Probate Costs Recoverable Where Grant Obtained Exclusively For Litigation

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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.

Successful Claimant Awarded Only 50% Of Costs Due To “Imprecise, Vague And Wide-Ranging Case”

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Background

The matter concerned an action brought by Illiquidx Limited against Altana Wealth Limited, Lee Robinson, Steffen Kastner and Brevent Advisory Limited for breach of confidence, infringement of trade secrets, breach of contract and copyright infringement. Following a liability trial, Mr Justice Rajah handed down judgment on 13 February 2025, finding that Altana and Brevent had breached a non-disclosure agreement and misused Illiquidx’s confidential information and trade secrets in establishing and operating the Altana Credit Opportunities Fund. The copyright infringement claim failed, as did the claim seeking to establish Mr Kastner’s liability for the acts of Altana or Brevent.

The procedural history revealed significant difficulties with Illiquidx’s pleadings throughout the litigation. In December 2020, Illiquidx attempted to reformulate its case on confidential information, seeking to adopt terminology from CF Partners v Barclays Bank by pleading a “Big Idea” with component elements called “the Detail”. Deputy Master McQuail rejected this formulation as incoherent and unintelligible, a decision upheld by Mr Justice Miles on appeal. Following further attempts at clarification in early 2022, Illiquidx reframed its confidential information as “the Business Opportunity” with component parts identified in writing as “the Detail”.

At the Pre-Trial Review, the court refused Illiquidx’s application to expand its case on confidential information from the written Detail to include oral conversations and narrative elsewhere in the pleading. Despite these rulings, Illiquidx’s trial skeleton continued an expansive approach, making extensive reference to matters both within and outside the Detail. During closing submissions, Illiquidx’s counsel substantially dropped reliance on the Detail and argued instead that the Business Opportunity was simply the high-level idea of a sanctions-compliant fund, evidenced by only a few documents in the Detail.

The costs hearing took place on 6 June 2025, with judgment reserved. Illiquidx’s costs were stated to be approximately £6.6 million, whilst the defendants’ costs totalled approximately £5.5 million. Mr Robinson had accepted liability for Altana’s liabilities pursuant to paragraph 128 of the liability judgment.

Costs Issues Before the Court

The court was required to determine several discrete costs issues arising from the liability judgment. First, whether costs should be reserved pending determination of quantum or dealt with immediately. The defendants argued that Illiquidx had greatly overstated the value of its claim at £10 million when the true value of damages would likely be £100,000 or less at any quantum trial, and that this potential exaggeration could only be properly assessed after quantum had been determined.

Second, the court needed to determine the appropriate percentage deduction from Illiquidx’s costs to reflect its failure on the copyright and joint liability claims. Illiquidx conceded that some deduction was appropriate, proposing 10%, whilst the defendants argued for 14.7% attributable to these failed claims.

Third, and most significantly, the court was asked to consider whether further deductions should be made to reflect Illiquidx’s conduct of the litigation, particularly its failure to plead its case with clarity and precision. The defendants sought a total deduction of 61.5% of Illiquidx’s assessed costs, incorporating both the failed claims and conduct issues.

Finally, the court needed to determine the appropriate rate of interest on costs (Illiquidx seeking 2% above base rate, the defendants proposing 1% above base rate) and the appropriate interim payment on account of costs, with Illiquidx seeking 60% of 90% of its costs and the defendants proposing 50% of any costs ordered, reduced to account for unpaid interim costs orders in their favour.

The Parties’ Positions

Illiquidx submitted that as the overall winner on liability, the starting point under CPR 44.2(2)(a) was that its costs should be paid by Altana and Brevent. It accepted that a 10% deduction was appropriate to reflect the failed copyright and joint liability claims, which it acknowledged were discrete claims for additional relief rather than alternative routes to the same outcome. Illiquidx argued that costs should be determined immediately rather than reserved, relying on the general principle established in Langer v McKeown that costs should follow the outcome of discrete issues to encourage professional conduct of litigation.

On the conduct issue, Illiquidx resisted any further deduction beyond the 10% for failed claims. Counsel argued that its case, whilst perhaps obscurely pleaded, had ultimately succeeded and was available on the pleadings. It submitted that matters of excessive disclosure costs should be left to detailed assessment rather than dealt with by way of percentage reduction at this stage.

The defendants’ primary position was that costs should be reserved pending the quantum trial, arguing that only then could the court properly assess whether Illiquidx had exaggerated its claim as permitted under CPR 44.2(4)(a) and 44.2(5)(c) and (d). They highlighted that no Part 36 offers had been made but indicated that “without prejudice save as to costs” offers existed which included quantum, though they were unwilling to waive privilege to put these before the court.

On the substantive costs issues, the defendants argued for a 14.7% deduction for the failed copyright and joint liability claims, based on Mr Seadon’s detailed analysis. More significantly, they sought a total deduction of 61.5% to reflect the unnecessary costs incurred due to Illiquidx’s conduct. Mr Seadon’s witness statement attempted to calculate the extent to which costs had been inflated by the “expansive, imprecise and vague” way the claim had been pleaded, including excessive disclosure costs of over £1.1 million resulting in 13,526 documents being disclosed, of which only 452 were referred to at trial.

The defendants emphasised the basic injustice of facing vague and expansive pleadings which failed to properly identify the case they had to meet, arguing this had discouraged settlement and placed them on an unequal footing. They submitted that the lack of clarity and precision justified a substantial departure from the general rule on costs.

