Entries by Toby Moreton

Percentage-Based Costs Order Upheld For Litigation With Mixed Outcomes

In Daniel Family Homes Ltd v Gold, the High Court dismissed an appeal against a trial judge’s costs order requiring each party to pay 50% of the other’s costs following a five-day County Court trial involving possession proceedings and counterclaims. The appellants challenged the order under CPR 44.2, arguing the judge incorrectly estimated that 50% of the respondents’ costs related to their money claim, failed to give sufficient weight to the appellants’ success in defeating a beneficial interest claim, and inadequately considered the respondents’ conduct. Mr Justice Cawson held that appellate courts will only interfere with a trial judge’s costs discretion where a clear error of principle is established, a formidable threshold the appellants failed to meet. The judge was entitled to reject an issue-based costs order in favour of a percentage-based approach reflecting the mixed outcome. She had the advantage of presiding over the trial and assessing how issues unfolded and the parties’ conduct. No presumption exists for summary assessment after a five-day trial. The court would require substantial persuasion to substitute its discretion for that of the trial judge, and the 50/50 order was within the proper exercise of judicial discretion.

When Interlocutory Costs Orders Survive Discontinuance But Underlying Conduct Is Penalised

In MEX Group Worldwide Ltd v Ford & Ors, the High Court determined costs following the discontinuance of proceedings and discharge of a worldwide freezing order obtained under section 25 of the Civil Jurisdiction and Judgments Act 1982. The central issue was whether the claimant MGWL should pay the defendants’ costs under CPR 38.6 despite having proved contempt against them for failing to provide asset disclosure. The WFO had been obtained by material non-disclosure and other defendants had succeeded in having it discharged on that ground and for want of jurisdiction. Freedman J held that MGWL must pay the defendants’ costs as the discontinuing party, but modified the order to reflect the proven contempt. MGWL recovered only 50% of its contempt costs to 13 December 2024 on the standard basis, and nothing thereafter. Existing interim costs orders for unjustified adjournments stood despite the discontinuance. The court refused indemnity costs given the multi-directional nature of the costs orders. The decision demonstrates that discontinuance costs principles prevail even where contempt is proven, particularly where the underlying injunction was wrongly obtained.

Costs Capping Inappropriate Where Unrecovered Costs Shift To Non-Party Tenants

In Spender v F.I.T. Nominee Limited, the Court of Appeal (Lord Justice Birss and Lord Justice Nugee) dismissed an application by 70 tenants for a costs capping order under CPR 52.19 in their appeal concerning service charge reasonableness. The tenants, having succeeded at the First-tier Tribunal but lost in the Upper Tribunal, sought to cap their potential adverse costs liability at £90,000, arguing the risk would stifle their appeal given their modest individual stakes and the inequality of arms with their corporate landlords. The court confirmed the rule was engaged and required consideration of all circumstances, including the parties’ means and the substantial weight of facilitating access to justice, as discussed in Shorts International v Google and Manchester College v Hazel. However, the application was refused due to the interaction with the Landlord and Tenant Act 1985. The court reasoned that costs unrecovered from the appellants above any cap would be recoverable by the landlords as reasonable litigation costs through the service charge from all 436 tenants under section 19, absent a section 20C order (rarely made where landlords succeed). This would unjustly shift the financial risk from the 70 participating tenants to 366 non-participating tenants, inconsistent with justice and the overriding objective.

Dishonest Evidence And Baseless Allegations Justify Indemnity Costs Order

In Clarke v Guardian News & Media Ltd, Mrs Justice Steyn determined consequential costs issues following her judgment of 22 August 2025 dismissing Mr Clarke’s defamation and data protection claims. Applying the general rule under CPR 44.2(2)(a), she ordered the claimant to pay the defendant’s costs, as the defendant was the resoundingly successful party. The court then addressed several reserved costs orders concerning an interim non-disclosure application and an amendment and joinder application. Citing Practice Direction 44, the judge made no further order, meaning these reserved costs fell to be treated as costs in the case, payable by the claimant. On the basis of assessment, the court departed from the standard basis, ordering indemnity costs pursuant to CPR 44.3. This was justified by the claimant’s unreasonable conduct, including advancing a dishonest case and making baseless allegations of conspiracy and dishonesty against witnesses, consistent with the principle in Esure Services Limited v Quarcoo. Finally, applying CPR 44.28 and following Bank St Petersburg PJSC v Arkhangelsky, the court ordered a £3 million payment on account of costs, finding it a reasonable sum and rejecting the claimant’s inability to pay as a good reason to refuse. The application to extend time for an appeal and for a stay of the costs order was refused.

