BB and others v Al Khayyat and other [2025] EWHC 379 (KB)
This is a judgment considering the applicable presumptions in relation to costs in the event of discontinuance. It confirms that the presumption that the discontinuing Claimant will pay the other side's costs is a strong one and will apply unless the Court is persuaded, on the balance of probabilities, that the Defendant's conduct has been unreasonable and has brought about the collapse of the proceedings.
What are the practical implications of this case?
This is an interesting judgment which addresses the interplay between the applicable presumptions in relation to costs when a Claimant discontinues a claim with the Court's desire to preserve the integrity of its own proceedings. In this case, the discontinuing Claimants made a range of serious allegations against one of the Defendants and an associated State actor. If well-founded, those allegations would have involved a serious attempt by (or on behalf of) a Defendant to interfere in the administration of justice. However, the raising of such allegations, even where cogent or prima facie arguable, would not suffice to disapply the applicable presumptions. Only if the Court was persuaded on the balance of probabilities that the allegations were well-founded would it disapply the usual presumption in CPR r. 38.6 that the discontinuing Claimant should pay the Defendant's costs.
What was the background?
Proceedings were issued by eight Syrian individuals whose names have been anonymised. The First and Second Defendants are Syrian businessmen and the Third Defendant is a Qatari Bank. They allege that personal injury and damage was caused by the actions of a terrorist group, the Al-Nusra front. They argued that under Syrian law, the Defendants were liable to them as a result of these actions. Four of the Claimants applied for permission to discontinue the proceedings. In so doing, they argued that "the Proceedings have been derailed and irreparably compromised as a result of a criminal conspiracy by agents acting on behalf of the State of Qatar and/or the Defendants". They also made allegations in relation to 'associates of the State of Qatar and/or the Defendants'. In the alternative, they asserted that 'Even if the State of Qatar is solely responsible for the Conspiracy...the [Third Defendant] should not be permitted to disavow those acts of interference. The [Third Defendant] should not be allowed to shield behind a convenient legal fiction, given the very real connections between the State of Qatar and the [Third Defendant].' The discontinuing Claimants argued that the Court 'should draw the adverse inference that the [Third Defendant] was aware of and/or acquiesced in and/or was associated with the Conspiracy by virtue of its connections with the State of Qatar and/or benefitted directly from that unlawful conduct.' On the basis of these allegations, the discontinuing Defendants that the Court should depart from the usual presumption that they were liable for the Third Defendant's costs of the proceedings under r.38.6, CPR.
What did the court decide?
The Claimants argued that it was not necessary for the Court to consider fully the allegations made against the Third Defendant and the State of Qatar or to be satisfied according to the civil standard that the allegations were true. The Court merely needed to be satisfied that there were cogent reasons for departing from the usual presumptions in relation to costs. Mr Justice Soole disagreed. When party discontinues, the presumption applies and that presumption is not disapplied simply because circumstances change. For a change of circumstances to justify displacing the presumption, the Court will need to be satisfied that there has been some unreasonable conduct on the part of the Defendant. By parity of reasoning, the Court held in the present case that the discontinuing Claimants would need to satisfy the Court on the balance of probabilities that the improper conduct alleged had resulted in the collapse of the proceedings. The burden was not discharged by the discontinuing Claimants in this case. The normal rule would apply and the discontinuing Claimants were liable to pay the Third Defendant's costs.
Case details
- Court: High Court, King's Bench Division
- Judge: Mr Justice Soole
- Date of judgment: 19 February 2025
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