18th Mar 2022
Peter Knox QC (instructed by Taylor Wessing LLP) for the Claimant in the Contract Claim/Defendants in the Defamation Claim
MR JUSTICE FREEDMAN:
Judgment was handed down in this matter on 17 December 2021, having been handed down in draft in October 2021. This judgment is following consequential submissions in this matter heard on 17 December 2021 and again on 21 January 2022. This judgment will consider the following matters, namely
(1) A determination as to whether the costs of the Defamation Claim (claim number BL-2018-002369) are to be assessed on the indemnity basis or the standard basis;
(2) Whether the ATE premium may be recovered;
(3) A determination as to whether the costs of the Contract Claim (claim number BL-2019-001483) are to be assessed on the indemnity or the standard basis;
(4) The costs of the claim and deductions;
(5) Payment on account of costs;
(6) Release of security for costs;
(7) Interim payment;
(8) Directions on the Astra Parties’ application to strike out the claim BL-2021-00680;
(9) Musst’s Parties’ claim to a right to inspect the books and records relating to Crown II and Crown III.
II The costs in the Defamation Claim
By the Court’s judgment dated 17 December 2021, the Court, among other things, dismissed the claim in defamation and the counterclaim relating to disparaging statements. There was no issue between the parties that the costs of the Defamation Claim should be paid by the unsuccessful Claimants to the Defendants. There remained an issue as to whether those costs should be assessed on the standard or indemnity basis. The Court has had the benefit of full skeleton arguments in respect of this issue from Ms Sjøvoll counsel on behalf of the Defendants in the Defamation Claim, and Mr Glen counsel on behalf of the Claimants in the Defamation Claim. It has also been addressed orally by both counsel.
(a) The legal principles
There is no issue between the parties as regards the legal issues. CPR 44.3 permits the assessment of costs to be carried out on either the standard or the indemnity basis. If costs are assessed on the indemnity basis, any doubt as to whether costs were reasonably incurred will be resolved in favour of the receiving party: see CPR 44.3(3). Further, in respect of indemnity costs, there is no proportionality requirement.
It follows that the difference between indemnity and standard costs can be a matter of real significance for the receiving party. The Court has a wide discretion when considering what order should be made as to costs. CPR 44.2 includes:
“(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including—
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(c) any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply.
(5) The conduct of the parties includes—
(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction—Pre-Action Conduct or any relevant pre-action protocol;
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and
(d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.”