Hiren Thakkar & Ors v Ioan Mican & Anor
[2024] EWCA Civ 552
Libyan Investment Authority & Ors. v Mr Roger Milner King & Ors.
24 February 2023
[2023] EWHC 434 (Ch)
High Court
The claimants lost a case accusing others of fraud. The judge thought the case was weak and based on guesses, not proof. Because of this, and because the claimants didn't take a fair settlement offer, they have to pay the defendants all their legal costs, not just a portion.
Key Facts
- •Claimants brought a case against defendants alleging fraud and dishonesty.
- •Claimants lost the case.
- •Disagreement arose regarding the basis of costs assessment (standard or indemnity).
- •Defendants argued for indemnity costs due to the serious allegations, speculative nature of the claim, and claimants' conduct.
- •Claimants argued that a failed dishonesty claim doesn't automatically justify indemnity costs.
- •Various offers to settle were made by the defendants and rejected by the claimants.
Legal Principles
CPR 44.2: Court considers all circumstances, including party conduct, when deciding on costs orders.
CPR 44.2
Principles governing indemnity costs are summarized in White Book paragraph 44.3.10.
White Book (2022 edition), paragraph 44.3.10
Factors justifying indemnity costs (from Three Rivers DC v Bank of England): aggressive pursuit of serious allegations lacking foundation, thin or far-fetched claims, claims irreconcilable with contemporaneous documents.
Three Rivers DC v Bank of England [2006] EWHC 816 (Comm)
Indemnity costs may be awarded for dishonest claims, speculative claims, claims pursued for reasons unrelated to merit, and overly aggressive conduct.
Bishopsgate Contracting Solutions Limited v O'Sullivan [2021] EWHC 2628 (QB); Lejonvarn v Burgess [2020] EWCA Civ 114
Conduct justifying indemnity costs must show a significant level of unreasonableness or inappropriate conduct.
National Westminster Bank v Rabobank [2007] EWHC 1742 (Comm)
Failure of a fraud or dishonesty case is a factor, but not an automatic justification for indemnity costs.
Various case law cited in judgment
Rejection of reasonable settlement offers can be a factor in considering indemnity costs.
Various case law cited in judgment, including discussion of the claimants' rejection of the defendant's offers.
Outcomes
Indemnity costs awarded to the defendants.
The claim was considered speculative in several respects, particularly after Judge Barker's orders; the claimants pursued speculative theories without sufficient evidence; they strayed beyond their pleaded case; the evidence supporting reliance was thin; and the claimants unreasonably rejected reasonable settlement offers. While a failed dishonesty claim doesn't automatically justify indemnity costs, the totality of circumstances warranted the indemnity cost order.
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