(1) ANTONIO CALIENDO (2) BARNABY HOLDINGS LLC v (1) MISHCON DE REYA (A Firm) (2) MISHCON DE REYA LLP (2016)

The fact that a professional negligence claim had been brought on a factual premise which was fundamentally false and which the claimants knew to be false was sufficient to take the case out of the norm, justifying an order that the defendants’ costs should be awarded on the indemnity basis.

The court was required to determine consequential matters following its judgment in a professional negligence claim ([2016] EWHC 150 (Ch)).

 

The defendants sought various orders, in particular (1) that the claim should be dismissed and that they should have their costs of the proceedings; (2) that their costs should be awarded on the indemnity basis; (3) that they should be granted an interim payment on account of their costs.

 

In relation to the basis of assessment, the defendants relied on the judge’s findings that the claimants had brought the claim on a factual basis which was false and which they knew to be false. They also relied on the claimants’ alleged misconduct in the manner in which the proceedings had been pursued. In particular, they relied on the fact that the first claimant’s principal witness statement had originally run to 474 paragraphs before being redacted, and yet it had been found to have omitted or barely touched upon significant aspects of the true version of events.

 

HELD: (1) It was inevitable that the claim should be dismissed and that the defendants should be awarded their costs of the proceedings. There was no reason to depart from the principle that costs should follow the event.

 

(2) It was well established that to justify an assessment of costs on the indemnity basis, there had to be some conduct or circumstance which took the case out of the norm: the court was looking for something which indicated that the case had not been brought or pursued in the normal way. The fact that the claim had been brought on a factual premise which was fundamentally false and which the claimants knew to be false was sufficient alone to take the case out of the norm. The manner in which the witness statement had been prepared and its context supported that conclusion. The request for an assessment on the indemnity basis was accordingly fully justified.

 

(3) The court was required by CPR r.44.2(8) to order the payment of a reasonable sum on account of costs unless there was good reason not to do so. It was plain that the defendants should receive a reasonable sum on account. The defendants’ last approved costs budget had totalled just under £1.2 million, though their actual costs had exceeded £1.9 million. In those circumstances, the £1 million interim payment sought by the defendants was reasonable. That was particularly so given that assessment was to be on the indemnity basis, though the court indicated that it would have come to the same conclusion even if it had ordered assessment on the standard basis.

 

Judgment accordingly

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