Mortgage Agency Services Number Four Limited v. Alomo Solicitors

Mortgage Agency Services Number Four Limited v. Alomo Solicitors [2011] EWHC B22

In this case during the trial of claims relating to alleged mortgage frauds the parties reached a settlement based on a part 36 offer made some weeks previously by the Claimant.The court ordered that the costs should be paid by the Defendant on an indemnity basis.

The reason the  judge described the defences as lamentable, prolix,obscure and irrelevant.

He described eleven large conveyancing files and other material disclosed as a consequence of issues raised in the defence and the witness statements became very lengthy.

Much of the disclosure was irrelevant. The judge described the defences and the issues which had to be dealt with by the claimant had been thrown up in a scatter gun approach to litigation

The defence raised every possible issue rather than narrowing the issues in order to save time and costs

The claimants had a cost budget of £120,0000 which increased to £170,000 and may be as much as £200,000 despite judicial cost management because the claimant alleged they were having to deal with

“a blizzard of issues raised by the defendant”

The judge thought this was a routine mortgage fraud case and the costs should have been much less than those incurred.


“In those circumstances I am satisfied that this is a case where the conduct of the Defence is one which requires an order to indicate the Court’s displeasure: indemnity costs. Furthermore, I am satisfied that it is only fair on the Claimants that that should be the case, putting the burden of proof on a detailed assessment on the Defendants to show, if they dare to do so, that the Claimants costs – apparently disproportionately high and in excess of approved budget as they are – are ‘unreasonable’, rather than vice versa i.e. having to prove that their own costs are ‘reasonable’.”

If the defence does not properly deal with the issues or throws in issues to try and obscure matters then there is a real risk that the court will order that costs be on an indemnity basis as in this case.

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