Part 36 Validity, Protocol Breaches And Mediation Timing In Probate Disputes

In Ellis v Ellis & Ors Re: Care (Decd), the High Court determined costs following dismissal of probate and proprietary estoppel challenges. The unsuccessful challenger argued for departure from CPR 44.2 on grounds of the claimant’s pre-action conduct, refusal to mediate, and probate exceptions. The court rejected all grounds. The claimant’s failure to serve a pre-action letter was reasonable where the challenger, despite holding key documents from August 2021, failed to articulate his case for over two years. Refusing mediation until September 2023 was justified where the opponent withheld essential disclosure, including medical records. The probate exceptions were inapplicable: familial expectations did not constitute testator conduct causing litigation (Re Cutcliffe’s Estate), and reasonable investigation had ended by August 2021, with hostile litigation thereafter. The claimant’s Part 36 offer involving estate assets not yet in his possession was valid and genuine, engaging CPR 36.17(4) consequences. The challenger was ordered to pay both the claimant’s costs (standard basis pre-offer, indemnity thereafter with reduced interest) and the neutral executors’ litigation costs, avoiding injustice to the successful party.

Can Defendants Be Ordered To Pay Costs When Fundamental Dishonesty Allegations Fail?

In *Hakmi v East & North Hertfordshire NHS Trust & Anor*, David Pittaway KC, sitting as a Deputy High Court Judge, dismissed the claimant’s clinical negligence claim concerning the failure to administer thrombolysis for a stroke on 16 In Hakmi v East & North Hertfordshire NHS Trust & Anor, the High Court addressed costs consequences where a defendant pursues an unsuccessful allegation of fundamental dishonesty against a claimant who has lost the underlying claim. The claimant, a consultant orthopaedic surgeon, brought a clinical negligence claim for failure to offer thrombolysis following a stroke in November 2016, with agreed quantum of £1,033,824. The claim was dismissed primarily on causation grounds, the court finding that thrombolysis would probably not have altered the claimant’s Modified Rankin Scale outcome of 2. The defendants pursued an allegation under section 57 of the Criminal Justice and Courts Act 2015 that the claimant deliberately underperformed in neuropsychological testing to advance his claim. David Pittaway KC, sitting as a Deputy High Court Judge, rejected the fundamental dishonesty allegation, finding the defendants failed to prove it to the civil standard. On costs, the court ordered the claimant to pay the defendants’ costs (not to be enforced without permission), but also ordered the defendants to pay 15% of the claimant’s costs from 18 March 2025, reflecting the burden imposed by the unsuccessful fundamental dishonesty allegation and rejecting the argument that such an order would give defendants a “free tilt” at raising dishonesty issues.November 2016. The court found no breach of duty by the second defendant’s telemedicine stroke consultant, Dr Metcalf, or the Lister Hospital clinicians, holding that the history-taking and neurological examinations, while imperfectly documented, were not inadequate and that the NIHSS scores did not meet the threshold for thrombolysis. On causation, the judge preferred the defendant’s expert evidence, finding thrombolysis would not have altered the claimant’s outcome, which was a Modified Rankin Scale score of 2. The defendants pursued an allegation of fundamental dishonesty under section 57 of the Criminal Justice and Courts Act 2015, alleging the claimant deliberately underperformed in neuropsychological testing. The judge rejected this, finding the defendants failed to meet the civil standard of proof. On costs, applying CPR 44.2, the judge ordered the claimant, as the unsuccessful party, to pay the defendants’ costs, not to be enforced without the court’s permission. However, recognising the failed fundamental dishonesty allegation, he also ordered the defendants to pay 15% of the claimant’s costs from 18 March 2025, subject to detailed assessment.

