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Giambrone v JMC Holidays, Nelson J

2 July 2002
The issues

Costs – generic letters – indemnity principle.

The facts

This was an exceptional and difficult case involving a group action relating to 652 people who had been food-poisoned at a hotel in Majorca. When it came to Detailed Assessment, certain matters of a preliminary nature were dealt with by the Costs Judge in advance of the Detailed Assessment and with a subject matter of Appeal. Firstly, there was a question as to the allowable sum for generic letters prepared by Paralegals. The letters were repetitive and involved only the pressing of a button on a computer. The Claimant sought a flat sum of £10.00 per letter. The Defendants offered £1.00 per letter. The Costs Judge had indicated that £1.00 was the appropriate rate.

A second issue related to the indemnity principle. The Costs Judge, on the basis of correspondence which he had come across during his reading, had ordered the Claimant to make a witness statement in relation to the indemnity principle. He had further ordered that that statement and the exhibits be disclosed not only to him but to the paying party.

The decision

1. Generic letters – £1.00 per letter was plainly insufficient. £3.30 per letter would be allowed.

2. The Costs Judge was wrong to order disclosure to the paying party. He should have complied with paragraph 40.14 of the Costs Practice Direction and directed Claimant to produce a witness statement and relevant documents to him alone and thereafter he should have put Claimants to their election as to whether to disclose the documents to rely upon their contents or to decline disclosure and rely on witness statements alone.

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