News and Insights

In this recent construction case, the Royal Court clarified the position on costs and indemnity costs, further to MacFirbhisigh v CI Trustees [2006]1 JLR Note 1 and Hodges v Trenouth-Wood [2021]JRC179.

Here the Defendant had successfully defended the claim and sought its costs on the indemnity basis. The Royal Court awarded costs on the standard basis, to be taxed if not agreed. The Royal Court noted that while indemnity costs will not normally be awarded unless there has been a degree of unreasonableness by the relevant party, normally “significant unreasonableness” will be required for such an order:

“Often disputes before the Court ultimately end up in a decision by the Court in which it might be said that the behaviour of the unsuccessful party contained an element of unreasonableness. Indeed, that could apply to the successful party as well. If both parties are behaving entirely reasonably then a number of matters before the Court would not come before it at all. It is not therefore simply unreasonableness …but a material level of unreasonableness [that] would take the matter outside of the norm.”

Viberts’ Dispute Resolution, Property, Corporate and Employment teams have significant experience of Construction and Development law matters. Click here for more details.