“Indemnity costs” is not a term of art in the Supreme Court Rules. What the Rules provide is a range of bases and a set of powers directed at costs that should not have been incurred.
Order 12 Rule 5(2)
Where the Court or a Judge orders that costs be paid, it may further order that as to the whole or any part of the costs specified, instead of taxed costs, that person shall be entitled to —
(a) a proportion specified in the order of the taxed costs; or
(b) the taxed costs from or up to a stage of the proceedings specified in the order; or
(c) a gross sum specified in the order; or
(d) a sum in respect of costs to be ascertained in such manner as the Court may direct; or
(e) the costs to be taxed on a party/party or solicitor/client basis; or
(f) the costs, whether taxed or specified, to be payable by a lawyer, in accordance with Rule 11.
Rule 5(3): the Court or a judge may make an order under sub-rule (2) at any time, whether or not an order that costs be paid to a person has previously been made or entered.
Paragraph (e)
The distinction between party/party and solicitor/client taxation is what does the work of indemnity costs in this jurisdiction.
Rule 19 shows the difference. On any taxation the officer allows all such costs, charges and expenses as appear to him to have been necessary or proper for the attainment of justice or for maintaining or defending the rights of a party — but costs incurred or increased through over-caution, negligence or misconduct, by payment of special fees to counsel or special charges or expenses to witnesses, or by other unusual expenses are not allowed except as against the party who incurred them, and on a lawyer and own client bill may be allowed where approved in writing by the client.
So the higher basis reaches costs the party/party basis excludes.
How to seek a different basis
Order 14 makes this express for matters on the papers: if a party seeks an order for costs other than on a party-party basis to be taxed if not agreed, the reasons for such different costs order being made, must be specified in that party’s submissions.
That is the right practice in any matter. A request made from the bar table after judgment, with no reasons and no notice, is unlikely to succeed.
Where written submissions have been directed under Order 11 Rule 12, include the costs application there, with the grounds — and note that Order 14 also requires a party to annex to a submission in chief the orders sought by that party.
Order 12 Rule 30
On a hearing, the Court or a Judge may, upon application and whether or not objection is taken —
(a) direct that any costs which have been improperly, unreasonably or negligently incurred, be disallowed;
(b) direct the taxing officer to examine the costs incurred, and to disallow such costs as he shall find to have been improperly, unreasonably or negligently incurred; or
(c) direct that a party whose costs are so disallowed, shall pay to the other parties the costs incurred by those parties in relation to the proceeding in respect of which his costs have been disallowed.
Rule 30(2): where the question has not been raised before the Court, it is the duty of the taxing officer to look into that question, with the same consequences as if specially directed.
It does not merely disallow the offending party’s costs; it directs that party to pay to the other parties the costs incurred by those parties in relation to the same matter.
Order 12 Rule 11
Where costs are incurred improperly or without reasonable cause, or are wasted by undue delay or by any other misconduct or default, and a lawyer is responsible, the Court may — after giving the lawyer a reasonable opportunity to be heard — disallow the costs as between the lawyer and the lawyer’s client, direct the lawyer to repay to the client costs the client has been ordered to pay, or direct the lawyer to indemnify any party other than the client against costs payable by the party indemnified.
Before making such an order the Court may refer the matter to the Registrar for inquiry and report, and may order that notice of any proceeding or order against a lawyer be given to the lawyer’s client or instructing lawyer.
Two provisions that cut the other way
Rule 30(3): where a party is awarded judgment for less than the maximum civil jurisdiction of the District Court on a proceeding for a money sum or damages, any costs ordered to be paid, including disbursements, will be reduced by one-third of the amount otherwise allowable, unless otherwise ordered.
Rule 31: where a party appears in which he is not interested or upon which, according to the practices of the Court, he ought not to appear, he shall not be allowed any costs of appearance unless the Court, Judge or Registrar directs.
Sources
- Supreme Court Rules 2012 — O 11 r 12; O 12 rr 5, 11, 19, 26–31; O 14
- Supreme Court Act (Chapter 37) — s 31
Before relying on anything here, read the current text of the Supreme Court Rules 2012 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.