Indemnity Costs – When Does A Party Become Liable?

Introduction. The judgment following a consequentials hearing in the case of Mr. Pisante and ors v Mr. Logothetis and ors was handed down by Mr. Justice Baker on 13 October 2022 and provides some helpful guidance on when a party will become liable for indemnity costs.

By way of reminder, costs assessed on the indemnity basis are not subject to a principle of proportionality and, the court will resolve any doubt which it may have as to whether costs were reasonably incurred or were reasonable in amount in favour of the receiving party.

The trial of the main proceedings took place across two weeks in July 2021, and judgment was handed down in January 2022. The first defendant, Mr. Logothetis, was found to have fraudulently misrepresented the basis on which his company, Lomar, would be contributing to a joint venture and the first claimant, Mr. Pisante (acting via his company, Swindon Holdings), was induced by that misrepresentation to indirectly invest in the joint