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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Clarke v Maltby [2010] EWHC 1856 (QB) (26 July 2010) URL: http://www.bailii.org/ew/cases/EWHC/QB/2010/1856.html Cite as: [2010] EWHC 1856 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		26/07/2010

The Hon. Mr Justice Owen :

1. The Claimant seeks an order that the Defendant pay her costs of the action on the indemnity basis. The Defendant accepts that the Claimant is entitled to an order for her costs, but submits that it should be on the standard basis.
2. The award of costs is within the discretion of the Court (CPR 44.3(1)). In deciding what order to make, the Court must have regard to all the circumstances including the conduct of the parties, 44.3(4). 44.3(5) provides that the conduct of the parties includes "(c) The manner in which a party has pursued or defended his case or a particular allegation or issue".
3. 44.4(1) sets out the two bases of assessment, namely the standard basis and the indemnity basis. It is to be noted that in either case the Court will not allow costs which have been unreasonably incurred or are unreasonable in amount. An assessment of costs on the indemnity basis differs from that under an order made on the standard basis in two respects. When costs are assessed on the standard basis, the court will only allow costs that are proportionate to the matter in issue (44.4(2)), a restriction that does not apply in relation to an order for costs on an indemnity basis. Secondly under a standard costs order the court must resolve any doubt it might have as to whether costs were reasonably incurred in favour of the paying party, whereas in the case of an order for indemnity costs, any such doubt must be resolved in favour of the receiving party 44.(3).
4. The issue of when it is appropriate to make an order for costs on an indemnity basis was considered by the Court of Appeal in Excelsior Commercial and Industrial Holdings Limited v Salisbury Hammer Aspden and Johnson and Others [2002] EWCA Civ 879. At paragraph 32 Lord Woolf CJ made the following observation:

"32. ... there is an infinite variety of situations which can come before the courts and which justify the making of an indemnity order. It is because of that that I do not respond to Mr Davidson's submission that this court should give assistance to lower courts as to the circumstances where indemnity orders should be made and circumstances when they should not. In my judgment it is dangerous for the court to try and add to the requirements of the CPR which are not spelt out in the relevant parts of the CPR. This court can do no more than draw attention to the width of the discretion of the trial judge and re-emphasise the point that has already been made that, before an indemnity order can be made, there must be some conduct or some circumstance which takes the case out of the norm. That is the critical requirement. "

5. Mr Norris submits that there are features of this case that take it out of the norm.
6. As I said in my judgment (paragraph 34) the Defence counter-schedule called into question the genuineness of the symptoms described by the Claimant. The clear implication was that she was deliberately exaggerating her symptoms. Furthermore that was the basis upon which the prolonged cross-examination of the Claimant, and that of other witnesses was conducted. Whilst I accept that it was appropriate for theDefendant to test the degree to which the Claimant was under a permanent disability as a consequence of the injuries sustained in the accident, the degree to which such disability adversely affected her capacity to function as a solicitor at partner level carrying out banking related work, and in particular to explore why she had reduced her working hours to three days a week, the manner in which the case was conducted went far beyond that. The allegation of deliberate exaggeration, an allegation that the claim was fraudulent, was not pleaded as it ought to have been if it was to be pursued. Yet when pressed as to his case, counsel was obliged to concede that he was asserting that there was deliberate exaggeration.
7. Critically there was simply no support for the allegation of deliberate exaggeration in any of the medical evidence upon which the Defendant relied, including evidence from a consultant psychiatrist and a neuro psychologist. On the contrary, each expert in turn specifically disavowed any suggestion of deliberate exaggeration on her part.
8. There was a retreat in the closing submissions made on behalf of the Defendant, it then being suggested that this was a case in which "the reality of the symptoms is often less than how she is describing them" (see paragraph 35). But that was not the basis upon which cross-examination had been conducted.
9. I also take account of the fact that the allegation of deliberate exaggeration to substantiate a fraudulent claim was being made in relation to a solicitor. As I observed at paragraph 38, that was an allegation that was plainly distressing to her, and an allegation that would have had the most serious consequences if well founded.
10. Furthermore the counter-schedule implied serious professional impropriety on the part of the solicitors representing the Claimant. The inference was that her solicitors had influenced her to reduce her working hours in order to inflate the value of her claim. In their written opening, served on the Defence in advance of the hearing, counsel for the Claimant understandably expressed concern at the inference to be drawn from the terms of the counter-schedule. Mr Norris QC returned to the point in his oral opening, asking in terms whether it was being suggested that there had been such impropriety on the part of his instructing solicitors. At that point Mr Featherby QC "unreservedly" withdrew that implication. But as Mr Norris submitted in the course of the costs application, if that implication had never been intended, then the appropriate time for the mistaken impression to have been corrected was as soon as the author of the counter-schedule read the terms of the Claimant's written opening, which made it clear that that was the way in which the counter-schedule had been understood.
11. In the exercise of my discretion I have taken account of all the circumstances, and have come firmly to the conclusion that the conduct of the Defence as summarised above plainly takes the case out of the norm. There will therefore be an order that the Defence pays the Claimant's costs of the claim on an indemnity basis.