Entries by Toby Moreton

Security For Costs Under CPR 3.1(5) Ordered As Alternative Sanction To Debarring For Non-Compliance

In *SFO & Others v Smith & Others (Thomas debarring application)*, the Honourable Mr Justice Henshaw determined applications concerning Mr Nicholas Thomas’s participation in a forthcoming Enforceability Hearing. The hearing, listed for February 2026, was to consider whether the Supreme Court’s decision in *[PACCAR Inc v Road Haulage Association Ltd]* rendered the Harbour Investment Agreement unenforceable, thereby potentially reopening final orders from a 2021 Directed Trial before Foxton J. Harbour Fund II LP, a litigation funder with priority entitlements established at that trial, applied to debar Mr Thomas from the hearing due to his non-compliance with a prior Debarring Directions Order made by Foxton J on 31 March 2023. The DDO had required Mr Thomas, upon issuing any “Relevant Claim,” to file evidence addressing the involvement of Dr Gerald Smith and identifying his litigation funding. Harbour contended that Mr Thomas’s evidence in response to his November 2024 cross-application was unsatisfactory, particularly regarding Dr Smith’s role, and cited a history of unpaid costs orders. Applying the court’s inherent jurisdiction and the principles from *Arrow Nominees Inc v Blackledge* and *Michael Wilson & Partners Ltd v Sinclair*, Henshaw J held that while Mr Thomas’s explanations were concerning, his conduct did not justify the draconian step of debarment, as the PACCAR point was a distinct legal issue and not a clear abuse. However, pursuant to CPR r.3.1(5), the judge found it just to order security for costs due to Mr Thomas’s breaches of court orders. He required Mr Thomas to provide £200,000 in security, via payment into court or a UK bank guarantee, as a condition for pursuing his cross-application and defending Harbour’s application. The outcome was that Mr Thomas was not debarred but was required to provide security for costs.

Probate Challenger Ordered To Pay Indemnity Costs After Maintaining Baseless Opposition For Eight Years

In Burgess v Whittle, HHJ Paul Matthews determined costs following a successful probate claim upholding a 2014 will. The claimant sought indemnity costs from the first defendant, who resisted by invoking the second probate exception from Spiers v English [1907] P 122, arguing that her knowledge and means of knowledge had reasonably led to an investigation of the will’s validity. The court rejected this submission, holding there was no reasonable basis for suspecting invalidity: the will was professionally drafted, the beneficiary change kept gifts within the family, and the first defendant conducted no meaningful investigation despite having access to all relevant material for years. The general costs rule therefore applied. The court further ordered indemnity costs, finding the first defendant’s conduct was “out of the norm” due to the speculative nature of the challenge, a last-minute concession after the claimant travelled from Australia, and refusal of settlement offers. A payment on account of £109,000 was ordered, with interest on costs. Finally, applying Sutton v Drax (1815) 2 Ph 323, the court granted the claimant an indemnity from the estate for unrecovered costs, recognising that a successful legatee propounding a will is entitled to the same protection as an executor would receive.

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Monthly Costs Law RoundUp – October 2025

Appellate Costs Variation Of Costs Orders After Successful Appeal | When Previous Orders Should Stand (05/10/2025) The Court of Appeal (Moylan LJ, Falk LJ, Cobb LJ) refused to vary a 2021 costs order in Potanina v Potanin (No.2) (Costs) [2025] EWCA Civ 1223 despite the husband’s subsequent Supreme Court success, holding that where the fundamental […]

Director Ordered To Pay Creditor’s Costs Personally Despite Rule 3.4 In Failed Administration Application

