Libyan Investment Authority & Ors. v Mr Roger Milner King & Ors.
[2023] EWHC 434 (Ch)
Hiren Thakkar & Ors v Ioan Mican & Anor
20 May 2024
[2024] EWCA Civ 552
Court of Appeal
A car accident case led to a fight over who pays legal costs. The losing side accused the winners of dishonesty, but the judge didn't believe them. The winners wanted the losers to pay all their legal costs, but the judge said there's no automatic rule for that. The appeals court agreed and said the judge made a fair decision.
Key Facts
- •Road traffic accident (RTA) occurred on 18 May 2017 involving the appellants and the first respondent.
- •Conflicting accounts of the accident: appellants claimed first respondent's van hit their car; first respondent claimed first appellant pulled out into his van.
- •Witness Mr Bigesh Patel's statement supported the appellants' version.
- •Respondents (defendants) initially denied liability and later attempted to amend their defence to allege fundamental dishonesty.
- •Trial judge refused permission to amend, finding the allegations insufficient.
- •Trial judge found in favour of the appellants (claimants), primarily based on Mr Patel's testimony.
- •Dispute arose over costs, specifically the period between the application to amend the defence (6 May 2021) and the trial.
- •Appellants sought indemnity costs for this period, while respondents argued for standard costs.
- •Trial judge awarded standard costs, and this decision was appealed.
- •The Court of Appeal considered whether a claimant has a default entitlement to indemnity costs when allegations of fundamental dishonesty fail.
Legal Principles
Wide discretion in awarding indemnity costs, considering all circumstances including the paying party's conduct.
CPR Rule 44, SCT Finance Ltd v Bolton [2003] 3 All E.R. 434, Three Rivers DC v The Governor of the Bank of England [2006] EWHC 816 (Comm), Digicel (St. Lucia) Limited v Cable and Wireless PLC [2010] EWHC 888 (Ch), Excalibur Ventures v Texas Keystone & Others (No 2) [2016] EWCA Civ 1144
High hurdle to obtain indemnity costs; must demonstrate conduct or circumstance 'out of the norm'.
Excelsior Commercial & Industrial Holdings Limited v Salisbury [2022] EWCA Civ 879
For indemnity costs based on conduct, show it was 'unreasonable to a high degree'; not necessarily 'moral lack of probity'.
Kiam v MGN Limited [2002] EWCA Civ 66; Reid Minty v Taylor [2002] 2 All E.R. 150
Frequent occurrence of conduct doesn't preclude it being 'out of the norm'.
Esure Services Ltd v Quarcoo [2009] EWCA Civ 595
No presumption or default entitlement to indemnity costs for claimants when dishonesty allegations fail.
Clutterbuck v HSBC PLC & Ors [2015] EWHC 3233 (Ch), Natixis S.A. v Marex Financial Limited [2019] EWHC 3163 (Comm), Bishopsgate Contracting Solutions Limited v O’Sullivan [2021] EWHC 2628 (QB), Libyan Investment Authority v Roger Milner King & Ors [2023] EWHC 434 (Ch)
Adequacy of reasons for costs orders; judges should provide reasons for decisions affecting substantive rights, though brevity is acceptable.
English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605
Appeal against a judge's decision without error of law: test is whether the conclusion is one that no reasonable tribunal could have reached.
Volpi and Another v Volpi [2022] EWCA Civ 464
Outcomes
Appeal dismissed.
The Court of Appeal found no default entitlement to indemnity costs for claimants when allegations of fundamental dishonesty fail. The trial judge applied the correct test, considered all circumstances, and her decision was not perverse.