CA-2024-000509 - [2025] EWCA Civ 1071

This judgment sets out the court’s decision on the basis of assessment of costs.

The court’s power to award costs is found in CPR 44.2. The court has a wide discretion in respect of costs. CPR 44.2(4) provides that in deciding what order to make the court has regard to all the circumstances, including:

“(a)

the conduct of all the parties;

(b)

whether a party has succeeded on part of his case, even if he has not been wholly successful; and

(c)

any admissible offer to settle made by a party which is drawn to the court's attention and which is not an offer to which costs consequences under Part 36 apply.”

CPR 44.2(5) further provides:

“The conduct of the parties includes -

(a)

conduct before, as well as during, the proceedings, and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol;

(b)

whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(c)

the manner in which a party has pursued or defended its case or a particular allegation or issue;

(d)

whether a claimant who has succeeded in its claim, in whole or in part, exaggerated its claim…”

The court’s power to award costs to be assessed on the indemnity basis is to be found in CPR 44.3(1)(b). In Excelsior Commercial & Industrial Holdings Ltd [2002] EWCA Civ 879 the court held that the making of an indemnity costs order would be appropriate where the conduct of the parties, or other particular circumstances of the case, (or both), was such as to take the case “out of the norm” in a way which justifies the making of an order for indemnity costs (see Waller LJ at [39]).

In Esure Services Ltd v Quarcoo [2009] EWCA Civ 595 Waller LJ provided further clarification. Having reiterated at [17] that the right starting point is the rules, he went on to say at [25]:

“In my view the word “norm” was not intended to reflect whether what occurred was something that happened often so that in one sense it might be seen as “normal” but was intended to reflect something outside the ordinary and reasonable conduct of proceedings. To bring a dishonest claim and to support a claim by dishonesty cannot be said to be the ordinary and reasonable conduct of proceedings.”

We have in mind Waller LJ’s observations and all the factors in CPR 44.2 in determining the Appellant’s application for indemnity costs.

The Appellant submits that the court’s conclusion that the Respondent’s failure to disclose a significant proportion of her assets amounted to fraudulent non-disclosure justifies the imposition of indemnity costs both in the Court of Appeal and below. The Appellant also highlights the fact that, at the commencement of the proceedings, he had proposed in correspondence the very outcome which will now take place, namely that in the light of the Respondent’s material non-disclosure, there should be an assessment of the Appellant’s needs by reference to section 25 of the Matrimonial Causes Act 1973.

The Respondent “fiercely resists” such an approach, setting out features which substantially go to her proposed appeal to the Supreme Court. Those are matters which, it is said, serve to undermine the approach of the Court of Appeal and its finding that the Respondent’s non-disclosure was fraudulent.