Senior Costs Judge Establishes 25% Markup Cap For Medical Reporting Organisation Fees

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The Senior Courts Costs Office’s decision in JXX v Archibald & Anr [2026] EWHC 630 (SCCO) establishes a new framework for assessing Medical Reporting Organisation fees in personal injury litigation, rejecting both parties’ primary submissions and crafting a novel middle path.

Background

This matter concerned the recoverability of Medical Reporting Organisations fees (MROs) in personal injury litigation. The Senior Costs Judge was required to determine the approach to assessing such fees following the settlement of all other costs in two lead cases: JXX v Archibald & Anr and HLA v LXA & Anr.

In JXX, a reserved judgment was handed down on 17 January 2025. This judgment put the claimant to an election regarding providing further information on medical evidence fees. The claimant chose to provide that information with the agreement of the MRO involved, Medical and Professional Services Limited (MAPS), which was subsequently joined as a Third Party. Given the significance of the issues, an application was made in the related case of HLA for it to be heard concurrently. This was granted, and the MRO in that case, Premex Services Limited (Premex), was also joined as a Third Party. An application by the Association of Medical Reporting Organisations (AMRO) to intervene was refused in July 2025.

By early October and November 2025 respectively, the bills of costs in both the JXX and HLA cases were agreed save for the fees attributable to the MROs. The experts’ own fees were also agreed. Consequently, the hearing between 17 and 20 November 2025 constituted a detailed assessment focused solely on the recoverability and quantum of the MRO fees. The parties, including the third-party MROs, filed 27 witness statements, with half a dozen witnesses cross-examined on behalf of the defendants.

Costs Issues Before the Court

The central issue was how the court should assess the reasonableness of fees charged by an MRO for its services in arranging and administering the procurement of medical expert evidence. The dispute crystallised around two competing legal and evidential approaches.

The first, advocated by the defendants, was based on the county court decision in Stringer v Copley (2002). This approach, sometimes called “the Stringer Cap”, required the receiving party to demonstrate that the MRO’s charges did not exceed the reasonable and proportionate cost of the work if it had been done by the instructing solicitors themselves. This necessitated a detailed breakdown distinguishing the expert’s fee from the MRO’s charges.

The second approach, advanced by the claimants and the MROs, argued that MRO fees should be treated as a disbursement and assessed for reasonableness in amount on a holistic basis, looking at the aggregate invoice. They contended that a retrospective, time-based breakdown was artificial and impossible as MROs do not record time like solicitors. Their model involved applying a percentage markup to the expert’s fee, calculated on a macro, business-wide basis rather than being specific to individual cases.

The court was therefore required to determine: (1) the correct characterisation of MRO fees (as outsourced solicitors’ work or a disbursement); (2) the appropriate legal test for assessing their reasonableness; (3) whether any elements of the fee (such as costs associated with deferred payment or write-off facilities) were irrecoverable as “funding costs”; and (4) if recoverable, how to quantify a reasonable fee.

The Parties’ Positions

The Defendants’ Position: The defendants, represented by Roger Mallalieu KC, argued that the court should follow the approach established in Stringer v Copley and affirmed in subsequent cases such as the Claims Direct Test Cases and CXR v Dome Holdings Ltd. They submitted that MRO fees were only recoverable if shown not to exceed the cost of a solicitor doing the work. This required a clear breakdown separating the expert’s fee from the MRO’s administrative charges. The defendants contended that the claimants had failed to provide sufficient evidence to satisfy this test. They also argued that elements of the MRO fee relating to deferred payment terms and write-off facilities constituted irrecoverable “funding costs” pursuant to the principle in Hunt v R.M. Douglas (Roofing) Ltd. In the absence of a breakdown to excise these irrecoverable elements, the entire MRO fee should be disallowed.

The Claimants’ and MROs’ Position: The claimants and the joined MROs (represented by Benjamin Williams KC, Robert Marven KC and Nicholas Bacon KC) contended that the Stringer approach was flawed. They argued that MRO fees were properly characterised as a disbursement, not outsourced profit costs. The correct test was simply whether the aggregate fee for the medical evidence (expert’s fee plus MRO charge) was reasonable and proportionate. They emphasised the valuable services provided by MROs, including maintaining expert databases, ensuring compliance, and managing administration efficiently. They denied that their commercial terms involved providing “funding”, arguing that deferred payment was an inherent part of the personal injury costs landscape, analogous to a solicitor’s retainer. They submitted that the fees were set by a competitive market and that the court should not engage in an artificial “deconstruction” of a globally priced service. In the absence of evidence from the defendants showing the fees were unreasonable, they should be allowed in full.

The Court’s Decision

Senior Costs Judge Rowley handed down a detailed judgment which departed from both parties’ primary submissions and established a new framework for assessing MRO fees. The significance of the decision lies in its rejection of both the defendants’ Stringer-based approach and the claimants’ holistic aggregate approach, crafting instead a novel percentage-based cap.

Characterisation and Legal Test: The judge held that MRO fees are a disbursement, not outsourced solicitors’ work. This was the fundamental legal holding that distinguished the judgment from previous approaches. Applying the test from Crane v Canons Leisure Centre, which focuses on the nature of the work done (whether it is solicitors’ work) and where responsibility for the work lies, the judge concluded that the work was not “solicitors’ work” in the requisite sense. The work done by MROs was described in Stringer as “administrative work”, which could be carried out by non-fee earning staff. Furthermore, once the expert was chosen, the MRO was left to organise matters until the report was provided, with responsibility for the report’s contents lying with the expert, not the solicitor. Consequently, the Stringer “cap” – requiring a comparison with a hypothetical solicitor’s cost – was not the correct legal test to apply. The court rejected the defendant’s argument that a quasi-solicitor breakdown was necessary because such a breakdown would be vulnerable to the challenge that the work was administrative rather than legal work in any event, and because the responsibility for the work did not lie with the solicitor in the manner described in Crane.

