Indemnity principle applies to successful legally aided defendant but claimant insurer can act under a CCFA in committal proceedings

Costs Judge Leonard sitting in the Senior Courts Costs Office in London Victoria Insurance Co Ltd v (1) Kamar Abbas Khan and Others [2022] EWHC B8  had to decide several preliminary issues in a detailed assessment of the costs of the Claimant and the Second & Fourth Defendants following committal proceedings, including whether the Fourth Defendant was limited to recover the applicable rates set out in the Criminal Legal Aid (Remuneration) Regulations 2013, and whether the Claimant’s CCFA was unlawful under section 58A of the Court and Legal Services Act 1990.

Indemnity principle: was the fourth defendant entitled to recover costs exceeding the rates/fees set by Sch.4 para.7(2) of the criminal Legal aid (Remuneration) Regulations 2013?  A legally aided client had no liability for costs, meaning that there was nothing for the opponent to indemnify, long-standing provisions existed in civil cases to ensure that a legally aided party could recover costs ordered against an opponent without breaching the indemnity principle. The current version was in the Civil Legal Aid (Costs) Regulations 2013 reg.21, which disapplied the indemnity principle

The fourth defendant was not able to rely on any primary or secondary legislation disapplying the indemnity principle for a party in receipt of criminal legal aid. He had to rely on the provisions of the Standard Crime Contract Specification 2010 (the Criminal Specification), which could not have that effect.

Was the claimant’s CCFA enforceable? 

At the contempt hearing, the court had stated that although the committal proceedings were civil contempt proceedings, they were criminal proceedings for the purposes of LASPO. Whether the proceedings were criminal proceedings for the purposes of s.58A of the 1990 Act was an entirely different question, not determined at the earlier hearing. The nature of the contempt was not to be confused with the nature of the proceedings, which, in the instant case were civil in nature.  Accordingly, since the contempt proceedings were not “criminal proceedings” for the purposes of s.58A, the CCFA was enforceable and the indemnity principle did not operate to prevent the claimant from recovering its costs.

Gaurang Naik acted for the Second Defendant who was found not guilty of contempt.