indemnity costs
📖 O que é indemnity costs? Significado e conceito
When a court orders one party to pay the legal costs of another, these costs are usually calculated on a 'party and party' basis. However, in certain situations, a court might order 'indemnity costs', which means the unsuccessful party has to pay a greater proportion of the successful party's actual legal fees. This type of order is not intended as a punishment, but rather to ensure the successful party is more adequately compensated for the disadvantage caused by the other party's conduct.
Indemnity costs are typically considered when there has been a 'relevant delinquency' or a significant failure to comply with court rules and practice notes. For example, if a party brings an application that is deemed unreasonable or engages in unconscionable conduct, the court might consider an order for indemnity costs. This can also serve as a case management tool to encourage compliance with legal procedures.
While a contract might include provisions for indemnity costs, the court will still assess the circumstances. Even if a contract mentions indemnity costs, a party's unreasonable conduct, such as failing to provide necessary documentation, can lead to the court denying such an order, especially if both parties experienced a similar measure of success and failure in the overall case.
📋 Requisitos
- A 'relevant delinquency' on the part of the unsuccessful party.
- A significant failure to comply with relevant court rules and practice notes.
- Unreasonable conduct by a party in the proceedings.
- Circumstances where a court deems it appropriate to more fully compensate the successful party.
📝 Procedimento
- A party applies to the court for an order for costs, specifying the basis (e.g., indemnity basis).
- The court considers the conduct of the parties throughout the litigation, including any failures to comply with rules or unreasonable actions.
- The court determines if there is a 'relevant delinquency' or significant failure that warrants an indemnity costs order.
- If an indemnity costs order is made, the court may also make a 'gross sum costs order' if there is sufficient evidence to determine a fair amount.
💡 Exemplos
- A court might order indemnity costs against a party who brought an application to rely on late-served evidence, which was rejected due to a significant failure to comply with court rules.
- If a claimant is found to have engaged in unreasonable conduct during the proceedings, they might be ordered to pay the respondent's costs on an indemnity basis.
- Even if a mortgage contract includes a provision for indemnity costs, a mortgagee who fails to tender a valid certificate might have their request for indemnity costs denied due to their own unreasonable conduct.
- An order for indemnity costs could be made against a party whose actions caused undue delay, even if the other party is a corporation, as a case management tool rather than a punishment.
📚 Base legal
- Civil Procedure Act 2005
- Uniform Civil Procedure Rules, rr 42.1, 42.25
❓ Perguntas frequentes
What is the difference between 'party and party costs' and 'indemnity costs'?
Party and party costs cover a portion of the successful party's legal expenses, while indemnity costs cover a much larger proportion, aiming to more fully compensate the successful party for their actual legal fees.
When would a court order indemnity costs?
A court might order indemnity costs when there has been a 'relevant delinquency' by the unsuccessful party, a significant failure to follow court rules, or unreasonable conduct during the legal process.
Are indemnity costs a form of punishment?
No, while they are often associated with a party's 'delinquency', indemnity costs are not intended as a punishment but rather as a way to more adequately compensate the successful party for the disadvantage caused by the other party's actions.
Can a contract guarantee indemnity costs?
While a contract might include a provision for indemnity costs, the court still has the discretion to decide whether to award them, taking into account the conduct of all parties involved in the case.
What does 'gross sum costs order' mean in relation to indemnity costs?
A gross sum costs order is when the court sets a specific total amount for costs, rather than requiring a detailed assessment, and this can be made on an indemnity basis if there is enough evidence to determine a fair sum.
If I am a self-represented litigant, how do I ask for indemnity costs?
You would need to make an application to the court for costs and specify that you are seeking them on an indemnity basis, providing reasons and evidence to support why the other party's conduct warrants such an order. It is recommended to seek advice from a qualified solicitor to understand the specific requirements and procedures.