Recoverability of “Funding Costs”: The court rejected the defendant’s argument that deferred payment terms and write-off facilities rendered the fees irrecoverable. It found these were commercial features of the relationship between solicitors and MROs in a market where all participants typically waited for reimbursement until the end of a case. They did not constitute “funding costs” of the type prohibited by Hunt v Douglas Roofing. The judge’s reasoning was strengthened by a comparative analysis: he noted that experts who were instructed directly also effectively deferred payment, and solicitors operating under CFAs similarly delayed receipt of their fees. The purpose of the MRO terms was to provide medical evidence, not to provide credit, even though deferred payment was a byproduct of the agreement. This was entirely different from a disbursement loan from a bank or other litigation funder. The write-off facility was similarly a commercial element of the wider contractual relationship, not a separate service constituting funding. The judge emphasised that the MRO arrangement was consistent with the broader personal injury costs landscape, where staggered payment was an inherent feature affecting all participants.

Assessment of Reasonableness and Quantum: While rejecting the Stringer breakdown, the judge also rejected the claimants’ argument that the court could do no more than accept the aggregate fee as reasonable based on market competition. The evidence demonstrated that MROs applied a percentage markup to the expert’s fee – the judge accepted this evidence from the MROs themselves. Premex charged 35% or 45% for most evidence, and MAPS most commonly charged 53% but also 30%, with outliers ranging from 20% to 104%. However, the judge rejected the argument that these percentages were made reasonable by market competition or that they should be allowed in full between the parties.

The judge found the “tripartite tension” (where the payer is not the service chooser) meant market competition was an imperfect regulator of reasonableness between the parties. Those ultimately paying for the fees had no say in the competition between MROs. The judge also rejected the claimants’ assertion that MROs negotiated discounted rates with experts. The evidence, save for one expert (Professor Cosker) whose testimony the judge did not find convincing on this point, showed that expert fees were consistent regardless of whether instruction came via an MRO or directly from solicitors. In a market where the MRO placed a percentage markup on the expert’s fees, it would be self-defeating to seek to reduce the figure on which the markup would be applied. The MROs’ own evidence therefore showed that their fees inflated the experts’ fees by the percentage markups claimed.

The judge reached the 25% figure by applying a “cautious approach” based on several factors:

(i) limitations in the receiving parties’ evidence;

(ii) the lack of detailed cost analysis from the MROs demonstrating their cost base;

(iii) the tripartite tension which meant market competition was an imperfect regulator of reasonableness between the parties; and

(iv) the variation in percentages (ranging from 30% to 53% generally, with outliers beyond this) which reflected ongoing commercial relationships between solicitors and MROs rather than case-specific factors justifying different rates.

The 10% increase in Premex’s markup during the HLA case suggested later cases were making up for previous shortfalls rather than reflecting current case profitability.

On this basis, the judge held that a markup of 25% on the expert’s fee represented a reasonable amount recoverable between the parties. Any markup claimed below 25% would be allowed as claimed; any claimed above 25% would be reduced to that figure. Importantly, the judge held that this percentage should apply to the entire expert invoice, including disbursements such as expert travel costs, for reasons of simplicity and practicality. As the judge explained, “the percentage mark up is intended to achieve an overall sum” and allowing it only on certain elements would simply justify a higher percentage on those elements.

The judge concluded that this percentage-based approach provided a practical and fair method of quantification, avoiding the disproportionate cost of detailed deconstruction in every case while ensuring paying parties were not liable for unreasonable charges. He suggested that stating this maximum recoverable percentage on future invoices would assist transparency and contrasted this simple disclosure with the impractical “quasi-solicitors’ breakdown” that would not be workable in practice.

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Interpreter Fees Through Related Companies Require No Breakdown Absent Abuse

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The High Court’s decision in Motor Insurers’ Bureau v Santiago [2026] EWHC 513 (KB) addresses whether interpreter fees provided through a company related to the claimant’s solicitors must be broken down to identify recoverable disbursement elements in fixed costs cases.

Background

The respondent, Mr Raphael De Lima Santiago, sustained injuries in a motorcycle accident on 22 May 2018 involving an uninsured driver. Consequently, the Motor Insurers’ Bureau (MIB) was joined as second defendant to the claim. The substantive claim settled on the first day of trial for £20,000 plus costs, with the case falling under the fixed recoverable costs regime.

Mr Santiago required Portuguese interpretation services. His solicitors, Bond Turner, served a costs schedule dated 8 August 2022 claiming £924 for an interpreter’s fee at trial. The supporting invoice was issued by Professional and Legal Services Ltd (PALS), a company related to Bond Turner. On provisional assessment, the MIB contended that interpreter fees were not recoverable as a disbursement under the then applicable CPR 45.29I. A Deputy District Judge accepted this argument. The claimant successfully appealed this point directly to the Court of Appeal, which held that an interpreter’s fee was a recoverable disbursement. The matter was then remitted to His Honour Judge Dight, the Designated Civil Judge for London, to assess the quantum of that fee.

Before Judge Dight, the MIB argued that the PALS invoice likely contained an irrecoverable agency or profit element and sought a breakdown. The claimant resisted providing a breakdown, maintaining the fee was reasonable. Judge Dight, in a reserved judgment dated 21 February 2025, assessed the recoverable fee at £794.40 (being £662 plus VAT). The MIB appealed that assessment, and permission was granted by Sir Stephen Stewart on 4 August 2025.

Costs Issues Before the Court

The appeal concerned the correct approach to assessing a disbursement for interpreter services within a fixed costs case. The central issues were: first, whether the receiving party was required to provide a detailed breakdown of an invoice from a service provider company (particularly one related to the solicitors) to identify and potentially strip out any agency fee or outsourced profit cost; second, whether, in the absence of such a breakdown, the fee should be assessed at nil; third, whether the Judge’s methodology for assessing a reasonable and proportionate fee was erroneous in law.

The Parties’ Positions

The appellant, the MIB, represented by Mr Robert Marven KC, advanced three principal arguments. First, it submitted that the element of the fee retained by PALS was irrecoverable in principle, being characterised as a disguised solicitors’ profit cost or an impermissible agency fee outside the fixed costs regime. A breakdown was therefore essential to identify what could be recovered. Second, it argued that a breakdown was necessary as a matter of procedural fairness to enable a proper assessment. Third, it contended that the Judge’s assessed figure of £794.40 was too high, suggesting a lower figure should have been applied, potentially aligned with the evidence of an interpreter’s direct fee of £300.

