Entries by Toby Moreton

Part 36 Offers Cannot Displace The Solicitors Act One-Fifth Costs Rule

In *Griffin v Kleyman & Co Solicitors Ltd*, Costs Judge Leonard determined the costs of a solicitor-client assessment under section 70 of the Solicitors Act 1974 and the antecedent Part 8 application. The claimant’s bills, totalling £181,954.64, were assessed at £154,039.94, a 15.34% reduction, entitling her to a £20,269.88 refund. As the reduction was less than one-fifth, section 70(9) provided that the defendant was prima facie entitled to its assessment costs. The claimant argued her settlement offer of 23 May 2022 constituted “special circumstances” under section 70(10) to displace this, relying on *[Angel Airlines SA v Dean & Dean]*. The judge held the offer was not in proper form; it was a misconceived attempt to apply CPR Part 36 costs consequences to a Solicitors Act assessment, contrary to the reasoning in *[Zuhri v Vardags Ltd]*, and required the defendant to pay the claimant’s costs. Accepting it would not have bettered the defendant’s position. The offer therefore did not establish special circumstances. However, due to the defendant’s negligent overbilling of £4,334.10 and poor record-keeping which impeded the process, the judge awarded it only 80% of its assessment costs. For the separate Part 8 application costs, governed by CPR 44.2, the judge found the defendant’s initial opposition unjustified and ordered the claimant to pay 50% of the defendant’s costs of those proceedings.

CPR 26.9(10)(e) | Wrongful Interference With Goods Against Police Mandates Multi-Track Allocation | Part 36 Acceptance Does Not Oust Fixed Costs

In The Executors of the Estate of Kenneth Collins v The Chief Constable of Thames Valley Police, Costs Judge Whalan determined whether the claimant’s costs following a pre-issue Part 36 settlement were recoverable on the standard basis or limited to fixed recoverable costs under the Civil Procedure (Amendment No. 2) Rules 2023. The claim concerned the police’s destruction of firearms and was framed in negligence and/or wrongful interference with goods. The judge held the claim fell within CPR 26.9(10)(e)(i) as a claim against the police which included a claim for an intentional tort, namely conversion or trespass to chattels, mandating multi-track allocation and thereby excluding FRCs. On the secondary issues, the judge found that FRCs would otherwise have applied because the Part 8 costs-only proceedings were issued after 1 October 2023, and that the Part 36 agreement did not oust FRCs. The decision confirms an escape route from FRCs for police claims involving deliberate acts and provides SCCO-level endorsement of county court decisions on the transitional provisions.

Does Removal As Trustee Always Mean Loss Of Indemnity?

In Smith and others v Campbell and others [2026] EWHC 144 (Ch), Deputy Master Holden determined costs following a judgment ordering the removal of two of four trustees. The partially successful claimants sought an order that the trustees pay their costs and contended that the trustees should be deprived of their indemnity from the trust fund. On the claimants’ claim for costs, applying the discretion under s.51 of the Senior Courts Act 1981 and CPR r.44.2, the court found the claimants’ conduct unreasonable, including issuing proceedings without pre-action correspondence, pursuing exaggerated misconduct allegations that formed the bulk of the litigation costs, and failing to engage in early ADR (including rejecting an early proposal for one trustee to retire). No order as to costs was made. On the trustees’ indemnity, applying s.31(1) of the Trustee Act 2000, CPR r.46.3 and the principles in Price v Saundry [2019] EWCA Civ 2261, the court held the trustees’ costs were properly incurred: they had reasonably defended dismissed allegations and made a good-faith early offer addressing the relationship breakdown. The trustees therefore retained their indemnity from the trust.

Inadequate Estimate Fails To Establish Special Circumstances Under s70(3) Where Client Would Have Made The Same Choices

In Biggar v Howard Kennedy LLP [2026] EWHC 132 (SCCO), Costs Judge Leonard determined the claimant’s application under section 70 of the Solicitors Act 1974 for assessment of 19 bills totalling £195,954.60 from his former solicitors. The issues were whether the first three bills were ‘paid’, barring assessment under section 70(4), and whether ‘special circumstances’ under section 70(3) justified assessing the remainder. Applying Menzies v Oakwood [2024] UKSC 34, the judge held payment required agreement inferable from conduct; the claimant’s arrangement of payments against the outstanding balance sufficed, so those bills were paid and beyond jurisdiction. On special circumstances, the judge found none. The initial £10,000–£15,000 estimate was expressly preliminary and superseded, notably when the claimant later sought €1.3 million in funding. Evidence, including a March 2023 email, showed the claimant would have continued instructing the defendant regardless of updated estimates. The claimant’s other arguments — that a restraint order over his assets, the defendant’s enforcement proceedings, and his ongoing criminal trial constituted special circumstances — were also rejected. The application was dismissed.

