Assessment of Costs: Whether indemnity costs should be awarded in an application to strike out evidence (Curtiss and others v Zurich Insurance plc – 2022)

Where an application made to strike out witness evidence is found to be disproportionate, should costs assessed on an indemnity basis be awarded?

The background

In Curtiss and others v Zurich Insurance plc [2022], 150 owners of flats in Swansea brought claims against Zurich for deceit, claiming that fraudulent misrepresentations made by Zurich in cover notes had induced them to purchase their properties.

49 witness statements were served. Zurich alleged numerous breaches of Civil Procedure Rules Practice Direction 57AC in a 109-page schedule, and sought an order to strike out either the whole or part of 33 witness statements due to purported non-compliance with the PD. The court struck out parts of witness statements and written submissions were to be made by the parties in respect of costs. This further decision related to the payment of costs.

The decision

The High Court ordered Zurich to pay 75% of the property owners’ costs on an indemnity basis, finding that the application to strike out the witness statements was disproportionate and oppressive. Costs were awarded on an indemnity basis as the application fell outside the “ordinary and reasonable conduct of litigation”, making only a small 25% discount on account of the “modest gains” made by the application.

In its judgment, the court found the applicant’s lengthy schedule of alleged breaches to be “a waste of time and effort” and could not find any justification for the application. With costs of the application exceeding £275,000, the court stated that there could be “no rational world in which this sort of expenditure can have been justified”.

Advice and action for landlords

This judgment is a helpful point of reference as to preparation of applications to strike out evidence. Zurich had gone to great lengths to present a substantial application, incurring considerable costs in doing so.

With a finding that such efforts were disproportionate and inappropriate to the application, the court’s decision is guidance as to how parties should approach applications for non-compliance with the Practice Direction. Applications should be proportionate to the complexity of the primary dispute.