The respondent, Mr Santiago, represented by Mr Benjamin Williams KC, opposed the appeal. He submitted there was no general rule requiring a breakdown of a disbursement invoice. He argued that the fee for interpretation services, provided via a company, was a proper disbursement, drawing an analogy with fees charged by expert consultancies. He maintained that the Judge had all necessary evidence to assess reasonableness and that his conclusion was within the range of his legitimate discretion.

The Court’s Decision

Mr Justice Moody dismissed the appeal. On the first issue, the court rejected the argument that a breakdown was required as a matter of principle to separate an agency component. It approved the distinction from Crane v Cannons Leisure Centre that a disbursement is characterised by work for which the solicitor does not bear personal responsibility to the client. Interpretation services fell into this category. The court held there was nothing wrong with such services being provided via a company, noting potential advantages such as providing cover for illness or a range of interpreters of differing levels of expertise and experience. The fact that PALS and Bond Turner were related did not of itself render the arrangement unlawful or necessitate a breakdown. The court noted that the Legal Services Act 2007 expressly permits procuring services from a related company. The analogy with an expert report from a consultancy firm was considered helpful; the full fee charged would be a disbursement without needing to dissect the expert’s internal remuneration.

The court acknowledged that there may be cases where a breakdown is needed to investigate abuse or establish reasonableness. The court noted that its attention had been drawn to County Court cases requiring breakdowns for medical agency invoices and to commentary in Cook on Costs that deprecated that practice. However, the court held there was no rule of law or practice that requires a breakdown in every case where a litigation service is provided through a company. On the facts, the evidence before the Judge provided sufficient information for the assessment. This included Mr Dean’s evidence that the specific interpreter, Mr Alvarenga, would charge £300 directly, and Mr Ryder’s evidence of alternative quotes for interpreter services. With this information, no breakdown was required and the fee was not to be assessed at nil.

On the second issue, the court found no error in the Judge’s assessment of a reasonable and proportionate fee. The Judge had correctly directed himself by reference to CPR 44.3 and the market-based approach endorsed in Callery v Gray. His decision to take the mean of the quoted figures provided by the claimant’s costs draftsman was an evaluative judgment reached by an experienced judge who would himself have conducted summary assessments after trials in London including claims for interpreters’ charges. The appeal court emphasised that this was a paradigm case for appellate restraint and would not interfere with the first-instance judge’s assessment.

Accordingly, the Judge’s assessment of £794.40 was upheld and the appeal dismissed.

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

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The High Court’s decision in Moller & Ors v One Touch Solution Ltd (in creditors’ voluntary liquidation) & Anor [2026] EWHC 14 (Comm) confirms that a company in liquidation can recover VAT on post-liquidation legal services via Regulation 111(5) of the VAT Regulations 1995, meaning the paying party is not liable for VAT where the receiving party has suffered no loss.

Background

This case concerned a claim brought against One Touch Solution Limited (in creditors’ voluntary liquidation) and its insurer, Hiscox Insurance Company Limited, under the Third Parties (Rights Against Insurers) Act 2010. The substantive details of the underlying claim are not material to the costs issue determined. Procedurally, the claimants were granted permission to amend their Particulars of Claim by an order of Dias J dated 30 July 2024. As a consequence of that amendment, the judge ordered that the claimants pay the first defendant’s reasonable costs of amending its defence, to be assessed if not agreed [§1].

The parties were unable to agree on the quantum of those costs. At a subsequent hearing on 10 December 2025, the court conducted a summary assessment of those costs, assessing them net of VAT in the sum of £25,000 [§2]. However, a dispute arose between the parties regarding the recoverability of VAT on those costs. This issue was not resolved at the hearing. Instead, the court directed that the parties file written submissions on the VAT point for a determination to be made on the papers [§2].

Costs Issues Before the Court

The court was required to determine two discrete costs issues arising from the hearing on 10 December 2025.

The primary issue was whether the defendants were entitled to recover VAT on the £25,000 of costs awarded for the amended defence. This issue turned on the VAT status of the first defendant, which was in creditors’ voluntary liquidation, and the position of its insurer, the second defendant.

The secondary issue was whether the claimants were entitled to their costs of preparing the written submissions on the VAT point, which they quantified at £1,000 (excluding VAT) [§9].

The Parties’ Positions

The Defendants’ Position: The defendants argued that neither defendant could recover VAT on the costs. They noted that the first defendant entered creditors’ voluntary liquidation on 28 March 2024, and the liability for the legal work subject to the costs order arose after that date [§4]. They contended that the first defendant, being in liquidation, “can neither pay nor recover VAT” [§4]. They further argued that the second defendant (the insurer) could not recover the VAT it had paid because the tax related to a legal service supplied to the insured (the first defendant) [§5]. In support, they cited a passage from Friston on Costs (4th Ed) at [55.37], which states that the ability of the insured party to recover input tax is the relevant factor, not the ability of an insurer funding the litigation. The passage notes that input tax cannot be claimed “by the back door” [§5].

The Claimants’ Position: The claimants contended that the liquidation of the first defendant did not automatically preclude the recovery of VAT [§6]. They relied on Regulation 111(5) of the Value Added Tax Regulations 1995, which provides a mechanism for a person who has ceased to be a taxable person (e.g., due to deregistration following liquidation) to reclaim VAT on services supplied after deregistration, provided those services are attributable to taxable supplies made when the person was registered [§6]. They argued that the first defendant’s estate, through its liquidators, could therefore recover the VAT. On the secondary issue, the claimants sought their costs of £1,000 for preparing the written submissions, arguing they were the successful party on the VAT point and that the issue could have been resolved at the earlier hearing to avoid further expense [§9].

The Court’s Decision

The court ruled in favour of the claimants on both issues.

