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Should the test applied when determining whether to order the payment of costs on the standard or indemnity basis differ if the paying party is a litigant in person? HHJ Matthews’ judgment in Sir Henry Royce Memorial Foundation v Hardy  EWHC 817 (Ch) considered that issue, and whether indemnity costs should be awarded against the unsuccessful Defendant.
The action related to a claim for an order under s.117 of the Companies Act 2006, when it had been determined that the Defendant’s request for copy documents or inspection under s.116 was invalid. The parties had been unable to agree a consequential order and had lodged written submissions upon the issues. The Defendant’s arguments relating to the degree of success upon all arguments by the Claimant, were dismissed. The Court ordered that the Claimant was the successful party and was therefore entitled to the payment of costs by the Defendant.
The Court was required to consider the appropriate basis of the payment of costs and heard arguments from the Claimant. The Claimant argued that their costs should be paid on the indemnity basis, citing the Defendant’s conduct and provided examples of the same. Reference was made to the Defendant’s conduct which included, the Defendant taking every possible point; causing costs to escalate; and correspondence which included offensive remarks. The court also referenced various examples of the Defendant’s conduct, one of which was the excessive correspondence with the Claimant, which, we observe, is a regular feature for litigants in person cases. Further examples included the Defendant’s allegations that the court was being deceived, fraud and perverting the course of justice. The judgment was duly disapproving, stating:
“In my judgment, this behaviour is unnecessary, and indeed counter-productive, because more time and resources are then spent on dealing with these problems of tone and language than in addressing the real issues in the case.”
We consider this a discerning comment that would apply in relation to any litigation where a party is corresponding in inappropriate terms.
The principles in Barton v Wright Hassall  UKSC 12,  1 WLR 1119 at  were followed. These principles are that a different approach should not be taken regarding compliance with the CPR by represented parties and litigants in person, and it would not be usual to justify applying to litigants in person a lower standard of compliance with rules or orders of the court. HHJ Matthews commented:
“There are not two sets of rules for litigation in this jurisdiction, one for represented litigants and one for unrepresented.”
The Claimant was duly awarded costs on the indemnity basis. The Court noted that:
“The Defendant is intelligent and articulate, and an experienced litigant in person, with access to legal resources. The problem is that, being neither professionally trained nor qualified as a lawyer, he has no sense of responsibility to the system, no duty of the kind that would be owed by a lawyer to the court (and sanctioned if breached), and no professional reputation to lose. In my judgment, this is a clear case for costs to be assessed on the indemnity basis, and I will so order.”
The Claimant’s application for a summary assessment was refused, given the size of the costs claimed: £111,088 for the solicitors, £22,700 for counsel, plus other disbursements. A detailed assessment was instead ordered, with a payment on account of 60% of the costs claimed.
In addition, the case interestingly comments upon the issue of the receiving party being funded by way of donations to assist with or cover its legal costs, with there being no issue of champerty or maintenance, and the funding position not breaching the indemnity principle.
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Published 13 September 2021
Author – Caroline Cousins
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