Entries by Toby Moreton

Fixed Recoverable Costs Are Not The Benchmark For Fair Solicitor-Client Remuneration

In Perrett v Wolferstans LLP, Senior Costs Judge Rowley determined the final issue in a Solicitors Act 1974 assessment. Following a line-by-line assessment reducing profit costs to £3,864, the court had to “step back” and decide if that sum was fair and reasonable under the Solicitors’ (Non-Contentious Business) Remuneration Order 2009. The claimant argued the costs were unreasonable as they vastly exceeded the £900 fixed recoverable costs, contending the solicitors failed to warn of this shortfall. The defendant maintained the contract’s 25% damages cap provided sufficient informed consent. The Judge held the proper approach was first to assess time and rates, then consider the factors under Article 3 of the Solicitors’ (Non-Contentious Business) Remuneration Order 2009. The court rejected the claimant’s core argument, ruling that inter partes fixed costs represent a different scheme and do not set the benchmark for solicitor-client remuneration, endorsing obiter comments in SGI Legal LLP v Karatysz. The 25% cap provided adequate client information, and the item-by-item assessment had already addressed reasonableness. The sum of £3,864 was upheld as fair and reasonable.

Costs After Mixed Success In Multi-Claim IP Litigation | Applying The Three-Question Test

In Getty Images (US), Inc & Ors v Stability AI Ltd, Mrs Justice Joanna Smith DBE determined costs following a trial where the claimants abandoned three substantial claims and achieved only partial success on trade mark infringement. Applying the Hospira v Novartis issue-based approach, the court held the defendant was the overall winner, having successfully defended the abandoned claims and the secondary copyright infringement claim. As overall winner, the defendant was entitled to general costs. However, the trade mark claim was a suitably circumscribed issue on which the claimants succeeded, obtaining undertakings and an inquiry as to damages. The court held that the defendant should pay 75% of the claimants’ costs attributable to that claim, quantified at 17.5% of total litigation costs, producing a net reduction of 30.6% from the defendant’s recovery. On interim payments, the court awarded 90% of budgeted costs, 70% of incurred costs, 70% of out-of-budget interim application costs, and 20% of the defendant’s budget overspend of £394,985.31.

Solicitors’ Withdrawal Does Not Excuse Late Costs Budget | Relief From Sanctions Refused

In National House-Building Council v Hodson Developments Ltd & Ors [2025] EWHC 3438 (TCC), the court refused the first defendant’s application for relief from the sanction imposed by CPR 3.14 for failing to file a costs budget. The first defendant, a development company, missed the 30 May 2025 deadline after its solicitors terminated their retainer. Applying the three-stage test from Denton v White, Recorder Singer KC found the breach was serious and significant, causing the need for an additional hearing. No good reason was established: the director had received clear warnings and should have ascertained the deadline despite being preoccupied with a separate planning inquiry. Working out the deadline “would not have been a difficult exercise.” Considering all circumstances, including the need under CPR 3.9(1)(b) to enforce compliance with rules, the court held it would not be manifestly unjust to maintain the sanction. The first defendant was therefore treated as having filed a budget comprising only court fees for future costs, with estimated costs of approximately £260,000 affected. Incurred costs remained unaffected by the sanction.

The Duty Of Cooperation Under CPR 1.3 | Opportunism And Aggression Result In Fractional Costs Recovery

In Limbu & Others v Dyson Technology Ltd & Others, Mr Justice Pepperall determined case management and costs issues at the first CMC in claims by migrant workers alleging exploitative conditions in Malaysian factories within the Dyson supply chain. The court rejected the defendants’ proposal for a trial of preliminary liability issues on assumed facts, holding such an approach risked confusion, disproportionate cost, and delay. Instead, a split trial of liability and quantum for lead claimants was ordered, with the unjust enrichment claim deferred. On costs, the defendants succeeded in striking out defective parts of the Reply but their aggressive conduct was criticised. The court awarded 50% of their costs and, on summary assessment, found the reasonable and proportionate costs to be £12,000—not the £61,366.03 claimed—resulting in a £6,000 award. The court granted early specific disclosure to correct information asymmetry. Costs budgeting was adjourned to a future hearing, but the court warned that it was “very concerned” by the parties’ “enormous” filed budgets of £5.2m and £7.5m and that approval at those levels should not be expected.

Court Grants Non-Party Costs Order Against Secured Creditors Who Funded Failed Construction Claim

In Thomas Barnes & Sons PLC (In Administration) v Blackburn with Darwen Borough Council the Technology and Construction Court granted a non-party costs order against secured creditors who had funded an insolvent company’s failed construction claim. The Respondents — a former director/shareholder and the widow and executors of his late brother — were debenture holders who funded the litigation and stood to benefit as primary secured creditors. Applying Dymocks and Goknur, the court found they were “real parties” to the litigation: they funded it, had a direct financial interest, and (in the lead Respondent’s case) exercised a real degree of control alongside the administrators. The provision of £583,000 in security did not preclude a further order. The Respondents were held jointly and severally liable for the defendant’s unrecovered costs, with the executors’ liability limited to the estate. The decision confirms that secured creditors funding administration litigation primarily for their own financial benefit assume the costs risks ordinarily borne by litigants.