On the primary VAT issue, the court accepted the defendants’ starting point, as supported by Friston on Costs, that the relevant consideration was the ability of the insured (the first defendant) to recover VAT, not the insurer [§7]. However, the court found that the defendants’ assertion that the first defendant could not recover VAT due to its liquidation was incorrect in law. The court emphasised that Regulation 111(5) of the VAT Regulations 1995 provided “clear support” for the recovery of VAT by the estate of the first defendant, via the liquidators, even though the company was no longer VAT registered [§7]. The court noted that the defendants’ assertion “flies in the face of this Regulation and is unexplained” [§7].

The court further observed that it could “rely on the liquidators of the First Defendant to discharge their duties by filing appropriate VAT returns to recover the sum” [§8]. Consequently, the court held that the first defendant’s estate could recover VAT on the relevant legal services. As neither defendant had suffered a loss in the amount of the VAT, that sum could not be included in the costs payable by the claimants [§8].

On the secondary issue regarding the costs of the written submissions, the court awarded the claimants the £1,000 sought [§11]. The court noted that it had not heard submissions from the defendants on this issue [§10]. Applying the general principle under CPR Part 44 that the unsuccessful party should pay the costs of the issue, the court found the claimants were the “clear winners” on the VAT point [§10.1]. It also held that the sum claimed was reasonable and proportionate, resolving any doubt in favour of the defendants as the paying party [§10.2]. The order was made subject to a provision allowing the defendants to apply in writing to set aside or vary the order, with a corresponding right for the claimants to respond. The court indicated any such applications and responses should be concise, with costs kept to a modest level [§11].

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Court Of Appeal Confirms That Pre-Action Applications Constitute ‘Proceedings’ for Costs Purposes”

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The Court of Appeal’s decision in Gotti v Perrett [2025] EWCA Civ 1168 establishes that all pre-action applications constitute “proceedings” for costs purposes, closing a potential loophole across civil litigation.

Background

The dispute originated from an application for an interim injunction made by the Appellant, Christian Gotti, against the Respondent, Karen Perrett, under the Protection from Harassment Act 1997. The application was issued at Worcester County Court on 4 July 2023 using Form N16A, the general application form for an injunction under CPR Part 23. The application was listed for a contested hearing on 3 August 2023, where the Appellant was represented by counsel and the Respondent appeared in person. Following the hearing, an interim injunction was granted.

The injunction order contained significant procedural defects. No undertaking was given by the Appellant to issue a claim form, as required by the then-in-force CPR PD25A, paragraph 4.4(1). The court also failed to give directions for the issue of a claim form. Furthermore, no cross-undertaking in damages was offered by the Appellant or recorded in the order, despite the Respondent’s evidence that she would suffer financial loss. A penal notice was included on the face of the order. No claim form was ever issued by the Appellant.

The application was later acknowledged by the Appellant himself to be “deeply misconceived” [§20, §26] for multiple reasons: the county court lacked jurisdiction for defamation claims; interim injunctions are unavailable in defamation where the defendant seeks to defend; the PfHA 1997 lacked jurisdiction as the Appellant lived in Scotland; and Article 10 ECHR issues were not addressed.

On 27 February 2024, the Respondent issued an application to discharge the injunction and for damages and costs. Upon receipt of this application, the Appellant performed what the Court described as a “spectacular volte face” [§25], conceded that his application for the injunction was “deeply misconceived” and accepted that the order should never have been granted. He consented to its immediate discharge. However, he argued that as no Part 7 or Part 8 claim form had ever been issued, there were no valid “proceedings” before the court. Consequently, he contended that the court had no jurisdiction to make orders for costs or damages in favour of the Respondent.

Costs Issues Before the Court

The central costs issue was whether the court possessed the jurisdiction to make ancillary orders for costs and damages upon the discharge of an injunction where: (i) no undertaking to issue a claim form was given or recorded; (ii) no cross-undertaking in damages was offered or recorded; and (iii) no claim form was ever subsequently issued. The Appellant’s position was that the absence of a substantive claim form meant the injunction application was a “nullity” and that no “proceedings” existed in which the court could exercise its powers.

A secondary issue was whether, if the court found there were no valid proceedings, it could invoke CPR rule 3.10 to remedy the procedural error of using Form N16A instead of the required Part 8 Claim Form (N208) for a claim under the Protection from Harassment Act 1997.

The Parties’ Positions

The Appellant’s Position: The Appellant argued that the court had no jurisdiction. He submitted that “proceedings” are started only when the court issues a claim form at the request of a claimant, pursuant to CPR rule 7.2(1). As no Part 7 or Part 8 claim form was ever issued, there were no proceedings. He contended that the use of Form N16A did not constitute a prescribed originating process for this type of claim and that the entire process was therefore a nullity. He relied on authorities such as Citation plc v Ellis and Peterson v Howard de Walden Estates Ltd to support the proposition that costs cannot be awarded without a claim form. He further argued that CPR rule 3.10 could not be used to correct a procedural error that occurred before the commencement of any proceedings.

The Respondent’s Position: The Respondent argued that the court did have jurisdiction. She contended that the application for an interim injunction, properly issued under CPR Parts 23 and 25, constituted “proceedings” to which the Civil Procedure Rules applied. She relied on the equitable jurisdiction of the court to grant injunctions, as confirmed in Fourie v Le Roux, and the wide interpretation of “proceedings” in section 147 of the County Courts Act 1984, which “includes both actions and matters.” She also pointed to the court’s costs jurisdiction under section 51 of the Senior Courts Act 1981, which applies to “costs of and incidental to all proceedings.” In the alternative, she argued that the error in using the wrong form could and should be remedied under CPR rule 3.10, citing authorities such as Hannigan v Hannigan and Reddy v General Medical Council.

The Court’s Decision

The Court of Appeal dismissed the appeal, upholding the decisions of the courts below. Both Lewison LJ (in granting permission) and HHJ Salmon described the Appellant’s argument as “an affront to common sense” [§5-6]. Lord Justice Cobb, giving the lead judgment, held that the application for an interim injunction constituted “proceedings” within the meaning of the relevant statutes and rules. The court’s reasoning was based on several key points.

