serious allegations without a proper foundation, allegations irreconcilable with contemporaneous documents, inconsistent positions about the officers' state of mind, and evidence with little or no probative value. Taken cumulatively, these matters took the case outside the norm.
5. A failure to seek strike out or summary judgment did not prevent an indemnity award. Strike out generally proceeds on the pleaded facts without evidence, while summary judgment must not become a mini-trial. In this complex evidential case, neither application was a realistic prerequisite.
6. Earlier disclosure failures had already attracted separate costs consequences, and later disclosure had no significant effect on the liability issues. The warning letter was not a Part 36 offer and the absence of a settlement or drop-hands offer did not preclude indemnity costs.

The claim was issued in March 2015. Liability issues were tried over 12 days and the claim was dismissed in judgment handed down on 17 October 2025. The present judgment determined the defendant's subsequent costs application.