Entries by Toby Moreton

CPR 36.17(4)(c) | How To Calculate Enhanced Interest On Costs — Aggregate Method Applies

In Barry v Essex County Council, Deputy District Judge Rathod determined the proper method for calculating enhanced interest on costs under CPR 36.17(4)(c) after the claimant beat her own Part 36 offer. The claimant had succeeded at trial and, under District Judge Mills’s order, was awarded indemnity costs from the offer’s expiry with interest at 9% per annum. The issue was whether interest should be applied to the aggregate of all post-offer costs from the expiry date, or calculated item-by-item from the date each cost was incurred. The court held that the aggregate method applied. McPhilemy v Times Newspapers Ltd was not binding on this point, its compensatory rationale having been treated as limited following OMV Petrom SA v Glencore International AG, which recognised the non-compensatory element of Part 36 enhancements. The aggregate method was consistent with the ‘broad brush’ approach endorsed in Simcoe v Jacuzzi UK Group plc, reflected the post-Jackson settlement policy underpinning Part 36, and was the only workable method, particularly in cases involving summary assessment.

Part 36 Consequences In Detailed Assessment | De Minimis Form Errors Will Not Invalidate Offers

In Stockler and Another v The Corporation of the Hall of Arts and Sciences, Deputy Costs Judge Joseph determined consequential issues following detailed assessment of the defendant’s costs, assessed at £120,221.98. The central issue was whether the defendant’s Part 36 offer dated 29 October 2024 to accept £115,000 was valid despite a clerical error on form N242A misdescribing it as a “claimant’s offer”. Applying F&C Alternative Investments v Barthelemy (No 3), the court held the error was de minimis and the offer valid. The court rejected the claimants’ argument that Part 36 consequences would be unjust given adverse Ainsworth rulings, holding that such reasoning would make consequences unjust “in almost every detailed assessment”. Consequently, the defendant was awarded costs on the standard basis until 19 November 2024 and indemnity basis thereafter, plus enhanced interest and the 10% additional amount under CPR 36.17(4)(d). 

Indemnity Costs Awarded Where Proprietary Estoppel Claim Pursued As “Anvil For Settlement” Against Elderly Mother

In Grijns v Grijns [2025] EWHC 2853 (Ch), Master Bowles (sitting in retirement) determined costs following dismissal of the claimant’s proprietary estoppel claim concerning a £3.85 million Chelsea property. The defendants sought indemnity costs; the claimant argued for no order citing the defendants’ pre-litigation conduct and alleged failure to mediate. The court held that costs follow the event, with no reduction for the claimant’s minor success on an accounting issue, which was peripheral. The defendants’ 10 June 2023 entry to the property was lawful and not causative of settlement failure. Applying PGF II SA v OMFS Co Ltd [2014] 1 WLR 1386, the court found no unreasonable refusal to mediate where the claimant imposed unreasonable participation conditions. The court awarded indemnity costs under Three Rivers District Council v Bank of England [2006] 5 Costs LR 714, finding the claim weak and based on invented assurances, with litigation pursued as an “anvil for settlement” through tactical capacity allegations and a late committal application. Post-judgment costs were awarded on the standard basis.

CPR 63.26(2) | IPEC Costs Order Quashed Where ‘Unreasonable Conduct’ Finding Overstated Application’s Lack Of Merit

In Sergio Mendes Costa v Dissociadid Ltd & Anor, the Court of Appeal set aside an IPEC costs order where the judge had found the appellant’s application “so lacking in merit” as to constitute unreasonable behaviour under CPR 63.26(2). The appellant, a litigant in person, had applied on 1 July 2024 to strike out parts of the respondents’ quantum claim and for further information under Part 18, though the application notice referenced only the strike-out due to a character limit. HHJ Hacon’s order of 15 July 2024 dismissed the strike-out application, found it unreasonable, and ordered costs of £2,500 without addressing the Part 18 aspect or apportioning costs between the two elements. The Court of Appeal held the judge erred in two respects: first, the strike-out application’s core argument—that the quantum claim exceeded the scope of an earlier declaration—was not so devoid of merit as to satisfy the high threshold for unreasonable behaviour; second, the judge failed to address the Part 18 request and should have apportioned costs accordingly. Lord Justice Arnold dissented, finding the judge’s case management decision within his discretion. The appeal was allowed and the case remitted for further directions.

SCCO Rules That Solicitors Act Proceedings Qualify As “Claims” For CPR 25.26 Purposes But Dismisses Security Application On The Facts

In Pickering v Thomas Mansfield Solicitors Limited, Costs Judge Nagalingam dismissed a solicitor firm’s application for £150,000 security for costs in detailed assessment proceedings under the Solicitors Act 1974. The firm sought security under CPR 25.27(b)(vi), arguing the client had dissipated assets by using £650,000 from gold and jewellery sales for mortgage repayments, property investments, and debt settlements. The court held that Solicitors Act proceedings, though initiated by statutory application rather than traditional claim form, constitute a “claim” for CPR 25.26 purposes, permitting security applications. However, the condition in CPR 25.27(b)(vi) was not satisfied. The client’s transactions converted liquid funds into other enforceable assets—including unencumbered properties—rather than placing assets beyond reach. The court rejected adverse inferences, noting the evidential burden rested on the applicant solicitor, who had failed to utilise disclosure procedures. Given substantial payments already made, the client’s compliance with prior orders, and the assessment’s imminence, ordering security would not be just under CPR 25.27(a). The firm was ordered to pay the client’s costs.