    • First, the court was exercising a statutory and equitable jurisdiction under section 38 of the County Courts Act 1984 when it granted the injunction. This power exists in “any proceedings,” a term which is not restricted to post-claim-form activity. The court endorsed the view that “proceedings” include any application with which the court is seised and in respect of which it is asked to make orders. The fact that the application was procedurally flawed and “deeply misconceived” did not mean it was a nullity; it simply meant the proceedings were brought in an inappropriate form.
    • Second, the court’s costs jurisdiction under section 51 of the Senior Courts Act 1981 applies to “all proceedings,” which must be given the same wide interpretation. Civil courts routinely make costs orders on pre-action interim injunction applications.
    • Third, disapplying the CPR and the overriding objective to a pre-action injunction application would be absurd, as such applications can have draconian consequences for respondents and must be dealt with justly. The Appellant’s concession that the court had jurisdiction to make and subsequently discharge the injunction was found to be inconsistent with his argument that the process was a nullity.

The court relied heavily on Lord Scott’s judgment in Fourie v Le Roux [2007] UKHL 1, which established that pre-action freezing orders are “not a nullity” and have “immediate effect” even without substantive proceedings [§58].

On the secondary issue, the court held that, if necessary, CPR rule 3.10 could be invoked to remedy the error of using Form N16A instead of Form N208. The error was one of procedure after proceedings had commenced, and it could be corrected to prevent the Appellant from benefiting from his own failure and to further the overriding objective. The case of Peterson was distinguished, as it concerned an error occurring before any proceedings were commenced.

In conclusion, the court found that the judges below were correct. The court had jurisdiction to make orders ancillary to the discharge of the injunction, including orders for costs and damages. The appeal was dismissed.

Wider implications beyond injunctions for costs jurisdiction in civil litigation

1. Pre-action applications generally The principle that “proceedings” under s.51 SCA 1981 encompasses any application where the court is asked to exercise jurisdiction extends to all pre-action remedies, not just injunctions. This would cover:

    • Pre-action disclosure applications (CPR r.31.16)
    • Norwich Pharmacal orders
    • Pre-action inspection orders
    • Any application under CPR Part 23 before a claim form

2. Procedurally defective proceedings The ruling that procedural errors don’t negate costs jurisdiction applies broadly. If parties commence any type of application using the wrong form or procedure, they cannot later rely on their own error to escape costs consequences. This prevents tactical exploitation of procedural mistakes across all litigation contexts.

3. Defining “proceedings” for costs purposes The Court’s expansive interpretation of “proceedings” – as any matter where the court is “seised” and asked to make orders [§69] – affects costs jurisdiction throughout the CPR. This could impact:

    • Costs in struck-out claims
    • Discontinued proceedings
    • Applications dismissed for procedural non-compliance
    • Stand-alone applications without underlying claims

4. CPR r.3.10 application The liberal approach to remedying procedural errors under CPR r.3.10 has implications for all litigation where the wrong form or process is used, confirming courts will prevent parties benefiting from their own procedural failures.

5. Section 51 jurisdiction The confirmation that s.51 SCA 1981 costs jurisdiction applies to “all proceedings” reinforces the court’s broad discretion over costs in any matter before it, strengthening the principle that costs follow the event regardless of procedural irregularities.

This decision essentially closes a potential loophole across civil litigation where parties might attempt to avoid costs liability through procedural technicalities.

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Background

These proceedings concerned the assessment of costs arising from the British Steel Coke Oven Workers Litigation, a substantial body of claims brought by workers (or their estates) against Tata Steel UK Ltd and its predecessors. The claims, which began in 2012, related to respiratory diseases and skin cancer allegedly caused by exposure to emissions at coke oven plants. Following an application in 2015, a Group Litigation Order was made in 2017 by Senior Master Fontaine.

The litigation involved over 200 claimants represented by two firms of solicitors – Hugh James and Irwin Mitchell – in roughly a 3:1 proportion. The GLO proceedings continued until 2022, when an order was made for the claimants to pursue their claims through an agreed scheme. All claims were concluded by 2024 for an aggregate sum of approximately £3.5 million.

The common costs up to the implementation of the scheme had been agreed at £8.5 million, with further common costs from 2022 to 2024 remaining unresolved. To address the individual costs of claimants efficiently, the parties selected 20 sample claimants (12 from Hugh James and 8 from Irwin Mitchell) with the intention that court decisions on these cases could be extrapolated to all claimants. Based on the sample bills, the defendant calculated that individual costs across all claimants might total £8 million.

On 7 February 2025, the court made directions for the determination of four preliminary issues, with provision for detailed line-by-line assessment of four sample bills at a later date. The hearing of the preliminary issues took place over three days in April 2025 before Senior Costs Judge Rowley.

Costs Issues Before the Court

The court was required to determine four preliminary issues agreed between the parties:

    • First, the appropriate hourly rates for the solicitors’ work on individual costs. Both firms claimed identical rates that remained unchanged throughout the 12-year period of the litigation, with Grade A at £315, Grade B at £278, Grade C at £233, and Grade D at £147. The defendant offered significantly lower rates of £261, £218, £178, and £126 respectively.
    • Second, the recoverability of costs for obtaining evidence from co-workers. This issue arose particularly in Hugh James bills, where substantial time was claimed for taking witness statements from colleagues of the claimants. The defendant initially challenged whether such work constituted individual costs or common costs (which had already been agreed), before shifting to argue about the extent rather than the principle of such work.
    • Third, the recoverability of probate costs. Approximately half the test cases included claims for obtaining grants of probate or letters of administration, with profit costs ranging from nil to just under £2,000 and disbursements from £10 to £655. The defendant challenged whether these costs were properly recoverable in the litigation.
    • Fourth, the recoverability of items claimed as “MailMerge” by Hugh James. These comprised 223 items totalling 22.2 hours across the 12 Hugh James claimants. The defendant contended these represented automated correspondence that should be treated as common costs.

Additionally, the court was asked to consider the proper categorisation of costs as individual or common costs, as defined in the GLO. Individual costs were those “incurred in respect of any individual claimant in relation to matters which are personal to that claimant”, whilst common costs were “all costs other than Individual Costs”.