Unless Order Stands | Defendants Fail To Evidence Impecuniosity After Non-Payment Of Interim Costs

In Fieldfisher LLP v Scherbakova & Anor, the Senior Courts Costs Office dismissed the Defendants’ application to discharge an unless order or obtain relief from sanctions following non-payment of an interim payment order of £741,122.85 in proceedings to recover unpaid solicitors’ fees as a debt. The Defendants argued that a costs draftsman’s report criticising the fees constituted a material change of circumstances under CPR 3.1(7), that they were impecunious, and that the unless order was a variation under CPR 25.20(6). Applying Tibbles v SIG plc and the Denton principles, Costs Judge Nagalingam found no material change, as the report contained points always capable of being raised earlier. Critically, the Defendants failed to provide the “detailed, cogent and proper evidence” of impecuniosity required by Michael Wilson & Partners Ltd v Sinclair; inference and assertion were insufficient. CPR 25.20(6) was inapplicable, as the unless order was a sanction, not a variation. Relief was refused and the unless order stood.

“Extraordinarily High” Costs With “Paucity Of Information” Result In £43 Million Payment On Account

In Município de Mariana & Others v BHP Group (UK) Ltd & Another, the court determined consequential costs matters following a Stage 1 Trial judgment on liability for the Fundão dam collapse. The claimants sought £189 million in costs and a payment on account of £113.5 million. The defendants argued costs should be deferred until after Stage 2 or substantially reduced. Applying Weill v Mean Fiddler Holdings Ltd and Langer v McKeown, the court held an immediate costs order for Stage 1 was appropriate but limited to costs of that trial only. A 10% reduction was applied for issues lost. For the purpose of the payment on account, the court stripped out sign-up and collateral costs, applying Motto v Trafigura Ltd and Weaver v British Airways plc, and made further adjustments for funding-related disbursements, arriving at a working figure of £80 million. A payment on account of £43 million was ordered, stayed pending appeal. Pre-judgment interest was awarded under CPR 44.2(6)(g). Permission to appeal was refused.

Executors Lose Estate Indemnity After Hostile Removal Litigation

In Dorothy House v Helme [2026] EWHC 75 (Ch), HHJ Paul Matthews determined costs issues following the defendants’ concession that they should be removed as executors. The claimants, residuary beneficiary charities, sought their costs on the indemnity basis. Applying Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hammer Aspden and Johnson [2002] EWCA Civ 879, the court found the defendants’ litigation conduct “out of the norm”, including accelerating a property exchange (inferring this was to pre-empt an injunction), serving evidence late and without permission, and refusing reasonable offers to retire. Costs were awarded on the indemnity basis. On the defendants’ claim for an indemnity from the estate under the Trustee Act 2000 s.31 and CPR PD46 para 1, the judge held they were not entitled. The litigation was hostile, conducted on the defendants’ own behalf, not the estate’s. Alternatively, any indemnity was lost as costs were not “properly incurred” due to administration misconduct including delay, self-dealing, and conflict of interest.

CFA Termination | Why Accepting Repudiation Instead Of Using Contractual Rights Left Solicitor With Nothing

In The Winros Partnership v Global Energy Horizons Corporation [2025] EWHC 3362 (Ch), Mr Justice Marcus Smith dismissed an appeal from Senior Costs Judge Gordon-Saker’s decision assessing a solicitor’s bill at nil. The solicitor had terminated a conditional fee agreement by accepting the client’s repudiatory breach, rather than invoking an express contractual termination clause entitling it to fees for work done. The solicitor then sought payment via a restitutionary quantum meruit, arguing total failure of basis. Applying the “Obligation Rule” from Dargamo Holdings Ltd v Avonwick Holdings Ltd and principles from Barton v Morris, the court held that no unjust enrichment claim arose where the CFA expressly allocated termination risk through clause 14.3. To permit a quantum meruit would circumvent the contractual risk allocation the parties had agreed. Obiter, the court noted that generalised unjust enrichment claims were inappropriate for determination within a Solicitors Act detailed assessment. The decision confirms that solicitors who bypass express CFA termination rights in favour of accepting repudiation risk recovering nothing.

Court Of Appeal Overrules Mundy | 90:10 Liability Offers Valid Under Part 36 — But Only Where Liability Is Determined

In Smithstone v Tranmoor Primary School [2026] EWCA Civ 13, the Court of Appeal dismissed an appeal concerning costs following settlement of a fast-track personal injury claim subject to the fixed costs regime. The claimant made a Part 36 offer to settle liability on a 90/10 basis, which was rejected. The claim subsequently settled for £2,650 at trial without any determination of liability. The Deputy District Judge awarded fixed costs only. On appeal, the court held that the approval order constituted a “judgment” for CPR r.36.17 purposes. On the central issue of principle, the court overruled Mundy v TUI UK Ltd, holding that a 90/10 liability offer could, following Huck v Robson, engage CPR r.36.17(4) as a genuine offer to compromise. However, on the facts, the rule was not triggered because liability was never determined; a global monetary settlement could not be shown to be “at least as advantageous” as the liability offer. The order for fixed costs of £7,114.50 was upheld.