Reduction for lying

AXA Insurance plc and another v Sulaman [2009] EWCA Civ 1331, 11 December 2009

The defendant appealed against a decision to reduce her entitlement to costs by two thirds following her successful defence of a claim brought by the claimant insurance company, AXA. The defendant and five others had been suspected of perpetrating a fraud against AXA. Following discovery of the fraud, AXA refused to pay certain insurance claims, and actions were brought against it to recover the sums supposedly due under the claims. AXA joined the defendant and the others suspected of involvement as Part 20 defendants. AXA succeeded in its claims against the other Part 20 defendants but failed to prove the defendant’s involvement. The defendant applied for her costs, assessed on the standard basis up to the expiry of a Part 36 offer she had made and which AXA had failed to beat, and on the indemnity basis thereafter. The judge awarded her costs assessed on that basis, but reduced her entitlement by two thirds because he found that she had lied to him in two respects in her evidence at trial. S argued that (1) her lies had not been greatly consequential to the case, and it was therefore too harsh to deprive her of two thirds of her costs; (2) the judge had ignored her Part 36 offer; (3) the judge had not satisfactorily enunciated any reason for his order other than mechanistically following the example set in Grupo Torras v Al-Sabah unreported, 5 July 1999, QBD (Comm).