Security For Costs | Proportionality And Foreign Enforcement

In Qatar Investment and Projects Development Holding Co & Anor v Phoenix Ancient Art S.A. & Ors, the Court of Appeal granted the claimants’ application for security for their appeal costs but reduced the quantum from £225,000 to £70,000. The appellants—a Swiss company and two individuals resident in Switzerland and New York—appealed against summary judgment granted by Garnham J following disclosure failures. The claimants applied for security under CPR 25.29(1), relying on CPR 25.27(b)(i) (residence abroad), (ii) (Phoenix’s inability to pay), and (vi) (steps taken making enforcement difficult). The court found all three grounds established. It rejected the pre-Brexit rules argument, holding the Civil Procedure (Amendment) Rules 2025 applied. Phoenix was found to be insolvent based on adjusted accounts. The individual appellants had taken steps placing assets beyond reach, including disposing of interests for no consideration and making unexplained payments; their property equity was precarious due to substantial local creditor claims. Ordering security was just and not discriminatory given objectively justified enforcement concerns. However, the claimed costs were disproportionate for a one-day appeal, and costs related to the respondents’ notice were excluded. Security was ordered at £70,000.

Costs Cross-Appeal Fails Where Challenge Arose From Applicant’s Own Default

In Robertson v Google LLC, the Court of Appeal dismissed a costs cross-appeal challenging an order that an applicant for relief from sanctions pay all costs of the application, including costs relating to the respondent’s unsuccessful jurisdictional arguments. Mr Robertson had failed to serve Form N510 when serving his claim form on Google in the USA, invalidating service under CPR 6.34. He applied for relief from sanctions, which the first instance judge granted. Google raised a separate jurisdictional challenge regarding Equality Act claims, which failed. The judge ordered Mr Robertson to pay all costs of the application. On appeal, the Court of Appeal allowed Google’s main appeal, holding CPR 7.6(3) (not CPR 3.9) governed extensions of time for service, rendering the proceedings a nullity. On the costs cross-appeal, the court held the judge had properly exercised his discretion in awarding all costs to Google. Google’s jurisdictional arguments arose from and were causally connected to Mr Robertson’s service failure, forming part of the same dispute. The court emphasized the high threshold for costs appeals established in SCT Finance v Bolton, noting the judge had already made extensive reductions to Google’s claimed costs.

Sanderson Orders Appropriate Where Claimant Aligns With Successful Defendant On Key Issue

In Russian Aircraft Lessor Policy Claims (Consequentials), Mr Justice Butcher determined costs, interest, and permission to appeal following his substantive judgment of 11 June 2025 concerning aircraft lessors’ insurance claims for losses arising from the detention of aircraft in Russia. The court addressed how costs should be apportioned when claimants pursue alternative claims against different insurer groups and one primary case fails. AerCap recovered only 65% of its costs from War Risks Insurers despite winning $1 billion, reflecting that its primary case on the major ‘peril’ issue had failed. The court made Sanderson orders shifting successful All Risks Insurers’ costs to unsuccessful War Risks Insurers, but apportioned differently across claims: 65% in AerCap (where claimant actively supported all risks case) versus 100% in Merx (where claimant supported all risks insurers’ position). On interest, the court confirmed US Prime as the default rate for US dollar awards, rejecting challenges based on inadequately pleaded alternative rates and refusing compound interest absent proper pleading. Permission to appeal was refused. The judgment provides important guidance on costs strategy in multi-party insurance litigation where claimants advance alternative cases against different defendant groups.

Default Costs Certificate Set Aside Due To Unexplained 300% Costs Increase Despite Defective Application

In *Akhtar v Bashir* [2025] EWHC 2218 (SCCO), Deputy Costs Judge Erwin-Jones determined an application to set aside a Default Costs Certificate. The costs arose from a family law order by HHJ Poole requiring the Respondent (H) to pay the Petitioner’s (W) costs from 1 June 2020, to be assessed on the standard basis under Regulation 21 of the Civil Legal Aid (Costs) Regulations 2013. W served a Notice of Commencement in February 2025, setting a 6 March deadline for Points of Dispute. H’s solicitors requested an extension on 5 March, but W’s costs lawyer, lacking instructions, did not agree. A Default Costs Certificate was properly issued on 11 March. H’s application to set it aside, filed on 21 March, initially failed to include draft Points of Dispute as required by Practice Direction 47, paragraph 11.2(3). The judge found H’s explanations for delay—citing funding difficulties and unsubstantiated health issues—unpersuasive and criticised W’s team for acting “only very slightly short of opportunistic” in seeking the certificate without warning. However, the court granted relief, influenced significantly by an unexplained 300% cost increase from a prior N260 statement, which risked diminishing matrimonial assets and warranted a detailed assessment. Applying the principles from *[Denton v White]*, the judge set aside the certificate and permitted H to rely on its late Points of Dispute but made no order as to the costs of the application.