In Re Sandstone Legal Ltd [2025] EWHC 2771 (Ch), ICC Judge Barber ordered a director to pay a creditor’s costs personally in an administration application, despite rule 3.4 of the Insolvency (England and Wales) Rules 2016 treating the application as made by the company. Mr Settle applied for an administration order seeking a pre-pack sale to his own company. The court rejected this at the first hearing, finding he had knowingly included material, self-serving untruths in his witness statements. An administration order was later granted with different office-holders. On costs, the court held that rule 3.12(2) IR 2016 did not preclude judicial discretion, which remained under section 51 of the Senior Courts Act 1981 and CPR 44.2 (applied via rule 12.41). Mr Settle’s costs were capped at the issue fee. Critically, the court held rule 3.4 did not prevent a personal costs order where the director was the “real party” conducting litigation on knowingly false evidence for personal benefit. Mr Settle was ordered to pay Seven Stars’ costs personally up to the first hearing, with later costs payable as an administration expense.

CPR 46.27 Variation Refused Despite Financial Resources | Objective Unreasonableness Test Applied

In R (Badger Trust and Wild Justice) v Natural England [2025] EWHC 2761 (Admin), Fordham J refused Natural England’s application under CPR 46.27 to vary default Aarhus Convention costs caps from £10,000 per claimant to £20,000 (Wild Justice) and £30,000 (Badger Trust). The court analysed the two-limb test for “prohibitively expensive” proceedings under CPR 46.27(3), clarifying that Limb (a) involves a means test of real-world affordability whilst Limb (b) establishes an independent objective reasonableness standard. The court characterised Rule 26 caps as a “soft presumption” representing a principled balance to facilitate environmental justice, not mere placeholders. Even assuming real-world affordability, the variation was held objectively unreasonable given: the claim’s reasonable prospects; its importance for the environment; its paradigm environmental protection nature; and the need for NGO claimants to function as “repeat players”. The application was dismissed with Natural England ordered to pay the claimants’ costs. The judgment provides important guidance on when public authorities may successfully vary Aarhus caps upward.

Can A Vulnerable Party’s Change Of Mind Justify Part 36 Withdrawal Of An Accepted Part 36 Offer?

In Chinda v Cardiff & Vale University Health Board, the High Court refused a claimant’s application under CPR 36.10 to withdraw an accepted Part 36 offer in a clinical negligence claim concerning delayed diagnosis of spinal tuberculosis. The claimant made a Part 36 offer following a round table meeting, combining lump sum, periodical payments, and provisional damages. Days later, he sought to withdraw it, arguing his pain, fatigue, and vulnerability had impaired his instructions at the meeting, and that subsequent financial advice led him to prefer a lump sum settlement. The defendant had accepted the offer. Applying CPR 36.10(3) and authorities including Cumper v Pothecary and Retailers v Visa, Senior Master Cook held that a change of mind based on reassessment of known facts did not constitute the requisite “change of circumstances,” which requires radical alteration such as new evidence or legal development. The court emphasized that vulnerability provisions in PD 1A address participation in proceedings and giving evidence, not settlement decision-making capacity. Part 36’s self-contained code prioritizes certainty and predictability. The application was refused.

When Should Costs Be Awarded In A Foreign Currency? Supreme Court Rejects ‘Loss Reflection’ Test

In Process & Industrial Developments Ltd v The Federal Republic of Nigeria [2025] UKSC 36, the Supreme Court held that costs orders should ordinarily be made in the currency in which the solicitor billed the client and the client paid, rejecting a test requiring inquiry into the currency that reflects the receiving party’s underlying loss. The appeal arose from Nigeria’s successful section 68 Arbitration Act 1996 challenge to two arbitration awards obtained by fraud. Following an eight-week Commercial Court trial, Nigeria was awarded costs, having incurred £44.217 million in legal fees billed and paid in sterling. P&ID argued costs should be in naira, Nigeria’s national currency, which had depreciated significantly against sterling, claiming the sterling award gave Nigeria a windfall. P&ID relied on Cathay Pacific Airlines Ltd v Lufthansa Technik AG [2019] EWHC 715 (Ch), contending costs should reflect the currency of the receiving party’s loss. The Supreme Court rejected this approach. Costs awards under section 51 of the Senior Courts Act 1981 and CPR r.44.2 are discretionary statutory contributions toward litigation expenses, not compensatory awards for loss. Courts should not investigate how parties funded litigation, as this risks disproportionate satellite litigation. The general rule promotes certainty and avoids complex inquiries. The appeal was dismissed.

