Toby Moreton, Author at TMC Legal Limited

About Toby Moreton

Managing Director

Entries by Toby Moreton

budgeting, Budgeting & Management, Costs Budgeting & CMC, Hourly Rates, New Costs Blog, Proportionality, Summary Assessment

Consequences Of “Over-Egging” A Claim At The CCMC | Court Engages The CPR 44.3(2)(a) Proportionality “Safety Valve” As Good Reason To Depart Downwards From The Approved Budget Under CPR 3.18

In O’Sullivan v Trading 212 UK Limited [2026] EWCC 32, Recorder Benjamin Wood sitting in the County Court at Central London determined costs following dismissal of a claim arising from closure of the claimant’s share trading account. The claim, pleaded at £37,106 but worth only a few thousand pounds on proper analysis, generated combined actual costs of approximately £700,000. The most significant costs issue was whether there was good reason under CPR 3.18 to depart from the approved costs budgets when carrying out the summary assessment. Applying Merrix v Heart of England NHS Foundation Trust [2017] EWHC 346 (QB) and the competing approaches in RNB v LB Newham [2017] EWHC B15 (Costs) and Nash v Ministry of Defence [2018] EWHC B4 (Costs), the recorder held that good reason to depart existed on three independent grounds: the defendant’s solicitors’ hourly rates, which exceeded even London 1 guideline rates, required reduction of between one quarter and one half; there had been a simplification of issues engaging the proportionality safety valve identified in Nash; and the trial judge’s superior knowledge of the case revealed that the costs management order had been made on a fundamentally mistaken basis. The recorder assessed the defendant’s recoverable costs at £113,750 for the claim generally, plus £15,000 for the strike out application, against which the claimant recovered £27,000 for costs caused by the defendant’s late disclosure. After set-off, the claimant was ordered to pay the defendant £96,350 within 35 days.

CFAs & Success Fees, New Costs Blog

Court Upholds Discounted CFAs Where Rounding Added Just £1,678 To A £2 Million Bill

In Seladore Legal Limited v PGMBM Law Limited [2026] EWHC 1305 (Ch), Master Pester granted summary judgment on the enforceability of two discounted conditional fee agreements between law firms, rejecting a challenge under section 58(4)(b) of the Courts and Legal Services Act 1990. The defendant argued that the CFAs failed to state a single percentage increase because clause 6.3 provided that uplifted rates “represent 170% of the standard fee rates (subject to rounding)”, and the accompanying table showed effective uplifts ranging from 70.06% to 70.21% across ten fee earner grades due to rounding of hourly rates. Master Pester held that the CFAs literally complied with the statutory requirement: stating that uplifted rates represent 170% of standard rates was functionally identical to stating a 70% increase, and reading the agreement as a whole made the position sufficiently clear. Alternatively, applying the materiality test from Hollins v Russell [2003] 1 WLR 2487, any departure was immaterial: the total excess attributable to rounding was approximately £1,678 on fees exceeding £2 million, causing no materially adverse effect on client protection or the administration of justice.

Commercial Litigation, New Costs Blog, Part 36

Competing Part 36 Offers In Multi-Issue Litigation | Like-for-Like Comparison Required

In Rued v Dormer [2026] EWHC 1074 (Ch), Chief Master Shuman declined to vary a liability phase costs order following competing Part 36 offers in a partnership dissolution dispute. The claimant’s offer of 5 April 2019, limited to the ‘loan repayment issue’, was held not to have been beaten once the differing treatment of withholding tax under the Income Tax Act 2007 was properly applied to produce a like for like comparison under CPR 36.17(1)(b). Even if that conclusion were wrong, the court held it would be unjust to apply the automatic consequences, since acceptance would not have avoided the bulk of the litigation, including the ‘Plot 9 breach of trust issues’ and the full account. The defendant’s Part 36 offer of 21 December 2018 was held to be invalid or, alternatively, incapable of reliable comparison with the eventual outcome, given its exclusion of central issues and the defendant’s refusal to provide clarification when sought. As to the account phase, applying Ma’har v O’Keefe [2014] EWCA Civ 1684, the court held that the orthodox starting point for account phase costs is no order, and found no conduct justifying departure.

New Costs Blog, Payment on Account

Baxendale-Walker Principle Does Not Extend To Appellate Costs Against Regulatory Bodies

In Dentons UK and Middle East LLP v Solicitors Regulation Authority Ltd [2026] EWCA Civ 655, the Court of Appeal rejected the SRA’s contention that its status as a regulatory body shielded it from an adverse costs order following Dentons’ successful appeal against disciplinary findings. The SRA argued that the principle in Baxendale-Walker v Law Society [2007] EWCA Civ 233, which disapplies the ordinary costs follow the event rule in SDT proceedings to avoid a chilling effect on the regulator’s functions, extended equally to appellate proceedings, relying on obiter observations of Lord Phillips CJ in Baxendale-Walker v Law Society [2007] EWCA Civ 820. The court held itself bound by Wingate v Solicitors Regulation Authority [2018] 1 WLR 3969, in which the Court of Appeal expressly confirmed that parties appealing from the SDT enter the costs shifting regime under CPR r.44.2 on equal footing. The Wingate decision was not rendered per incuriam by the absence of citation to Baxendale-Walker 2, whose relevant passage was in any event obiter. The court reasoned that while the SRA’s regulatory responsibilities justify special costs treatment before the SDT, where the SRA has the benefit of a determination by the SDT and challenges it on appeal, its position is more akin to that of a normal litigant. The court ordered the SRA to pay 65% of Dentons’ costs of both appeals, subject to detailed assessment, and ordered a payment on account of £200,000 within 21 days.

