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Masood Ahmed, associate professor of law, on why indemnity costs are determined by the conduct, not just the outcome, of litigation
- Indemnity costs remain exceptional and depend on whether the litigation conduct, viewed as a whole, was highly unreasonable and ‘outside the norm’.
- Parties should reassess and narrow claims as evidence develops, ensuring serious allegations are properly supported, pleaded and withdrawn when no longer pursued.
Mr Justice Nicklin’s costs judgment in Baroness Lawrence of Clarendon OBE and others v Associated Newspapers Ltd [2026] EWHC 2207 (KB) provides a useful and important restatement of the principles governing indemnity costs in civil litigation. Having lost their claims against the defendant, Nicklin J was required to determine two issues on the claimants’ costs liability: (i) whether the claimants should pay costs on the standard or indemnity basis; and (ii) the sum the claimants must pay on account of costs.
The rules
Indemnity costs remain exceptional. They may be ordered where a party’s conduct, or the circumstances of the case, takes the litigation ‘out of the norm’