Apportioning Defendants’ Costs By Time | When Evolving Claims Engage Separate Interests

In Jon Flowith & Partners v Greaves & Ors, the High Court determined costs liability following a strike-out application. The claimant (C) had lost an application by the third defendant (D3) to strike out claims unless amended particulars were served. The first and second defendants (D1/D2) sought their costs of the application from C, who contended for no order. The court ordered C to pay D1/D2’s costs from the date of receiving C’s skeleton argument onwards, but reserved D1/D2’s earlier costs to the final trial. The court found D1/D2 had a separate interest requiring representation under Bolton MDC v Secretary of State for the Environment [1995] 1 WLR 1176, as they had competing contentions with D3 on contractual construction and C’s case evolved to implicate them with unpleaded allegations. D1/D2’s counsel added value without duplicating D3’s submissions. The temporal division reflected that D1/D2 initially opposed aspects of D3’s application before supporting it after C’s skeleton revealed the full scope of C’s developing case. The judgment demonstrates how costs of separately interested defendants should be apportioned by reference to their changing stance during applications.

SCCO Guide 2025 Published

The Senior Courts Costs Office has published its 2025 Guide, with a foreword by Lord Justice Colin Birss, Deputy Head of Civil Justice.

The 2025 edition supersedes the 2023 Guide and reflects procedural reforms introduced by the Civil Procedure (Amendment) Rules 2024 and the consolidation of electronic filing provisions into Practice Direction 5C. It introduces a number of changes impleneted since 2023 affecting Court of Protection costs, detailed assessment procedures, and Supreme Court and JCPC assessments.

Court of Protection fixed costs increases

From 1 April 2024, all Court of Protection fixed cost categories were increased by approximately 27%, following a review by the SCCO and the Office of the Public Guardian (OPG). These revised rates reflect inflation and administrative cost pressures.

Solicitors’ costs in court proceedings:

      • Category I (deputy appointment) – now £1,204 (plus VAT), up from £950

      • Category II (trustee applications) – now £633 (plus VAT), up from £500

      • New Category III: applications under Practice Direction 9D paragraph 4, set at £633 (plus VAT)

Deputy remuneration:

      • Annual management fee (first year) – now £2,116 (plus VAT), up from £1,670

      • Annual management fee (subsequent years) – now £1,672 (plus VAT), up from £1,320

      • Health and welfare deputy maximum – now £703 (plus VAT), up from £555

      • Report preparation – now £336 (plus VAT), up from £265

      • Basic HMRC tax return – now £317 (plus VAT), up from £250

The threshold for the 4.5% alternative fee calculation has increased from £16,000 to £20,300 net assets. Deputies with assets below this threshold are no longer permitted to apply for assessed costs.

The 2025 Guide also clarifies that complex tax returns are now treated as specialist services requiring separate procedures rather than falling within the fixed fee categories.

Costs following P’s death | new clarification

The 2025 Guide provides detailed new guidance on costs procedure following P’s death, representing one of the most significant clarifications in this edition:

      • Deputies do not require a further Court of Protection order to seek SCCO assessment for costs incurred during P’s lifetime.

      • The SCCO has no jurisdiction to assess post-death costs under the COP Rules 2017, as the COP’s substantive jurisdiction ends with P’s death.

      • Deputies may request suspension of assessment and can agree costs directly with personal representatives.

      • The Deputy must inform the SCCO in writing whether an agreement has been reached and whether the bill is to be withdrawn or assessment continued.

      • Clear procedures are set out for handling pending assessments upon P’s death.

The Guide also notes that the SCCO may require evidence of death and of the personal representatives’ authority before proceeding.