Criminal Costs, New Costs Blog, Solicitor & Client Costs

No Double Recovery | Represented Party Cannot Claim Both Solicitor Fees And Director’s Time

In R (TM Eye) v Dean Hall and R (TM Eye) v Radu and Teodorescu [2026] EWHC 1193 (SCCO), Costs Judge Leonard addressed whether a represented party may recover both its legal representative’s costs and the time spent by its own employees on the litigation. The appellant, a private prosecutor, had succeeded in its appeal against hourly rates assessed by the Legal Aid Agency and claimed appeal costs of approximately £45,052, including substantial time claimed by Mr McKelvey, the appellant’s sole director, alongside time claimed by Mr Strickland, a fully qualified Costs Lawyer who had represented the appellant throughout. Applying Richards v Wellington (Plant Hire) Ltd v Monk and Co (1984) Costs LR Core Vol 79, the Judge held that a represented party may recover only legal costs, not the cost of being a litigant, and that it was not permissible to claim both the costs of the legal representative and the cost of time spent by the company’s own employees. Mr McKelvey did not fall within any of the limited exceptions to that rule as he was not legally qualified, nor was he an expert witness. His time was therefore disallowed in its entirety. This decision clarifies a fundamental principle of costs recovery that applies equally in criminal costs appeals under regulation 10(14) of the Costs in Criminal Cases (General) Regulations 1986, preventing double recovery where professional representation has been instructed.

Commercial Litigation, Foreign Currency Costs, Indemnity Costs, New Costs Blog, Summary Assessment

Foreign Litigation Costs Recoverable As Damages For Breach Of An Exclusive Jurisdiction Clause, Assessed on the Indemnity Basis

In Diageo DV Limited v NIO S.R.L. (in liquidation) [2026] EWHC 1198 (Comm), Anna Dilnot KC (sitting as a Deputy High Court Judge) confirmed that a party entitled to an anti-suit injunction for breach of an exclusive English jurisdiction clause may recover its foreign litigation costs as damages on the indemnity basis, with the burden of proving any failure to mitigate resting on the party in breach. Nio had commenced proceedings in Milan in breach of clause 24.2 of a Share Purchase Agreement, relying instead on a competing Italian jurisdiction clause in a Deed of Transfer which the court found governed only formal share transfer mechanics, not wider payment obligations under the SPA. Having granted summary judgment and a final anti-suit injunction, the court turned to damages. Applying National Westminster Bank plc v Rabobank Nederland (No. 3) [2008] 6 Costs LR 839 and Union Discount Co Ltd v Zoller [2002] 1 WLR 1517, the court held that Diageo could recover all costs reasonably incurred in the Italian proceedings, assessed on the indemnity basis as if assessing English costs on that basis, with reasonableness presumed unless Nio proved otherwise. The court awarded an interim payment of £44,045, representing approximately 90% of €52,238.29 incurred with Italian lawyers, with the balance to be assessed following conclusion of the Italian proceedings. The costs of the application were summarily assessed on the indemnity basis at £33,645, being 80% of the £42,056.90 claimed.

Indemnity Costs, New Costs Blog, Part 36, Payment on Account

A Near Full-Value Part 36 Offer On A Binary Recognition And Enforcement Claim Held To Be ‘Genuine’ Where The Strength Of The Claim Justified It

In Timokhin v Timokhina [2026] EWHC 1194 (KB), Mr Justice Dexter Dias addressed whether it would be unjust under CPR 36.17(5) to impose Part 36 consequences following the claimant’s successful recognition and enforcement claim for £417,416.67. The claimant had made a Part 36 offer of £380,000, representing a 9 per cent discount on his full claim, which he unquestionably beat at trial. The defendant argued the offer was not a genuine attempt to settle under CPR 36.17(5)(e), contending that a near full value offer on a binary recognition and enforcement claim was tokenistic. The court rejected this submission, applying the formidable obstacle test confirmed in ABFA Commodities Trading Ltd v Petraco Oil Company [2024] EWHC 706 (Comm) and Smith v Trafford Housing Trust [2012] EWHC 3320 (Ch). The court held that the strength of the claimant’s case justified a high offer and that binariness is inherent in enforcement claims. The defendant failed to establish injustice. The court ordered standard basis costs to the expiry of the relevant period, indemnity basis costs thereafter, enhanced interest on costs at 6 per cent above base rate, a 10 per cent additional payment, and a payment on account of 65 per cent of costs.

