COURT OF APPEAL UPHOLDS AWARD OF INDEMNITY COSTS: RAYMOND -v- YOUNG

In Raymond -v- Young [2015] EWCA Civ 456 the Court of Appeal upheld an award of indemnity costs, awarded as a result of the conduct of the defendants.

THE CASE

The appeal concerned the award of £155,000 for diminution in the claimant’s property caused by acts of harassment and nuisance. The trial judge found that the claimants had embarked upon a programme of continuous acts of harassment, trespass and nuisance on the claimant’s property in a campaign of “truculence and belligerence”.  The defendant appealed against an award of damages and the Court of Appeal allowed the appeal to a small extent, reducing the award by £20,000 because of double recovery.

The trial judge also awarded costs against the defendants on the indemnity basis.  The defendants also appealed that aspect of the judgment.

THE COURT OF APPEAL JUDGMENT ON INDEMNITY COSTS

Lord Justice Patten stated:

  1. That leaves the appeal against costs. The Recorder ordered the defendants to pay the costs of the action on an indemnity basis and to make an interim payment on account of costs of £150,000. Mr Elleray submits that the award of indemnity costs was wrong in principle because indemnity costs should be awarded to reflect the court’s disapproval of the paying party’s conduct of the litigation: not the conduct which is the subject of the litigation. Otherwise virtually every losing defendant would be required to pay indemnity costs. It was not therefore enough, he says, that the Recorder had reached adverse conclusions about the way in which the Youngs behaved towards the Raymonds.
  2. It is right that indemnity costs are generally awarded in cases where the paying party has conducted the litigation in a way which the court regards as unjustified. The successful party is compensated for the unlawful conduct of a losing defendant by the award of damages which the court makes. But, in this case, the Recorder in his separate judgment on costs makes it clear that the award of indemnity costs is intended to reflect the defendants’ pursuit of unrealistic claims and assertions during the litigation. Their case remained throughout that the allegations of nuisance were unfounded or invented and that they were part of a campaign by the Raymonds to drive them out.
  3. The Recorder found that there was no truth in these allegations and that the Youngs raised them as part of a defence which they always knew was false and had no prospect of success. In these circumstances, the Recorder was entitled in my view to consider an award of indemnity costs and there are no grounds for interfering with his decision. The same must go for the order for the interim payment. The appeal against the costs orders must therefore be dismissed.”

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