Indemnity costs awarded where unnecessary costs were incurred

Have a look at the judgment of HHJ Simon Brown QC in Mortgage Agency Services Number Four Limited v Alomo Solicitors.

A few lines chosen from the end of the judgment (from paragraph 30) should give you enough the flavour of it. It is not specifically an eDisclosure judgment, but it serves as a warning to any party and its lawyers who run up unnecessary costs falling on their opponents. The remedy at the court’s hands is an indemnity costs order.

HHJ Judge Alton in Jefferson v. National Freight Carriers Ltd [2001] 12 Costs 313, 321-322…..explains the vital importance of project managing and budgeting cases from the outset based on the issues raised between the parties in the statements of case: and how it should be approached.

“In modern litigation, with the emphasis on proportionality, there is a requirement for parties to make an assessment at the outset of the likely value of the claim and its importance and complexity, and then to plan in advance the necessary work, the appropriate level of person to carry out the work, the overall time which would be necessary and appropriate [to] spend on the various stages in bringing the action to trial and the likely overall cost. While it was not unusual for costs to exceed the amount in issue, it was, in the context of modest litigation such as the present case, one reason for seeking to curb the amount of work done, and the cost by reference to the need for proportionality”.

The instant case is one where the Defences were, frankly, lamentable: prolix, obscure and irrelevant with the consequences of substantial unnecessary disproportionate costs being spent by both parties. I am told that at least 11 large conveyancing files and other material were the subject of paper disposure based on the issues raised by the Defence and the witness statements becoming very lengthy. The responsibility for that squarely lies with the Defendants, the pleader and those who signed the statement of truth.

In those circumstances I am satisfied that this is a case where the conduct of the Defence is one which requires an order to indicate the Court’s displeasure: indemnity costs. Furthermore, I am satisfied that it is only fair on the Claimants that that should be the case, putting the burden of proof on a detailed assessment on the Defendants to show, if they dare to do so, that the Claimants costs – apparently disproportionately high and in excess of approved budget as they are – are ‘unreasonable’, rather than vice versa i.e. having to prove that their own costs are ‘reasonable’.

You might like to look also at Vector Investments v Williams, where a successful party, otherwise entitled to its costs, was hit with a £20,000 costs order for the manner in which it gave disclosure and the expense caused to the other party as a result.


About Chris Dale

I have been an English solicitor since 1980. I run the e-Disclosure Information Project which collects and comments on information about electronic disclosure / eDiscovery and related subjects in the UK, the US, AsiaPac and elsewhere
This entry was posted in Discovery, eDisclosure, eDiscovery, Electronic disclosure, Litigation. Bookmark the permalink.

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