A Case Study on the Henderson Rule and Costs Implications.
The judgment in Orji & Orji v Nagra & Nagra [2023] EWCA Civ 1289 explores the application of the Henderson v Henderson rule in the context of striking out claims, with a particular focus on the costs implications caused by procedural issues. This case illustrates how courts balance claims of abuse of process and cost management with ensuring that justice is served fairly, especially in light of delays.
Background
The appellants, Mr and Mrs Orji, initially brought a trespass claim against the respondents following incidents in March 2018. Following their successful appeal of several criminal convictions related to these events, the appellants then issued a claim for malicious prosecution. The respondents sought to have the claim struck out under the Henderson v Henderson rule, arguing that it should have been raised earlier in the litigation.
The case became complicated by concerns over costs, with the respondents arguing that the appellants’ conduct had caused unnecessary delays, increasing litigation expenses. However, the appellants contended that they could not have raised the malicious prosecution claim earlier because the criminal convictions had not yet been overturned.
Procedural Delays and Costs Disputes
At the heart of the dispute was the effect of procedural delays on costs. The respondents highlighted how the delays caused by multiple reamendments inflated the cost of litigation. However, the Court of Appeal found that while both parties contributed to delays, striking out the claim based purely on costs and procedural delays would be disproportionate.
Both parties’ conduct played a role in the prolonged litigation, and the respondents’ own applications, including a failed attempt to strike out the trespass claim, added to the delays. The court stressed that while managing costs is crucial, delays alone, without clear evidence of abuse, cannot justify striking out a claim, especially one that remains arguable.
The Court’s Findings
The Court of Appeal ruled in favour of the appellants, reinstating the malicious prosecution claim. Lord Justice Coulson concluded that the Henderson v Henderson rule did not apply as no substantive determination had been made in the trespass claim that would preclude the appellants from bringing the malicious prosecution claim.
Furthermore, the court found that while costs and procedural delays were problematic, they did not amount to an abuse of process significant enough to justify striking out the claim. Instead, the court emphasised the need for proportionate case management to ensure fairness for both parties.
Costs and Abuse of Process
In costs disputes, the Henderson v Henderson principle is often cited to argue that delays or the introduction of new claims unnecessarily increase litigation costs. However, this case reaffirms that costs alone are insufficient grounds for striking out a claim unless they are linked to a clear abuse of process. Courts must carefully consider the broader context of the litigation and ensure that both sides’ conduct is weighed equally.
The decision in Orji v Nagra demonstrates that while cost management is a legitimate concern, the court’s overriding objective is to ensure that justice is delivered fairly and proportionately. Striking out a claim, particularly one that remains within the limitation period and is arguable on its merits, is a severe measure that requires clear evidence of misuse of the court’s procedures.
Summary: Application to Costs Cases
The Orji v Nagra case offers important lessons for costs cases, especially regarding procedural delays. While managing litigation expenses is crucial, this case confirms that courts will not automatically strike out claims based on delays alone. The ruling highlights the need for proportionality when dealing with costs disputes and clarifies that the Henderson v Henderson rule is not applicable where no substantive prior determination has been made.
This decision encourages solicitors and legal practitioners to focus on active case management and clear communication with the court to minimise costs, rather than relying on applications to strike out claims based purely on delays. In the end, both justice and fairness must take precedence over expedience and cost control.
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Rebecca Humble, Costs Lawyer
10.10.2024