Entries by Toby Moreton

Defendant’s Mediation Refusals And Late Expert Change Of Position Insufficient To Displace The Usual Costs Order

In MJS Projects (March) Limited v RPS Consulting Services Limited [2026] EWHC 884 (TCC), Her Honour Judge Kelly sitting as a High Court Judge determined costs following dismissal of a professional negligence claim arising from container park design near Felixstowe Port. The Claimant accepted costs would ordinarily follow the event under CPR 44.2(2) but argued the Defendant’s repeated refusals to mediate, assessed against the Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002 factors, justified departing from the default position and making no order as to costs. The Defendant resisted, contending its refusals were reasonable given the Claimant’s persistent failure to engage with workmanship allegations raised since 2019 and its refusal to disclose expert evidence even on a without prejudice basis. The court accepted the Defendant had declined multiple mediation proposals but held this could not be assessed in isolation. Applying Halsey, the judge found the Defendant had reasonably required some understanding of the Claimant’s expert case before committing to mediation, that other forms of ADR and commercial settlement discussions had been pursued throughout, and that mediation would not have had reasonable prospects of success given the parties’ entrenched positions and the Claimant’s own combative pre-trial stance. The Defendant’s application for indemnity costs in respect of the expert phase was refused, the judge holding that the high threshold in Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hammer Aspden and Johnson [2002] EWCA Civ 879 was not met. Costs were ordered on the standard basis, with an interim payment of £309,673.80 plus interest at four percent, representing the approved budget less ten percent.

Indemnity Costs Awarded After Contempt Proceedings Used As Commercial Pressure

In Bargain Busting Ltd v Shenzhen SKE Technology Company Ltd [2026] EWHC 1146 (Ch), HHJ Paul Matthews, sitting as a Judge of the High Court, ordered the unsuccessful contempt applicant to pay the respondents’ costs on the indemnity basis following dismissal of contempt proceedings against a Chinese technology company and the solicitors who had acted for it. The central issue was whether costs totalling approximately £322,629 should be assessed on the indemnity rather than standard basis. Applying the principle that indemnity costs are appropriate where conduct takes the case out of the norm, citing Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hammer Aspden and Johnson [2002] EWCA Civ 879 and Hosking v Apax Partners Ltd [2019] 1 WLR 3347, the court found three factors decisive in combination: the contempt allegations concerned conduct solicitors routinely undertake, making it difficult to understand how criminal liability could have been contemplated; a letter dated 23 January 2026 constituted, to the civil standard, a threat to report the respondents to the SRA unless they agreed to the applicant’s terms; and a without prejudice save as to costs telephone call on 11 March 2026 revealed the contempt proceedings had been deployed as commercial pressure. The court ordered costs on the indemnity basis subject to detailed assessment, with a payment on account of £215,000 under CPR rule 44.8, representing approximately two thirds of the total after applying a margin to reflect assessment uncertainty.

And The Winner Is? Defendant Who Beat Both Strike Out and Summary Judgment Recovers 75% of Her Costs After 80% Costs Order Against Her Reversed on Appeal

In Cook v Skeggs [2026] EWHC 1132 (KB), Mr Justice Sweeting allowed an appeal against a costs order requiring the defendant to pay 80% of the claimant’s costs of a combined strike out and summary judgment application that had been dismissed. The judge below had concluded that the application was substantially justified when issued and that late amendments by the defendant had “completely changed the picture,” warranting a substantial costs award in the claimant’s favour despite his overall failure. On appeal, Mr Justice Sweeting held that this reasoning was flawed and irreconcilable with the judge’s own finding that the summary judgment limb would have failed irrespective of the amendments, the judge having concluded that the claimant had not come close to demonstrating that the defendant’s factual case was merely fanciful. Applying the principles in Johnsey Estates v Secretary of State [2001] EWCA Civ 535 and CPR r 44.2(2), the court held that the defendant was the successful party and was prima facie entitled to her costs. The appropriate reflection of her late amendment, which related only to the strike out limb, was a proportionate reduction rather than a reversal of the costs order. Mr Justice Sweeting substituted an order that the claimant pay the defendant’s costs of the application on the standard basis, subject to a 25% reduction, and awarded the defendant her costs of the appeal. The decision reinforces that the starting point for costs on interlocutory applications is that costs follow the event, and that departures from this principle require clear justification grounded in the successful party’s conduct.