The Parties’ Positions

On hourly rates, the claimants argued that the rates claimed were justified by reference to the seven factors in CPR 44.4. They emphasised the complexity of longtail industrial disease litigation, the specialist expertise required, and the value of the claims (averaging £87,000 on their calculation). They relied on Master McCloud’s 2019 summary assessment where similar rates had been allowed. The claimants also criticised the defendant’s conduct in requiring individual proof of each claim despite the GLO framework.

The defendant contended for lower rates based on the 2021 Guideline Hourly Rates, arguing these already incorporated an enhancement from the 2010 rates. They emphasised that the 2022 scheme had streamlined the claims process, reducing complexity. The defendant argued that the global settlement value of £3.5 million (with individual claims ranging from £3,700 to £31,000) indicated lower value claims requiring lower rates. They also suggested that common costs work might justify higher rates than individual costs work.

Regarding co-worker evidence, the claimants maintained that witness statements were necessary to prove individual claims, particularly for the 15 deceased workers among the 20 sample cases. They argued that the defendant’s own position, as expressed in Matthew Harrington’s witness statement, required individual proof of exposure for each claimant, making co-worker evidence essential for individual costs.

The defendant’s position evolved from initially challenging all co-worker evidence as common costs to accepting the principle but questioning the extent. They argued that general evidence about plant conditions should be treated as common rather than individual costs, particularly given the disparity between Hugh James and Irwin Mitchell’s approaches.

On probate costs, the claimants argued that where grants were obtained exclusively for litigation purposes, the reasonable costs were recoverable. They provided witness evidence detailing estate sizes and explaining why grants would not otherwise have been required. The defendant relied on Mosson v Spousal (London) Ltd, arguing that probate costs could not be recovered as damages and questioning how claimants could prove grants were obtained exclusively for litigation.

For MailMerge items, Hugh James explained these were not fully automated letters but required individual “topping and tailing”. They claimed these at 2 minutes per item rather than the standard 6 minutes for routine correspondence. The defendant maintained these were archetypal common costs, being standardised correspondence to groups of claimants using Microsoft Word’s mail merge feature.

The Court’s Decision

Senior Costs Judge Rowley allowed the hourly rates as claimed. He rejected the defendant’s argument that the 2022 scheme had simplified these cases, finding that claimants still needed to prove duty, breach, and causation individually. The judge concluded that “these claims were no different from claims which were regularly brought by firms instructed by trades unions against large manufacturing employers on behalf of their individual members.”

The judge found no justification for different rates between common and individual costs work, noting that the defendant’s own solicitors charged the same rates for both types of work. He considered the claims to have “all the complexity of longtail disease litigation” and that the specialist expertise of Grade C and D fee earners who conducted most of the work justified the rates claimed.

On co-worker evidence, the judge found entirely in favour of the claimants. He held that evidence supporting deceased claimants’ cases was properly categorised as individual costs, even if it might have secondary benefits for other claims. The judge stated: “The primary purpose of the evidence was to provide sufficient information for the individual claimant to be able to establish the breach of duty and the damage caused. That should be sufficient for it to be claimed as individual costs.”

The judge rejected any attempt to apportion co-worker evidence between individual and common costs, finding such division would be impractical and inappropriate. He specifically referenced the example of David Ferris’s witness statement, which was originally produced for his own claim but later amended to support another estate’s claim, illustrating the difficulty of any meaningful apportionment.

Regarding probate costs, the judge established that these were recoverable where grants were obtained for litigation purposes. He set a relatively low evidential threshold, stating: “If the personal representative or administrator attended court on the assessment of their costs, it would require no more than their confirmation that the grant had been obtained for the litigation for the costs of so doing to be allowed in principle.” The detailed witness evidence provided by the solicitors was found more than sufficient to establish these claims.

On the MailMerge issue, the judge accepted Hugh James’s explanation that these were not fully automated letters. He approved the two-minute charging approach, previously endorsed by Nelson J in Giambrone v JMC Holidays Ltd, as “a reasonable approach to picking up the time on the individual case without claiming full routine letters.” This allowed recovery as individual costs whilst recognising the partially standardised nature of the correspondence.

The judge declined to make definitive rulings on the specific categorisation challenges in the Bennett and Dawson cases, providing only provisional indications given the limited submissions made. These matters were left for determination at the subsequent detailed assessment hearings.

The Unseen Expert | Can You Recover The Costs Of A Report You Didn’t Serve?

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In the complex world of civil litigation, instructing expert witnesses is a common and often necessary step. Experts provide vital opinions on technical, medical, or other specialist matters that lie outside the knowledge of the judge. But what happens when you instruct an expert, pay their fee, receive their report, and then, for whatever reason, decide not to serve it on the other side or rely on it in court? Can you still recover those costs from the losing party?

This is a frequent dilemma in costs assessment, and the answer, particularly on the standard basis, is far from straightforward. It highlights a key tension between the reasonableness of a decision made at the time and the proportionality of the cost viewed retrospectively.

Drawing on the principles under the Civil Procedure Rules (CPR), we explore the recoverability of costs incurred for expert reports that remain “unseen” by the court and the opponent.

The Starting Point: Standard Basis Assessment

When a court orders one party to pay the costs of another, these costs are usually assessed on the standard basis. CPR 44.3(2) sets out the core test: the court will only allow costs that are:

    1. Reasonably incurred: Was it a reasonable step to incur the cost at the time?
    2. Reasonable in amount: Was the sum paid for the work reasonable?
    3. Proportionate to the matters in issue: Does the cost bear a reasonable relationship to the value, complexity, and other factors of the case (as outlined in CPR 44.3(5))?

Crucially, under the modern standard basis, proportionality can override reasonableness. CPR 44.3(2)(a) states that “Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred.”

Furthermore, the burden of proof is on the party seeking to recover the costs (the receiving party) to demonstrate that they meet these tests. And, importantly, if the court has any doubt about whether the costs were reasonably and proportionately incurred or were reasonable and proportionate in amount, that doubt must be resolved in favour of the paying party (CPR 44.3(2)(b)). This is a significant hurdle compared to the indemnity basis where doubt favours the receiving party.