Court of Protection payments on account | updated guidance

Section 27.17 of the 2025 Guide provides updated rules on interim payments:

      • Interim bills may be rendered provided that the cumulative total does not exceed 75% of work in progress or 75% of the OPG estimate, whichever is lower.

      • If overpaid, deputies must reimburse P’s estate within 28 days of the final costs certificate being issued.

The Guide confirms that this 75% cap applies cumulatively across all interim invoices, and any excess must be repaid even if caused by later disallowance at assessment.

Provisional assessment procedure | change to offers

There has been an important change to the handling of offers in provisional assessments. Offers must now be filed and clearly marked in the description of the document rather than being submitted in sealed envelopes.

This brings SCCO practice into line with CE-File protocols across the Royal Courts of Justice, eliminating the use of sealed envelopes entirely.

Supreme Court and JCPC assessments | new rules and portal filing

Section 36 of the 2025 Guide has been comprehensively updated to reflect new procedural frameworks:

      • Supreme Court assessments are now governed by the Supreme Court Rules 2024 (previously the 2009 Rules).

      • JCPC assessments are governed by the Judicial Committee (Appellate Jurisdiction) Rules Order 2024, with updated Part 7 (previously Part 6).

      • Bills of costs must now be filed and served via the Supreme Court portal (new mandatory requirement).

      • Points of Dispute must also be filed through the portal, not by email.

      • Updated Practice Direction references include PD 13 paragraphs 13.40–13.42 for extensions and 13.50–13.54 for reviews.

These changes align Supreme Court and JCPC procedure with digital filing obligations now in force across all appellate jurisdictions.

Electronic filing | updated practice direction

References to electronic filing have been updated from Practice Direction 51O to Practice Direction 5C, consolidating the e-filing rules following the conclusion of the pilot scheme.

This aligns the SCCO with the Civil Procedure Rules’ new structure, under which PD 5C now governs all electronic filing in the High Court and SCCO.

Regional Costs Judges | updated appointments

The list of Regional Costs Judges has been substantially revised to reflect appointments, retirements, and reassignments across all circuits.

Notably, District Judge Besford (SiR) has been added for Hull, with further changes in the North Eastern, Northern, Midlands, Wales, South Eastern and Western Circuits. The Guide provides an up-to-date list of authorised judges.

Group listing suspended

The 2025 Guide confirms that group listing remains suspended.
Cases that would previously have been group listed (shorter detailed assessments) are now listed in the same manner as other detailed assessments before a Costs Judge or Deputy Costs Judge.

This position remains under administrative review by the SCCO.

You can download the full 2025 SCCO Guide here.

When Can “Neutral” Defendants Face Costs Orders In Judicial Review?

In Medis Pharma Ltd v NHS Resolution the Administrative Court determined two costs issues arising from a dismissed judicial review of a pharmaceutical list application refusal. First, the court refused the defendant’s application to vary a permission hearing costs order from “costs in the case” to “no order as to costs”, rejecting the defendant’s claim of complete neutrality. Although NHS Resolution indicated it would not actively contest the claim, the court found its Summary Grounds of Resistance had “pushed back” on factual and legal points raised by the claimant, distinguishing it from a truly neutral tribunal-like party entitled to costs protection under R (Davies (No 2) v HM Deputy Coroner for Birmingham [2004] EWCA Civ 207. Second, applying the Denton test via R (Liberty) v SSHD [2018] EWHC 976 (Admin), the court refused relief from sanctions for the claimant’s late-filed skeleton argument (13 days overdue), filed as a fait accompli without seeking extension. The breach was serious, without good reason, and aggravated by improper presentation. The claimant was required to argue from its original Statement of Facts and Grounds. The decision clarifies that defendants claiming neutrality must maintain genuinely non-adversarial conduct to secure costs protection, and reinforces strict compliance with court directions for skeleton arguments in judicial review.