High Court Strikes Out Non-Compliant Points Of Dispute Despite Late Annotated Schedule

In Ward v Rai [2025] EWHC 1681 (KB), Mrs Justice Hill, sitting with Costs Judge Leonard as assessor, allowed an appeal against Deputy Costs Judge Friston’s refusal to strike out Point 23 of the Respondent’s Points of Dispute and his decision to permit reliance on an annotated document schedule served approximately two working days before a detailed assessment hearing arising from a road traffic accident claim settled for £546,984. Point 23 challenged 134.1 hours of document time across 418 individual bill entries but identified no specific items and stated no particularised grounds of dispute, contrary to PD 47, paragraph 8.2(b) and Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178. The schedule, when eventually served, advanced materially different figures and item-specific objections across eight categories. Hill J held that Point 23 was plainly non-compliant, being less particularised than the disputed points in Ainsworth, O’Sullivan v Holmes and Hills LLP [2023] EWHC 508 (KB), and St Francis Group 1 Ltd v Kelly [2025] EWHC 125 (SCCO). Applying Edinburgh v Fieldfisher LLP [2020] EWHC 862 (QB) and Celtic Bioenergy Ltd v Knowles Ltd [2022] EWHC 1223 (QB), she found the Judge had failed to exercise his paragraph 13.10(2) discretion consistently with the overriding objective, had given insufficient weight to the mandatory requirements of paragraph 8.2(b), and had not balanced the relevant factors fairly, resulting in an unnecessary third hearing day and additional costs contrary to the streamlined nature of detailed assessment proceedings.

Institutional Arbitration Rules May Displace Statutory Costs Specificity Requirements

In Genel Energy Miran Bina Bawi Limited v The Kurdistan Regional Government of Iraq [2026] EWHC 1003 (Comm), Mrs Justice Dias dismissed a section 68(2)(b) challenge to a costs award exceeding US$26 million arising from LCIA arbitration proceedings. The claimant argued the tribunal exceeded its powers under section 63(3) of the Arbitration Act 1996 by failing to specify items of recoverable costs and amounts referable to each, having awarded costs based only on aggregate figures per fee earner category and monthly totals without allocation to individual fee earners or specific tasks. Dias J held, first, that Article 28.3 of the LCIA Rules 2020 constituted a complete free-standing regime for assessing legal costs, displacing the section 63 default rules entirely, consistent with party autonomy principles in sections 1 and 4(3) of the Act. Second, and decisively, applying Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43, even if the specificity provisions applied, non-compliance constituted at most an erroneous exercise of an existing power, not an excess of power, and section 68(2)(b) was therefore unavailable.

Success Fee Reduced From 100% (£2,500) To 11% (£330) And ATE Premium Disallowed In Child Personal Injury Claim

In Spicer v Greene King Brewing and Retailing Limited [2026] EWCC 18, District Judge Lumb addressed the proper approach to assessing CFA success fees deductible from a child claimant’s damages following an infant approval hearing. The claimant, aged four at the time of his accident, suffered a minor forehead laceration after tripping on uneven paving slabs at the defendant’s public house. Liability was admitted immediately and the claim settled for £10,000. Express Solicitors sought to deduct a success fee of £2,500 (25% of damages) based on claimed profit costs of £13,316 across 73.1 hours and a risk assessment fixing the success fee at the maximum 100%. District Judge Lumb directed production of the full file, finding that the litigation friend had not given fully informed consent to the charging model and applying Herbert v HH Law Ltd [2019] EWCA 527. Conducting a summary assessment on the indemnity basis, the judge held that reasonable base costs were £3,000, reflecting 15 hours at Grade D and 2 hours at Grade B at guideline rates, and that a success fee of 11% was appropriate given prospects of success approaching 100%, yielding a success fee of £330 plus VAT. 

Conditional Value Reservation Does Not Prevent Rendering Of Interim Statute Bills Where No Uplift Agreed

In Mehta v Howard Kennedy LLP [2026] EWHC 968 (KB), Mr Justice Kimblin, sitting with Costs Judge Nagalingam as assessor, dismissed an appeal against findings that 24 invoices totalling £3,124,674.04 delivered by Howard Kennedy LLP to their client Vishal Mehta constituted interim statute bills subject to the time limits in section 70 of the Solicitors Act 1974. The central question was whether a reservation in paragraph 5(2) of Howard Kennedy’s Terms of Business, permitting a value or importance element to be taken into account in a concluding bill if not reflected in earlier bills, qualified the finality of the invoices so as to bring the case within Ivanishvili v Signature Litigation LLP [2024] EWCA Civ 901. Applying the contractual interpretation principles in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, Kimblin J held that the reservation was conditional in nature and had no application to a retainer containing no success-related, conditional, or contingent fee arrangement. The Terms of Business stated in express terms that each bill was a final bill for the period covered and carried statute bill status. The General Notes, though not contractually binding, were relevant to interpretation and confirmed the value element applied only where specifically discussed or referenced in the engagement letter. The decision clarifies that Ivanishvili does not apply where there is no outcome-dependent fee structure, providing important guidance on when interim invoices constitute statute bills triggering section 70 time limits.

