Lord Justice Bedlam concluded that:
I also refer to the judgment of Auldous LJ in which he stated:
On the basis of the decision in Willis v Redbridge Health Authority I consider that it would be in breach of the indemnity principle to award costs on any other basis than the standard basis.
[10] Mr Girvan referred to the decision of the Court of Appeal in England and Wales in Brawley v Marczynski and another (Nos 1 and 2) [2003] 1 WLR 813 . That was a decision after the Legal Aid Regulations had been amended in England and Wales by the Civil Legal Aid (General) (Amendment) Regulations 1994 which inserted 107(b) in the Civil Legal Aid (General) Regulations 1989. Regulation 170(b)(3) provides that the assisted person's legal representatives shall not be prevented from recovering from the paying party the sums in respect of costs to which this regulation refers by any rule of law which limits the costs recoverable by a party to proceedings to the amount which he is liable to pay his legal representatives. The indemnity principle expressly does not now apply in England and Wales in relation to legally aided plaintiffs. This obviously impacted on the outcome in Brawley but the Court of Appeal recognised that in non-assisted litigation the indemnity principle prohibited a litigant recovering more by way of costs than the costs for which he was liable. There has been no similar provision in Northern Ireland dis-applying the indemnity principle in relation to legally aided cases. The indemnity principle means that any different method of taxation than that provided by paragraph 4 of Schedule 2 of the 1981 Order is unlawful.
[11] Mr Girvan also relied on the provisions of Article 13(3) of the 1981 Order and Article 15A. Article 13 is the Article that provides that a solicitor who has acted for a person receiving legal aid shall be paid for so acting out of the legal aid fund, and any fees paid to counsel for so acting shall also be paid out of the legal aid fund and that the sums payable to a solicitor or counsel shall not exceed those allowed under Schedule 2. That Schedule provides in paragraph 4 that costs shall be taxed on the standard basis. However Article 13(3) provides that nothing in this Article shall prejudice Article 15A(b) which provides that the rights conferred by or under this Part on a person receiving legal aid are not to affect the rights or liabilities of other parties to the proceedings or the principles on which the discretion of any court or tribunal is normally exercised. So it is contended that Article 15A(b) maintains the discretion to award costs on an indemnity basis as that is a potential liability of another party. I accept that such discretion is maintained but the discretion has to be exercised lawfully in accordance with the indemnity principle. In a case in which the plaintiff is legally aided any exercise of discretion that awarded any different taxation than that provided by paragraph 4 of Schedule 2 would be in breach of the indemnity principle. I consider that as the plaintiff is in receipt of legal aid I cannot lawfully award costs on an indemnity basis.
In the alternative consideration of discretion
[12] The conclusion that the court cannot lawfully award costs on an indemnity basis determines the issue as to the basis of taxation. However if I had jurisdiction to award costs on an indemnity basis then in the exercise of discretion I would have declined to do so. In my judgment I referred to the failure of the first defendant to give any adequate discovery. However the plaintiff's advisors at an appropriate stage were at liberty to and ought to have brought applications to compel discovery of relevant documents. I am content that a careful structured analysis of the issues in advance of trial could have resulted in clearly defined categories of documents being ordered in advance of the hearing. The plaintiff also relied on an offer in settlement made in the pre-trial period. I do not consider it necessary to determine the legal impact of making such an offer on the question of costs as I consider that the offer had in any event a number of deficiencies. For instance it specified a fixed and significant amount in relation to costs which were to be paid by the first defendant without any opportunity for the first defendant to analyse, let alone challenge or subject that amount to independent scrutiny. There was no breakdown of the amount which the plaintiff sought by way of costs; there was no reference as to whether it was on the standard or indemnity basis. Finally the plaintiff contends that the case being a test case then in the exercise of discretion costs should be awarded on an indemnity basis. Again quite apart from the legal question as to the impact, if any, which a case being a test case has on the issue of costs, I do not consider that there has been any identifiable additional expenditure that would not have otherwise been incurred which would justify moving to the indemnity basis of taxation because of what is asserted to be the test nature of this particular case. So accordingly if I had jurisdiction then in the exercise of discretion I would not have awarded costs on indemnity basis.
Conclusion
[13] I make an order for costs in favour of the plaintiff against both defendants such costs to be agreed or taxed on the standard basis in default of agreement. The order for costs as against the second defendant is not to be enforced without further order of this court. I order taxation of the plaintiff's costs and of the second defendant's costs in accordance with Schedule 2 to the Legal Aid, Advice and Assistance (Northern Ireland) Order 1981.
[14] The basis upon which the costs of the plaintiff should be taxed was a discreet issue which was argued before me on 27 February 2015 and 4 March 2015. In respect of those hearings I make an order for costs in favour of the first defendant against the plaintiff such Order not to be enforced against the plaintiff without further order of the Court. I also order that the plaintiff's costs of the hearings on 27 February 2015 and 4 March 2015 be taxed in accordance with Schedule 2 to the Legal Aid, Advice and Assistance (Northern Ireland) Order 1981.