In a recent further judgment in Cohen & Crooks as Joint Administrators for the Estate of James Donald Hanson & Anor v Arbitrage Research and Trading SA & Ors, the Royal Court of Jersey confirmed and developed the test for when indemnity costs will be awarded against an unsuccessful litigant. They are as follows.

  • The starting point for the Court remains for it to ask itself whether a costs order should be made in favour of the successful party. The Court has a very broad discretion in addressing this preliminary question.
  • Once a winning party is identified, the Court goes on to consider on what basis costs should be awarded. The choice is between a standard basis order and an indemnity basis order.
  • Indemnity cost orders are infrequent, and the Court needs to identify one or more aspects of the proceedings that take the case out of the ordinary before such an order will be made.
  • Typically, it will be the conduct of the unsuccessful party in the course of the litigation that takes the case out of the ordinary, so as to justify an order for indemnity costs. In Cohen & Crooks, examples of such behaviour were:
    • the deliberate withholding of relevant material from discovery; and
    • successful attempts to prevent relevant discovery.
  • Conduct in the litigation, however, is not the only conduct that can justify an indemnity costs order. The substance and nature of the underlying proceedings can be justification for an indemnity costs order. For example, in Cohen & Crooks, the Royal Court made extensive findings of dishonesty against the fourth defendant. That dishonesty was sufficient to take the case substantially out of the norm in a way that justified an indemnity costs order.

For further information on this topic please contact James Angus or Matthew Davies by telephone (+44 1534 514 000) or email ([email protected] or [email protected]). The Ogier website can be accessed at