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Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hamer Aspden and Johnson, Court of Appeal, 12 June 2002

19 June 2002
The issues

Costs – conduct – indemnity basis – Part 36.

The facts

The Claimant succeeded at Trial against the Second Defendant, but failed against the First Defendant. Both Defendants together had made a Part 36 payment of £100,000.00 one day before the Trial. The Claimant was awarded only nominal damages in fact against the Second Defendant. The Trial Judge ordered that the Claimant pay both Defendants costs up until one day after the payment in (8th June – the day on which the Trial started) on a standard basis and on an indemnity basis thereafter. The Claimant appealed, arguing that the costs Order should have been made in its favour against the Second Defendant, against whom it had succeeded.

The decision

1. The Judge had heard arguments as to costs and had had the benefit of knowing all the factors in the case. The Trial Judge was in a better position than the Court of Appeal to determine where costs should lie.

2. There were an infinite variety of situations that might occur, which might justify different types of costs orders. It was not possible therefore to give guidance to Judges as to when it was appropriate to order indemnity costs. Such matters were best left to the Judge’s discretion following the rules provided in the Civil Procedure Rules. The Court noted that a Judge had extensive discretion in Part 44. Generally, it would only be appropriate however for indemnity costs to be award where the facts of the case or conduct of the parties took the situation away from the norm.

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