Hurdle 1: Was it Reasonable to Instruct the Expert at the Time? (The Francis Principle)

The first question is whether the decision to instruct the expert was reasonable when that decision was made. A key principle here comes from cases like Francis v Francis & Dickerson, which establishes that the reasonableness of incurring a cost is assessed based on the circumstances and knowledge reasonably available at the time, not with the benefit of hindsight.

So, if based on the information you had (the pleaded case, client instructions, available evidence), it was reasonable for a competent solicitor to believe that expert evidence was potentially required to investigate or support a relevant issue in the case, the cost of obtaining that initial report might be considered reasonably incurred under this test. The fact that the report ultimately didn’t help your case, or the issue it related to was dropped, doesn’t automatically make the initial decision unreasonable.

The court will look at factors like:

      • The nature and complexity of the issues requiring expert input.
      • The apparent need for specialist knowledge at that stage.
      • The suitability of the chosen expert.

Contemporaneous records (attendance notes, letters of instruction) justifying the instruction are vital here.

Hurdle 2: Is the Cost Proportionate Given the Outcome? (The CPR 44.3(5) Test)

Even if instructing the expert was deemed reasonable at the time (passing the Francis test), the cost must also be proportionate. This is where the fact that the report was not served or used becomes a major issue.

Proportionality is assessed by looking at the cost in relation to:

      • The sums in issue in the proceedings.
      • The value of any non-monetary relief.
      • The complexity of the litigation.
      • Any additional work caused by the opponent’s conduct.
      • Any wider factors.

The paying party will argue, often persuasively, that a cost incurred on an expert report that provided no positive contribution to your case, was not used to advance your arguments, and did not assist in resolving the dispute, cannot be considered a proportionate expense to recover from them. While the Francis principle discourages hindsight for reasonableness, hindsight is very much applied when assessing proportionality against the ultimate context and outcome of the case.

The lack of utility of the unserved report weighs heavily against its proportionality, regardless of how reasonable the decision to instruct was initially. It’s hard to argue that a cost which yielded no benefit to the successful prosecution (or defence) of the claim bears a “reasonable relationship” to the CPR 44.3(5) factors when viewed at the end of the case.

The Role of CPR Part 35

CPR Part 35 governs expert evidence. While you need the court’s permission to rely on expert evidence (CPR 35.4), you don’t necessarily need permission to instruct an expert for advice or investigation. The recoverability issue primarily falls under CPR 44, not whether CPR 35 permission was obtained (as permission wouldn’t be sought for an unserved report). However, CPR 35.4(4) does give the court the power to limit the recoverable amount of expert fees, which, if exercised, would cap recovery regardless of proportionality.

The Impact of Costs Budgeting

If the case was subject to costs management under CPR 3, the existence (or absence) of an approved budget covering the expert’s fee is critical.

If the cost for instructing this expert was included within an approved phase of your costs budget, CPR 3.18 states that the court will not depart from that approved budget amount unless there is “good reason” to do so. This provides a strong presumption of recoverability for budgeted items, shifting the burden onto the paying party to show a “good reason” why the budgeted amount should not be allowed.

Conversely, if the expert fee was not budgeted for, or significantly exceeded the budgeted amount without approval, recovery becomes extremely difficult on the standard basis.

Practical Considerations for Recovery

To maximise the chances of recovering costs for an unserved expert report:

      • Document Everything: Keep clear records showing why the expert was instructed at the time, based on the information available then.
      • Justify the Need & Choice: Be prepared to explain the complexity of the issue requiring expert input and the suitability/reasonableness of the chosen expert and their fee.
      • Address Proportionality: Acknowledge that the report wasn’t used but argue why the cost remains proportionate in the context of the overall case, perhaps emphasizing the complexity of the issue even if the report didn’t provide the hoped-for answer.
      • Rely on the Budget: If the cost was within an approved budget, this is your strongest point.

The paying party will inevitably focus on the lack of utility and the proportionality argument, asking: why should we pay for an expensive report that didn’t even help your case?

Conclusion

Recovering the costs of an expert report that was instructed but ultimately not served on the standard basis is an uphill battle. While the initial decision to instruct the expert might satisfy the Francis test of reasonableness (judged at the time), the modern proportionality test under CPR 44.3 is a significant hurdle.

The fact that the report provided no positive contribution to the litigation process makes it vulnerable to challenge as being disproportionate to the overall value, complexity, and outcome of the case.

Your best prospect of recovery, assuming the initial instruction was genuinely reasonable, lies in demonstrating that the cost was included within a court-approved costs budget, triggering the protection offered by CPR 3.18. Without budget approval, you must persuade the court that, despite its lack of use, the cost remains proportionate in the broader context of the litigation – a difficult argument against an opponent keen to resolve doubt in their favour.

Navigating these issues requires a detailed understanding of costs principles and persuasive advocacy at assessment.

Interpreter’s Fee Of £924 Deemed Recoverable Under The RTA Protocol But Disproportionate To £20,000 Settlement | Reduced To £794.40

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This case involved a determination regarding the quantum of a specific disbursement in the claim between Raphael De Lima Santiago (the Claimant) and the Motor Insurance Bureau (the Defendant). The procedural journey began when the Claimant, a Brazilian national whose first language is Portuguese, was involved in a road traffic accident on 22 May 2018 while working as a delivery driver in London. The accident, involving a Honda motorcycle driven by him and a scooter driven by Mr Joshua Odubolo, led to the motorcycle being deemed uneconomical to repair. Subsequently, the Claimant’s legal action included a claim for the cost of hiring a replacement motorcycle, amounting to over £46,000. The claim was initiated through the Road Traffic Accident (RTA) Protocol and filed at the County Court Money Claims Centre on 17 May 2021, a day before the expiration of the limitation period. Mr Odubolo did not mount a defense, leading to the Motor Insurers’ Bureau (MIB) being involved as a second defendant due to uncertainties regarding Mr Odubolo’s insurance status. The claim proceeded to trial at the County Court after being allocated to the Fast Track. The Claimant’s witness statement, originally in Portuguese, was translated into English by Bond Turner Solicitors, who also booked an independent interpreter for trial compliance. This direction was necessitated by the court’s conditions, precluding the use of internal translators from the Claimant’s solicitors at trial. On the day of trial, 11 August 2022, the case settled, with the MIB agreeing to pay £20,000 and the Claimant’s costs summarily assessed at £13,746.03. However, the Deputy District Judge Sneddon excluded the Interpreter’s Fee, citing CPR 45.29I(h) and relying on the Court of Appeal’s decision in Cham (A Child) v Aldred. Permission to appeal was granted, leading the matter to the Court of Appeal, which focused on the interpreter’s fee recoverability as a necessary disbursement due to the access to justice principle outlined in the overriding objective and Practice Direction 1A. The Court of Appeal, in its decision dated 14 July 2023, remitted the case for further determination of the reasonableness and proportionality of the interpreter’s fee quantified at £924. The court’s directions included guidelines for the defendant to challenge the fee if necessary within a given timeframe. The case was remitted to the court court and came before HHJ Dight CBE on 6 September 2024. Judgment was handed down on 21 February 2025.

