Summary of Recent Cases – Costs

Costs Following Successful Finding of Contempt

Brighton & Hove Bus & Stage Coach Ltd v (1) Sheridan Brooks (2) Merihan Tadrous (3) Nabil Tadrous [2011], EWHC 2810 (Admin) 20/10/11

Following findings of contempt against two family members of a Claimant in which the Claimant’s daughter was 6 months imprisonment suspended for 12 months and 3 months imprisonment for the Claimant’s husband suspended for 12 months, the Court ordered the relatives to pay 70% of the Defendant insurer’s costs. The case against a third family member failed entirely so she was entitled to her costs of the action. The Defendant’s insurer’s costs were reduced first to take into account the lack of success against the third family member which reduced the costs by 15%. The Court also took into account that the defendant’s insurer’s allegation that the entire claim was false was not upheld and that parts of the allegations for contempt based on the witness statements did not succeed to arrive at a 30% reduction, with an interim payment of £10,000 on account ordered by the Court.

A Party Should Not be Made to Pay Indemnity Costs Where It Had Abandoned An Application To Strike Out

IKOS CIF Ltd & Ors v Hogan Lovells International LLP [2011], EWHC 2724 (Ch), 14/10/11

When considering whether to make an award for indemnity costs, it was necessary to consider whether a party’s conduct was such that it should attract the court’s censure. The Respondent had not made a misleading statement and it was not game playing. It had made a striking out application which was not hopeless, and though no reason was given for its abandonment the application was not improper and it was supported by a witness statement. It was held that mere abandonment should not give rise to indemnity costs, more was needed. There needed to be more than a mere departure from the norm. In the instant case abandonment had not caused extreme costs to be incurred. Further it had not cast doubt on the propriety of the original application, therefore the Applicant was not entitled to indemnity costs.

Multi-Party Actions: Court’s Interpretation of Time Spend on CFA’s and Referring to ATE Insurers

Yao Essaie Motto & Ors v (1) Trafigura Ltd (2) Trafigura Beheer BV [2011] EWCA Civ 1150

The judge was wrong to depart from the approach in Lownds v Home Office (2002) EWCA Civ 365 that if the total costs claimed appeared to be disproportionate, they were, in effect, to be rendered proportionate by allowing only those items which were necessary, and then only in a reasonable sum. It was important the court encouraged a consistent approach. In relation to the vetting costs in a multi-party action, the judge was entitled to conclude that he had insufficient evidence to form a view on the proportionality of the costs. The judge’s findings that it was not unreasonable for the Claimant’s solicitor’s to have issued proceedings quickly and that, in any event, the failure to follow the spirit of any pre-action protocol had not had any significant effect on the level of the Defendant’s costs. Costs incurred in connection with a CFA and ATE insurance were ultimately attributable to the need of a litigant to fund the litigation as opposed to the actual funding of the litigation itself. The time devoted by solicitors to negotiating the terms on which they were to be engaged could not be properly described as an item incurred by the client for the purpose of the litigation. Instead they should generally be treated as part of a solicitor’s overheads or expenses. With regard to the costs incurred in referring to the ATE insurers during the litigation, it could be fairly said that those stood on a different footing in that such costs would have been incurred after, probably long after, the ATE had been taken out. Despite that, those costs were not recoverable from the Defendant.

November 27, 2011 · Editorial Team · Comments Closed
Posted in: Cases