SCCO Lacks Jurisdiction to Order Security for Costs of Detailed Assessment Proceedings

In Magomedov v Rabinovich [2026] EWHC 962 (SCCO), Costs Judge Brown held that the Senior Courts Costs Office lacks jurisdiction to order security for costs in detailed assessment proceedings under CPR 25. The defendants in the underlying commercial litigation, having obtained costs orders totalling approximately £4.2 million following dismissal of claims valued at over US$13 billion, sought security of £336,000 for the costs of the detailed assessment itself, representing 70% of estimated future assessment costs of £480,000. They relied on alleged material changes of circumstances including an indemnity costs order and increased risk of non-payment. Costs Judge Brown rejected the application, holding that CPR 47 constitutes a self-contained code for detailed assessment proceedings with no express importation of CPR 25, and that the only available interim measure is an interim costs certificate under CPR 47.16. Drawing on CT Bowring v Corsi, JSC Karat v Tugushev, and GFN SA v Bancredit Cayman, he reasoned that there was no adequate enforcement sanction for such an order and that permitting such applications would generate disproportionate satellite litigation inconsistent with the Overriding Objective. He further held that even if jurisdiction existed, he would have refused the application in his discretion, noting the absence of material change of circumstances, the availability of security before the trial court, and the fact that the application itself had generated approximately £150,000 in costs, demonstrating the very concerns about disproportionality that militate against recognising such jurisdiction.

Default Costs Certificate Upheld Despite Variation For Irrecoverable VAT

In MT Construction Limited v Frieze & Saunders [2026] EWHC 813 (SCCO), Deputy Costs Judge Erwin-Jones refused an application to set aside a Default Costs Certificate where the paying party claimed a binding oral agreement had extended the deadline for serving Points of Dispute. The defendants contended that during a telephone call on 17 October 2025 their solicitor had agreed with the receiving party’s costs draftsman to extend the deadline to 1 December 2025 in exchange for accepting email service, later recorded in a unilateral email sent on 8 November 2025. The judge found that this email could not constitute a written agreement of both parties as required by CPR 2.11, particularly where the receiving party denied the conversation had occurred in those terms and their subsequent email of 11 November expressly asserted the original deadline. The mandatory ground under CPR 47.12(1) therefore failed. Applying the Denton v White framework to the discretionary ground, the judge found the breach serious and significant, the reasons insufficient, and noted that even if the alleged extension had been valid, Points of Dispute were still not served by that later date. The decision reinforces that alleged oral agreements to extend time limits must be evidenced by written agreement from both parties under CPR 2.11, and that unilateral emails purporting to record earlier conversations cannot satisfy this requirement where promptly disputed.

Indemnity Costs Awarded for Libel Claim Used to Pressure Anonymous Artist

In Full Colour Black Limited v Banksy [2026] EWHC 795 (KB), Nicklin J ordered indemnity costs from 10 October 2023 following FCB’s discontinuance of a libel claim arising from an Instagram post in which Banksy criticised FCB’s unauthorised commercial exploitation of his artworks through a GUESS collaboration, but refused a non-party costs order against FCB’s sole director. Applying CPR 44.3 and the principles in Hosking v Apax Partners LLP [2019] 1 WLR 3347 and Thakkar v Mican [2024] 1 WLR 4196, Nicklin J held that the proceedings had been deployed to exert pressure by exploiting Banksy’s well-known concern to preserve his anonymity, rather than to obtain vindication by adjudication. The reservation in the Particulars of Claim of a right to seek Banksy’s identification, the correspondence pressing for his full name, the tactical pleading decisions in the Reply, and the settlement overtures linking resolution to a broader commercial arrangement collectively took the case outside the norm. The non-party costs application against the director was refused, the court holding that control of litigation by a sole director, without evidence of serious impropriety or bad faith of a qualitatively different order, did not displace the principle of limited liability under Goknur Gida v Aytacli [2021] 4 WLR 101. The decision illustrates the distinction between conduct warranting indemnity costs against a corporate party and the higher threshold required to impose personal liability on a director, and confirms that litigation pursued as an instrument of leverage rather than adjudication may justify indemnity costs even where it falls short of justifying piercing the corporate veil.