Costs on Discontinuance, New Costs Blog, Payment on Account

CPR 38.6 | Discontinuing LiP Ordered To Pay Defendants’ Costs | Eight Arguments Dismissed | The High Bar For Displacing Costs On Discontinuance

In Lodhia v Twelve Trees Management Company (Bromley-by-Bow) Limited and Others [2026] EWHC 1177 (KB), Mr Justice Linden addressed the costs consequences following a litigant in person’s discontinuance of defamation proceedings after vigorously resisting a summary disposal application for six months. The claimant had issued proceedings in May 2025 concerning a newsletter that accused him of dishonesty. Rather than filing a defence, the defendants applied for summary disposal in July 2025. The claimant resisted that application until January 2026, when he applied to amend his particulars of claim, abandoning his malicious falsehood claims, deleting two defendants entirely, and reducing the statements complained of from eleven to six, thereby conceding the application in full. He subsequently discontinued on 30 April 2026. Applying CPR Rule 38.6 and the principles in Brookes v HSBC Bank plc [2011] EWCA Civ 354, the court held that the presumption that a discontinuing claimant bears the defendants’ costs was not displaced. The court found no relevant change of circumstances attributable to unreasonable conduct by the defendants, rejecting arguments based on pre-action protocol breaches, alleged shifts in the defendants’ position on meaning, and remarks made by a defendant at a residents’ meeting. The claimant was ordered to pay the defendants’ costs on the standard basis, with an interim payment on account of £55,000 plus VAT to the first and third to fifth defendants and £3,600 plus VAT to the second defendant.

Counsel Fees, Hourly Rates, New Costs Blog, Summary Assessment

No Presumption Against Summary Assessment Exists for Multi-Day Hearings | Court Retains Full Discretion In Every Case Under PD 44.9.1

In Mew v The General Dental Council [2026] EWHC 1116 (Admin), Charles Bagot KC, sitting as a Deputy High Court Judge, dismissed an appeal by a specialist orthodontist against erasure from the Dentists’ Register following findings of misconduct by the Professional Conduct Committee of the General Dental Council. The parties agreed that costs should follow the event under CPR 44.2(2)(a), leaving two issues for determination: whether to proceed by summary assessment or refer to detailed assessment in default of agreement, and, if the former, the appropriate quantum. The Appellant opposed summary assessment, arguing that the hearing had lasted more than one day, that multiple items in the schedule required further interrogation, and that the court’s exposure to without-prejudice offers on costs precluded a fair assessment. The Deputy Judge rejected each objection. Applying PD 44.9.1 and the White Book commentary at paragraph 44.6.3, he confirmed there is no rebuttable presumption against summary assessment following hearings exceeding one day, and that the power should be considered in every case. He further held that exposure to the parties’ offers created no unfairness, drawing an analogy with costs management hearings where judges routinely put such matters from mind. Applying CPR 44.3(2) and (5), and noting the Respondent’s blended hourly rate of £138 fell below the Grade D London Band 3 guideline rate of £146, he assessed Counsel’s brief fee of £28,000 plus refreshers as reasonable given the complexity and duration of the underlying 46-day PCC proceedings. After reducing experts’ fees and associated solicitor time costs, the appeal costs were summarily assessed at £75,000 inclusive of VAT, payable within 28 days.

New Costs Blog, Personal Injury, Points of Dispute & Replies, Provisional Assessment

The Court Retains Jurisdiction To Hear Part 23 Applications In Provisional Assessment Proceedings, But Will Ordinarily Decline To Exercise It

In Maidens v Building Supplies Distribution Limited [2026] EWCC 25, District Judge Davies, sitting as Regional Costs Judge, dismissed a defendant’s interim application seeking declarations of compliance and strike-out orders within the provisional assessment regime. The underlying personal injury claim had settled for £43,000, with costs of £56,460 in dispute. The defendant had served Points of Dispute accompanied by an itemised Excel spreadsheet to achieve Ainsworth compliance, which the claimant initially challenged as inadmissible at provisional assessment. The defendant applied under CPR Part 23 for a declaration that its Points of Dispute complied with CPR PD 47 paragraph 8.2 and for strike-out of non-compliant Replies. By the hearing, the claimant had conceded the spreadsheet’s admissibility, leaving only discrete Ainsworth disputes. While the judge accepted that jurisdiction existed under CPR 3.1(2)(k) and (m), rejecting the claimant’s reliance on PD 47 paragraph 14.2(2) as a blanket prohibition, he declined to exercise that jurisdiction. The decision establishes that preliminary applications to determine compliance issues before provisional assessment, though not absolutely barred, will ordinarily be refused as inconsistent with the streamlined, proportionate regime introduced following the Jackson reforms. The defendant was ordered to pay the claimant’s costs of £11,220, reinforcing that such applications risk disproportionate satellite litigation.