REID MINTY -v- GORDON TAYLOR

This was the Defendant's appeal against a refusal of his application for the claimant to pay costs of the action on an indemnity basis. The claimant was a firm of solicitors, who had sued the Defendant, the Chief Executive of the Professional Footballers' Association, for words spoken and broadcast by him on 6 November 1996 on BBC Radio 5 Live. On 19 December 2000 the jury found in favour of the Defendant on the defence of justification, having found that the words complained of, in their context, were substantially true. The Defendant applied unsuccessfully for indemnity costs for the period from 1 September 1999, the date of his solicitor's letter by which he had offered terms that the claim should be discontinued and the Defendant's costs be paid, failing which the Defendant would seek costs incurred from seven days thereafter on the indemnity basis. Instead the costs of the action were awarded on the standard basis. On appeal, it was held that the overriding objective of the CPR was to deal with cases justly. CPR 36.21 applied to costs and other consequences where a claimant did better than he proposed in his CPR Part 36 offer. There was no equivalent for a successful defendant's CPR Part 36 offer. In considering when costs were payable CPR Part 44 provided that there was a need to review the conduct of the parties, whether a party succeeded in part of its claim and whether a payment into court was made. The thrust of the CPR regime was to require the parties to behave reasonably towards each other and any award of costs needed to be fair and reasonable. Further it was held that indemnity costs were not intended to be penal (see Petrotrade Inc v Texaco Ltd (2000)). Having decided that the judge had been guided by the many pre-CPR cases presented to him, the Court found he had acted incorrectly. The award of costs on an indemnity basis was often, but certainly not always, reserved to cases where the court wished to indicate its disapproval of the conduct of the paying party. Indemnity costs could be awarded against a party whose conduct had been unreasonable, even though the conduct could not properly be regarded as lacking moral probity or deserving moral condemnation. In considering the appropriateness of an order for costs on an indemnity basis the judge was implicitly guided by the many pre-CPR cases presented to him and accordingly he had misdirected himself about the circumstances in which such an order could be made.

PETROGRADE -v- TEXACO LTD

This was the Defendant's appeal against an order that summary judgment be entered for the claimant in the sum of US$14,660.75. Claimant's cross-appeal from that part of the same order that the defendant pay costs assessed at US$4,748 and interest on the judgment debt at the rate of 6 per cent from 28 September 1998 to the date of judgment. The defendant appealed on the grounds that the judge had erred in finding that the terms of the contract were as set out in the telex of 16 September 1998 and that the defendant was not entitled to challenge the quality of the cargo. The claimant cross-appealed from the judge's refusal to award enhanced interest and costs on an indemnity basis despite the fact that the claimant had made a CPR Part 36 offer which had been lower then the amount of the judgment. It was held that although a claimant who had made a CPR Part 36 offer was not entitled to indemnity costs and interest at an enhanced rate under the provisions of CPR 36.21 in circumstances where there had not been a trial (such as where summary judgment had been entered) the fact that he had done better than the proposal made in his offer, did not mean that a court could not, under its general jurisdiction, award costs on an indemnity basis and interest at an enhanced rate. The rule was not to be regarded however as producing penal consequences (though it was noted that in any event an order for indemnity costs did not entitle a claimant to receive more costs than he had incurred). The reason why indemnity costs and interest at an enhanced rate were not to be regarded as penal was because orders for costs never truly compensated a claimant for having had to have come to court. The very process of coming to court inevitably had an impact on a claimant whether he was a private individual or a multi-national corporation meaning that he would be better off if proceedings were not brought. That was one of the reasons why it was part of the culture of the Rules to encourage parties to avoid proceedings. The ability to award indemnity costs and higher rate interest merely sought to achieve a fairer result for a claimant, though the position was not necessarily automatic and there might be circumstances where no order for costs was a just result This typifies the fact that the award is at the Court’s discretion.