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Wigg & Co - the indemnity basis

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Reid Minty (A Firm) -v- Gordon Taylor (2001 EWCA Civil 1723)

At the end of a contested defamation trial the jury found in favour of the Defendant on the issue of justification and the Judge awarded the Defendant his costs but declined to make an order on the indemnity basis saying that the costs on the indemnity basis should only be awarded if there had been some sort of moral lack of probity or conduct deserving of moral condemnation on the part of the Paying Parties.

The Court of Appeal held that the Judge was wrong and that the court now had a wide discretion under CPR Rule 44.3 which was not constrained by authorities decided under the rules which preceded the introduction of the CPR. There was discretion to decide whether some or all of the costs awarded should be on the standard or indemnity basis. Litigation can regularly be conducted in a way which is unreasonable and which justifies an award of costs on the indemnity basis, where the conduct could not properly be regarded as lacking moral probity or deserving moral condemnation.

See also Amoco -v- British American Offshore Ltd [QBD Butterworths Costs Service Bulletin January 2001].

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