Richmond Pharmacology Ltd v Chester Overseas Ltd & Ors

JUDGMENT

Stephen Jourdan QC sitting as a deputy High Court judge

Introduction

On 1 August 2014 I handed down my written judgment in this claim, and heard submissions on costs. For reasons I gave in an extempore judgment delivered on 1 August 2014, I ordered the Claimant to pay the Defendants’ costs of the claim, and it was agreed that a payment on account of those costs should be ordered. I then heard an application by the Defendants that those costs should be assessed on the indemnity basis. This application was very well argued on both sides, and I reserved judgment. This is my judgment on that issue. I will use the same abbreviations as in my main judgment.

The applicable principles

There are two differences between assessment of costs on the standard and on the indemnity basis in a case such as this, commenced before 1 April 2013:

On the standard basis, the court will only allow costs which are proportionate to the matters in issue. On the indemnity basis, there is no such restriction, and so costs may be allowed even though they were disproportionate to the matters in issue.

On the standard basis, the court will resolve any doubt which it may have as to whether costs were reasonably incurred or reasonable and proportionate in amount in favour of the paying party. On the indemnity basis, any doubts which the court may have as to whether costs were reasonably incurred or were reasonable in amount will be resolved in favour of the receiving party.

The Civil Procedure Rules themselves do not contain any guidance as to the basis on which the Court should direct assessment. However, there are many cases in which the Courts have considered that issue. I was referred to the principles set out in the judgment of Tomlinson J in Three Rivers District Council v Bank of England [2006] 5 Costs LR 714 at 731, and in the judgment of Sir Anthony Colman in National Westminster Bank Plc v Rabobank Nederland [2008] 3 CLR 396 at [28]. I have also considered the subsequent summaries of the applicable principles by Morgan J in Digicel (St Lucia) Ltd v Cable & Wireless plc [2010] EWHC 888 (Ch) , [2010] 5 Costs L.R. 709, Gloster J in Euroption Strategic Fund Limited v Skandinaviska Enskilda Banken AB [2012] EWHC 749 (Comm) at [8]-[15], and Coulson J in Elvanite Full Circle Ltd v AMEC Earth & Environmental (UK) Ltd [2013] EWHC 1643 (TCC) at [16] as amplified by Akenhead J in Courtwell Properties Ltd v Greencore PF (UK) Ltd [2014] EWHC 184 (TCC) ,