Successful Defendant’s Costs In Judicial Review Claim Reduced by 15% for Partial Failure On Discreet Issue

In R (on the application of Prestige Social Care Services Ltd) v Secretary of State for the Home Department, the Administrative Court addressed whether, and if so to what extent, failure by the defendant on a discreet legal issue on an otherise successful defence of judicial review proceedings should be reflected in costs. The claimant challenged revocation of its sponsor licence. Following a one-day hearing, His Honour Judge Tindal dismissed the claim, finding the revocation lawfully sustainable under Annex C2 of the Sponsor Guidance (breach of sponsor duties) pursuant to section 31(2A) Senior Courts Act 1981, notwithstanding that the court found the defendant’s reasoning under Annex C1 (non-genuine vacancies) irrational. On costs, the court held the defendant was entitled to costs as the successful party under CPR 44.2(2)(a), but applied a 15% reduction to reflect its failure on the Annex C1 issue, recognising that most costs were “common costs” under Multiplex v Cleveland Bridge. The court further rounded down the final figure to £18,000 (from an original schedule of £21,712.70) noting that six hours’ preparation for a one-day defendant hearing was excessive. Payment was ordered within three months.

CPR 44.11 | 75% Costs Reduction For Egregiously Defective Bill | Solicitors Remain Vicariously Liable For Costs Draftsman Failures

In Hyder v Aidat-Sarran, Deputy Costs Judge Roy KC determined applications for relief from sanction and to strike out a costs claim under CPR 44.11. The claimant served a defective bill one day late. A second electronic bill failed to rectify the defects and added further errors, despite the problems being clearly identified in the defendants’ points of dispute. The court granted relief from sanction, finding the one-day delay neither serious nor significant; the defective bill constituted belated compliance with the unless order. However, on the CPR 44.11 application, the court found multiple, persistent, egregious, and unexplained failures across both bills, coupled with a serious lack of contrition. Applying Gempride Ltd v Bamrah [2018] EWCA Civ 1367, the court held solicitors vicariously liable for costs draftsmen’s errors and directly responsible for supervisory failures. Strike-out was rejected as too draconian, but the court imposed a severe sanction: 75% of assessed costs were disallowed, meaning recovery of only 25%. Interest on costs was disallowed from 30 July until service of a redrawn bill. 

Failed Fraud Allegations Justify Indemnity Costs Order Despite Proper Conduct

In Malhotra Leisure Ltd v Aviva Insurance Ltd, the Commercial Court determined consequential costs following rejection of the Defendant insurer’s fraud allegations. The Claimant sought indemnity costs under CPR 44.3, arguing the failed allegations took the case “out of the norm.” The Defendant contended its fraud defence was properly pleaded and responsibly pursued through experienced counsel. The court ordered indemnity costs despite accepting at [27] that the allegations were properly pleaded and pursued appropriately. Applying Thakkar v Mican [2024] 1 WLR 4196, the judge identified six factors justifying the order: the exceptional seriousness of the conspiracy allegations; foreseeable reputational and financial harm; pursuit to trial without settlement discussions; objective weaknesses (including lack of direct evidence and flawed motive case) apparent or reasonably discoverable from an early stage; evolving unpleaded theories at trial; and late withdrawal of specific allegations after substantial costs incurred. The Defendant was ordered to pay costs on the indemnity basis with £660,000 interim payment on account. 

Are Courts Bound By Summary Assessment Principles When Ordering Pro Bono Costs Under Section 194?

In EJW Builders Ltd & Anor v Marshall & Ors, the High Court assessed a pro bono costs order under section 194 of the Legal Services Act 2007, reducing a claimed £393,329 to £117,000. The defendants had been represented pro bono by Morgan Lewis & Bockius UK LLP (allocated by Law Works) and counsel (allocated by Advocate) in successfully defending a partnership claim. The claimants challenged the costs schedule, arguing London guideline hourly rates should not apply and that claimed rates exceeded guidelines without justification, citing Samsung Electronics Co Ltd v LG Display Co Ltd [2022] EWCA Civ 466. The court held that where pro bono representation is allocated by legal charities rather than chosen, a Truscott v Truscott [1998] 1 WLR 132 reasonableness test is artificial. However, applying the discretionary principles in Manolete Partners plc v White (No 2) [2025] 1 WLR 1094 and “erring on the side of caution,” the court reduced all hourly rates to London Band 2 guideline levels, found attendances and document review time excessive (particularly criticising partners doing all document work with no delegation to junior associates), but allowed counsel’s fees in full. The court exercised its section 194 discretion to assess £117,000 as appropriate for payment to the Access to Justice Foundation.