Costs Issues Before the Court

The primary costs issue before the court was the assessment of the interpreter’s fee under CPR 45.29I(h). Following a remittance by the Court of Appeal to consider this disbursement, the central question was whether the fee for instructing an interpreter at the trial of the claim, claimed at £924 including VAT, was proportionate and reasonable. The Defendant’s contention included an alleged failure by the Claimant to provide a breakdown of the fee, suggesting the court either assess the fee at nil or reduce it to £300, drawing on the market rate for such services. The considerations also involved whether any part of the fee constituted an irrecoverable agency element, and if so, the impact of such an element on the recoverability of the total fee.

The Parties’ Positions

The Claimant, represented by Ben Williams KC, maintained that the interpreter’s fee, although involving an intermediary service provider, was a reasonable and proportionate fee within market standards. They argued that the booking was necessitated by the professional service context, and thus, a higher fee encompassing operational costs of the service provider was inevitable. The Claimant supplied comparable market quotations to substantiate their position, indicating the fee fell within a typical range and emphasising that any reduction should still recognise a reasonable market cost. Contrarily, the Defendant, through Robert Marven KC, contended the fee was unreasonably inflated and included an agency component that should not be recoverable under CPR 45.29I(h), referencing Crane v Canons Leisure Centre. They stressed the need for transparency, urging the court to compel disclosure of the fee breakdown, and argued for a reduction to a minimal sum of £300, aligned with direct bookings from public registers of interpreters at standard flat rates.

The Court’s Decision

His Hon Judge Dight CBE held that the interpreter’s fee was indeed a recoverable disbursement under CPR 45.29I(h). The Judge, after a meticulous analysis, rejected the argument that the fee should include an irrecoverable agency component when sourced through an intermediary. It was acknowledged that market practices for obtaining professional services often involve such intermediary costs, and the fee should be judged against prevailing market rates. The Court referenced the competitive market context for such services, drawing on data provided by the Claimant’s costs draftsman, Mr Neil Ryder, which showed a reasonable range of fees from similar service providers. The decision also took into account the proportionality rule under CPR 44.3, considering the entirety of the claim. The Judge held that the £924 fee was at the high end of the market range and was not proportionate to the claim’s settlement value and should be adjusted. Consequently, he determined an adjusted reasonable fee would be £662 plus VAT, totalling £794.40, thereby ensuring the fee was fair, reasonable and aligned with the proportionality bounds in relation to the claim’s overall value.

Medical Reporting Agencies | Burden Upon The Claimant To Justify Expert Fees With Or Without A Breakdown

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Background

The case of JXX v Archibald involved a road traffic accident on 5 May 2018, resulting in severe injuries to the claimant, who became a protected party. The claim was settled on 28 March 2023, with terms approved by the Court on 16 May 2023. Detailed assessment proceedings commenced on 20 September 2023, with the claimant’s bill of costs totalling £901,026.98. The dispute focused on expert evidence fees sourced via Medical and Professional Services Limited (MAPS), a medical reporting organisation (MRO), which were challenged by the defendant due to a lack of transparency in the billing process.

Costs Issues Before the Court

The primary costs issue before the court was whether the claimant’s bill of costs was compliant with the Civil Procedure Rules, specifically regarding the inclusion of expert fees procured through MAPS. The defendant sought a declaration that these fees were non-compliant and requested that detailed assessment proceedings be stayed until the claimant provided detailed breakdowns of the costs. The key issue was the reasonableness and proportionality of the fees charged by MAPS, as compared to what solicitors would have charged for similar work.

The Parties’ Positions

The claimant argued that the use of MAPS was efficient and cost-effective, reducing solicitors’ costs while providing valuable services. They maintained that the fees claimed were reasonable and proportionate, citing the precedent set by cases such as Stringer v Copley. The defendant, however, disputed these fees, highlighting a significant disparity in costs when compared to direct instructions and arguing that a breakdown of MAPS’ charges was necessary to assess their reasonableness.

The Court’s Decision

The court determined that the claimant must decide whether to provide a breakdown of the fees charged by MAPS and the experts or to proceed with the assessment based solely on the expert evidence. If the claimant chose the former, the fees would be assessed considering both the expert’s evidence and MAPS’ involvement. If not, the assessment would be based on the hypothetical scenario of no MAPS involvement, focusing solely on the expert’s evidence. The court emphasised that the burden of providing evidence to justify the claimed fees rested with the claimant, and failure to do so could result in reduced allowances during the assessment.

Medical Agency Breakdown Must Be Provided To Avoid A 75% Reduction In Fees

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In Chaudhry v AXA Insurance UK Plc, the County Court at Guildford addressed the scope of information disclosure obligations under CPR Part 18 concerning costs recoverability. The Defendant sought further details regarding medical fees incurred through a third-party agency, arguing that such transparency was essential to ensure costs were reasonable and proportionate. The Claimant contended that the requested information was commercially sensitive, unavailable to him, and unnecessary in light of the court’s ability to summarily assess costs at the conclusion of proceedings. District Judge N Murphy found in favour of the Defendant, concluding that the Claimant’s agent, as an extension of the Claimant, should provide the requested breakdown to enable a fair assessment of the recoverable costs. The Court also imposed sanctions for non-compliance, capping the recoverable disbursements if the order was not adhered to.

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