Young v Smith (No 2)

In the case of Young v Smith (No 2), the Court was asked to consider the question of indemnity costs and whether they were appropriate in circumstances where adverse credit findings had been made against the defendant and the proceedings had been conducted on a false basis. The plaintiff, Young, sought indemnity costs from the defendant, Smith, on the basis that Smith had misled the court by presenting false credit reports, leading to a significant delay in the proceedings.

The legal issues before the court were whether indemnity costs were appropriate in this situation and whether there were any exceptional circumstances that would prevent the award of such costs. The court had to determine whether Smith's conduct warranted a departure from the usual rule that costs follow the event, and if so, whether any exceptional circumstances existed that would prevent the award of indemnity costs.

The court found that Smith's conduct in presenting false credit reports to the court was a serious breach of the court's processes and had led to a significant delay in the proceedings. The court held that indemnity costs were appropriate in this case as they were necessary to compensate the plaintiff for the additional costs incurred due to Smith's misleading conduct. However, the court also considered whether there were any exceptional circumstances that would prevent the award of such costs. In this case, the court found that there were no exceptional circumstances that would prevent the award of indemnity costs, and therefore, the plaintiff was entitled to recover the additional costs incurred as a result of Smith's misleading conduct. The court ordered that Smith pay the plaintiff's costs of the proceedings, including indemnity costs, on an indemnity basis.