Dos Santos Principles Considered | Trial Outcome Remains Relevant To Reserved Costs

In Gable Insurance AG v Dewsall & Others the court determined reserved costs following interim applications and a trial where the claimant succeeded against some defendants but failed against another. Applying Dos Santos v Unitel [2024] EWCA Civ 1109, the court held that the decision does not create a rule that successful applicants automatically recover costs of interim applications; where costs are reserved, the trial outcome remains relevant. The successful defendant (Mrs Dewsall) was awarded her costs of the main claim on the standard basis. For the search order, no order as to costs was made between the claimant and Mrs Dewsall: the application primarily targeted her husband and she succeeded at trial, but her inadequate disclosure contributed to the need for the order. For the second freezing order, a cross-order was made: Mrs Dewsall paid 50% of the claimant’s costs (standard basis), while the claimant paid 50% of her costs (indemnity basis) for unreasonably relying on a discredited investigative report. Mutual costs orders were set off.

Can A Defendant Insurer Recover VAT On Costs Where The Insured Is In Liquidation?

In Moller & Ors v One Touch Solution Ltd & Anor, His Honour Judge Pearce determined the recoverability of VAT on assessed costs where the receiving party was in creditors’ voluntary liquidation. The claim was brought under the Third Parties (Rights Against Insurers) Act 2010. Following amendment of the Particulars of Claim, the claimants were ordered to pay the first defendant’s costs of amending its defence. At summary assessment, the court assessed those costs at £25,000 net of VAT, reserving the VAT issue for written submissions. The defendants argued that neither the insolvent first defendant nor its insurer could recover VAT, citing Friston on Costs. The claimants relied on Regulation 111(5) of the Value Added Tax Regulations 1995, which permits a deregistered person to reclaim VAT on post-deregistration services attributable to prior taxable supplies. The court accepted this argument, holding that the first defendant’s estate could recover VAT via its liquidators. Consequently, no VAT loss had been suffered, and the claimants were not liable for VAT. The claimants were also awarded £1,000 costs of the submissions.

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Monthly Costs Law RoundUp | December 2025

Detailed Assessment & Procedure CPR 47.8 | Master Brown Orders Unless Order For Commencement | CPR 47.7 Held To Be Mandatory (20/12/2025) Master Brown confirmed that CPR 47.7 imposes a mandatory obligation to commence detailed assessment, not an option. The court held that CPR 47.8 discretion cannot be used to convert an interim payment into […]

CPR PD 47 Para 8.2 | Costs Judge’s “Hands Tied” By Non-Compliant Points Of Dispute

In Aareal Bank AG v Lumineau & Anor [2025] EWHC 3299 (SCCO), Deputy Costs Judge Lightman conducted a detailed assessment of third-party costs. On solicitors’ hourly rates, the judge found the case sufficiently unusual to justify modest departures from the London 2 guideline rates, allowing £410 for a partner (claimed £433.50; guideline £398) and £275 for an associate. On leading counsel, prior involvement justified his instruction, but not his full rates throughout; specific items were reduced to junior counsel levels. The paying party’s points of dispute failed to comply with CPR PD 47 para 8.2 as interpreted in Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178: while general points were identified, no concise grounds were stated for individual items. The judge, expressing frustration that his “hands are tied”, allowed several challenged items in full, including junior counsel’s reading-in fees and solicitors’ hearing attendance. The decision demonstrates that non-compliant points of dispute may shield a receiving party’s costs from reduction.

CPR 47.8 | Master Brown Orders Unless Order For Commencement | CPR 47.7 Held To Be Mandatory

In Awan v Patel & Others [2025] EWHC 3332 (SCCO), Master Brown granted an application by the paying party to compel the receiving party to commence detailed assessment of costs. The underlying costs order, made in October 2017, included an interim payment on account of £118,800 which had been enforced but never followed by a bill of costs. The central issue was whether CPR 47.7 imposed a mandatory obligation to commence detailed assessment within three months. Master Brown held that the word “must” in CPR 47.7 was imperative, not optional, a conclusion supported by Haji-Ioannou v Frangos [2006] EWCA Civ 1663. While CPR 47.8(1) conferred limited discretion, its purpose was to enforce the obligation and bring finality; it could not be used to convert an interim payment into a final order. Arguments based on delay and alleged abuse were rejected. The court ordered the respondents to serve a Notice of Commencement and Bill of Costs by way of an unless order.