The Supreme Court Costs Office

No.5 of 2002

Victor Kiam v MGN Ltd
6 February 2002
Court of Appeal

The defendants appealed against the award by a jury of £105,000 to the claimant for libel. Some time before the appeal was due to be heard the claimant offered to accept £75,000, and to return the additional £30,000, plus appropriate interest, a proposal which the appellants simply ignored.

The Court of Appeal, by a majority, dismissed the appeal on the merits, and affirmed the award of £105,000 damages. The question then arose as to whether, in those circumstances, the claimant was entitled to his costs of the appeal on the indemnity basis, rather than on the standard basis. The Court of Appeal considered Petrotrade Inc v Texaco Ltd, McPhilemy v Times Newspapers Ltd and Reid Minty (A Firm) v Taylor, and considered that the award of indemnity costs did, notwithstanding some of the dicta in those cases, carry some stigma, and held that it would be a rare case indeed where a refusal of a settlement offer would attract not merely an adverse order for costs, but such an order on the indemnity rather than the standard basis. Accordingly, the Court of Appeal unanimously refused the claimant's application for costs to be assessed on the indemnity basis, though it seems that they may well have been strongly influenced by the fact that the minority Judge would only have awarded £60,000 damages.