Indemnity Costs in UK Law

Leading Cases
  • Kiam v MGN Ltd (No 2)
    • Court of Appeal (Civil Division)
    • 06 February 2002

    I for my part, understand the Court there to have been deciding no more than that conduct, albeit falling short of misconduct deserving of moral condemnation, can be so unreasonable as to justify an order for indemnity costs. To my mind, however, such conduct would need to be unreasonable to a high degree; unreasonable in this context certainly does not mean merely wrong or misguided in hindsight.

    It follows from all this that in my judgment it will be a rare case indeed where the refusal of a settlement offer will attract under Rule 44 not merely an adverse order for costs, but an order on an indemnity rather than standard basis. It is very important that Reid Minty should not be understood and applied for all the world as if under the CPR it is now generally appropriate to condemn in indemnity costs those who decline reasonable settlement offers.

  • Reid Minty v Taylor
    • Court of Appeal (Civil Division)
    • 29 October 2001

    If costs are awarded on an indemnity basis, in many cases there will be some implicit expression of disapproval of the way in which the litigation has been conducted, But I do not think that this will necessarily be so in every case.

  • McPhilemy v Times Newspapers Ltd (No. 2)
    • Court of Appeal (Civil Division)
    • 20 June 2001

    It is plain, as Lord Woolf, Master of the Rolls, pointed out in the Petrotrade case, that paragraphs (2) and (3) of CPR 36.21 – in conjunction with paragraph (4) – are intended to provide an incentive to a claimant to make a Part 36 offer. The incentive is that a claimant who has made a Part 36 offer (which is not accepted) and who succeeds at trial in beating his own offer stands to receive more than he would have received if he had not made the offer.

    He will get interest on his costs from the date of the order (whether he has actually paid them or not); but he will get nothing to compensate him for the cost of money (or the loss of the use of money) which he has had to bear before trial in relation to payments which he has made on account of costs. An order under paragraph (3)(b) of CPR 36.21 enables the court to achieve a fairer result in that respect.

  • F & C Alternative Investments (Holdings) Ltd v Barthelemy and another (No 3)
    • Chancery Division
    • 28 October 2011

    In this regard I particularly emphasise the importance for my reasoning of factor (d) (award of costs on an indemnity basis). In my view, where a party has acted in the course of litigation in a way that attracts an order of costs against them to be assessed on an indemnity basis, that is a good indicator that that party is to be taken to have assumed to a particularly extensive degree the risk of continuing with the litigation in question.

  • Ms Basia Lejonvarn v Mr Peter Burgess & Mrs Lynn Burgess
    • Court of Appeal (Civil Division)
    • 06 February 2020

    But a defendant can seek an order for indemnity costs if he or she can show that, in all the circumstances of the case, the claimant's refusal to accept that offer was unreasonable such as to be “out of the norm”. Moreover, if the claimant's refusal to accept the offer comes against the background of a speculative, weak, opportunistic or thin claim, then an order for indemnity costs may very well be made.

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Legislation
  • The Civil Procedure (Amendment) Rules 2013
    • UK Non-devolved
    • January 01, 2013
    ... ... (a) in the heading to the Part, after “CASE” insert “AND COSTS”; ... (b) in the Table of Contents of the Part— ... (i) before the ... on the standard basis; or ... on the indemnity basis, ... but the court will not in either case allow costs which have ... ...
  • Land Registration Act 2002
    • UK Non-devolved
    • January 01, 2002
    ... ... (a) is liable to the other party for all the proper costs of and incidental to the retransfer, regrant or recreation of the legal ... (4) Indemnity for membersNo member of the land registry is to be liable in damages for ... ...
  • Solicitors Act 1974
    • UK Non-devolved
    • January 01, 1974
    ... ... the High Court may make such order as it thinks fit as to payment of costs ... (4B) The decision of the High Court on an appeal under subsection ... in solicitor’s practice, Compensation Fund and professional indemnity ... 35: Intervention in solicitor’s practice ... The powers conferred ... ...
  • Land Registration Act 1925
    • UK Non-devolved
    • January 01, 1925
    ... ... 2007/1355), reg. 1(1), Sch. 4 para. 18(2) ... 17: Costs of application for registration ... 4 para. 18(2) ... Part VII: Rectification of Register and Indemnity ... 82: Rectification of the register ... ...
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Books & Journal Articles
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Law Firm Commentaries
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Forms
  • Statement of costs (Financial remedy)
    • HM Courts & Tribunals Service court and tribunal forms
    Forms to apply for a divorce, dissolve a civil partnership or legally separate, including the D8 application and financial order forms.
    ... ... Hourly rate claimed: £ ... Summary of costs statement ... Prescribed rates for ... publicly funded services ... Indemnity rate ... Total Section A (Box 7) ... Total Section B (Box 14) ... Total Section C (Box 21) ... Total Section D (Box 25) ... Total Section E (Box 26) ... ...
  • Estimate of costs for a financial remedy hearing
    • HM Courts & Tribunals Service court and tribunal forms
    Forms to apply for a divorce, dissolve a civil partnership or legally separate, including the D8 application and financial order forms.
    ... ... Disbursements (including VAT, if appropriate) ... incurred by current solicitors ... All counsel's fees (including VAT) ... Indemnity rate ... Add any private client costs previously incurred ... (in publicly funded cases only) ... Total of Section A ... Section B: to be completed ... ...
  • Notice claiming contribution or indemnity against another defendant (rule 20.6)
    • HM Courts & Tribunals Service court and tribunal forms
    King's Bench forms for use in cases such as personal injury, negligence and breach of contract.
    ... ... Take notice that the additional claimant (name) claims against you [to be indemnified against the claimant’s claim and costs of the claim] [or contribution to the extent of (proportion of claimant’s claim) of the claimant’s claim] [or the following remedy, namely (set ... ...
  • Order for distribution of a Lloyd's Estate
    • HM Courts & Tribunals Service court and tribunal forms
    Chancery forms, including claim forms and applications for orders.
    ... ... (2) the costs of the Claimants of this application [either in the agreed sum of ... ... summary assessment) [or subject to a detailed assessment on the indemnity basis if not agreed by or on behalf of ... ...
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