The Court’s Decision

Mr Justice Rajah first addressed whether costs should be reserved, holding that they should be determined immediately. He applied the principles from Langer v McKeown, emphasising that requiring losing parties to pay costs as they lose encourages professional conduct of litigation and selectivity in points taken. The court noted that apart from policy considerations, it was desirable to deal with costs whilst the trial and judgment remained fresh in the judge’s mind.

On the reservation point, the court held that if the defendants wished exaggeration of the claim to be considered at the liability stage, they could have made a global Part 36 offer giving the claim its fair value, or some other costs-protective offer. The existence of “without prejudice save as to costs” correspondence was insufficient, particularly where the defendants were unwilling to waive privilege. The court applied the principle from Langer that parties cannot “have it both ways by withholding admission of the evidence of the offer but still asking the court to take account of it”.

Turning to the substantive costs determination, the court found that costs had been significantly increased by Illiquidx’s failure to identify its case clearly. The judgment detailed how costs had been increased “at every turn” – in pleadings, disclosure, evidence, trial preparation, cross-examination and inter-solicitor correspondence. The court particularly criticised the disclosure exercise, which resulted in millions of documents being harvested at a cost exceeding £1.1 million, describing Illiquidx’s approach as “casting about to find a case”.

However, the court declined to displace the general rule entirely. Three factors influenced this decision: first, Illiquidx had won on a case that was pleaded, however obscurely; second, the defendants’ defence remained unaffected but unsuccessful; and third, the defendants had advanced a false case that Mr Robinson was already aware of most of the information and had independently conceived the fund idea.

The court ordered the defendants to pay 50% of Illiquidx’s assessed costs on the standard basis, representing both a reduction for the failed claims and the court’s disapproval of how the claim had been prosecuted. Interest was awarded at 2% above base rate from the date of payment to Illiquidx’s solicitors until judgment. The interim payment was set at 50% of the reduced figure (i.e., 25% of total costs), taking a cautious approach given the high hourly rates exceeding guideline rates and outstanding interim costs orders of approximately £77,000 in the defendants’ favour.

The court expressly rejected the suggestion that excessive disclosure costs should be left to detailed assessment, holding that where disclosure had been ordered or agreed by reference to pleaded issues, the Costs Judge would not revisit whether a different disclosure exercise should have been undertaken. The 50% reduction therefore reflected both the court’s disapproval of Illiquidx’s conduct and the likely additional costs caused by that approach.

Blank Space? | Costs Budgeting In Cases Without A Stated Value

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Ever found yourself with a Part 7 claim form where the “value” section is conspicuously blank? This often happens when the main goal isn’t a straightforward sum of money – think of applications for injunctions, or TOLATA (Trusts of Land and Appointment of Trustees Act 1996) claims seeking orders about property occupation, ownership shares, or whether a property should be sold. Sometimes, the financial value is genuinely up in the air when proceedings kick off.

Whatever the reason, getting to grips with the costs implications from day one is absolutely vital. The general rule that the loser pays a portion of the winner’s costs still applies. So, understanding the costs management rules is key to managing your client’s expectations and your firm’s exposure.  

And things are about to get even more interesting. A significant shake-up to costs budgeting is coming with new pilot schemes under Practice Directions 51ZG1, 51ZG2, and 51ZG3, set to run from 6 April 2025 for three years. These pilots, applying to claims issued on or after this date in specific courts, aim to simplify costs budgeting, making it more proportionate. Expect new, streamlined costs budgeting forms, like the much-talked-about Precedent Z, which is tipped to be a more concise document.

This means we’re heading into a temporary dual system: claims issued before 6 April 2025, or those in courts not part of the pilots, will stick with the current costs management rules in CPR Part 3. Claims falling under the pilots will follow the new Practice Directions. This split demands extra vigilance to ensure you’re on the right track.

The new pilots consistently stress “proportionate cost” , a clear signal from the Civil Justice Council’s review which called for a more flexible approach. For claims without a stated monetary value – often seeking significant non-monetary outcomes – this idea of proportionality becomes particularly nuanced.  

Why is “No Value Stated” on the Claim Form?

As mentioned, it’s usually because:

  • The main relief isn’t monetary: Injunctions, TOLATA orders for sale or declarations of property rights, specific performance. 
  • Genuine uncertainty: Sometimes, the financial value is truly unknown at the start, perhaps needing disclosure or expert evidence to crystallise.
  • A word of caution: Deliberately omitting a value that could have been reasonably stated might not sit well with the court and could influence case management.

The reason for the blank space can subtly affect how a judge views the case, even if the rules seem to treat all such claims the same initially. The court has discretion, often signalled by the phrase “unless the court orders otherwise” in the new pilot Practice Directions. Be ready to explain the omission clearly in the Directions Questionnaire (DQ) and at any Case Management Conference (CCMC).

The rise of digital claim portals like OCMC and DCP might eventually lead to more structured input about a claim’s nature, even if “no value stated” remains an option.

Track Allocation: The First Big Step (CPR Part 26)

Allocating a claim to the small claims, fast, intermediate, or multi-track is a crucial early decision. For “no value stated” claims, CPR 26.7(2) says the court will allocate it to the track it “considers most suitable having regard to the matters mentioned in rule 26.8(1)”.  

The court looks beyond just money, considering factors from CPR 26.8(1) like : 

      • The nature of the remedy sought.
      • Likely complexity (facts, law, evidence).
      • Number of parties.
      • Value and complexity of any counterclaim.
      • Amount of oral evidence needed.
      • Importance of the claim to non-parties.
      • Parties’ views on allocation.
      • Parties’ circumstances.

The Directions Questionnaire (DQ) is your main chance to provide this information and argue for a suitable track. Many non-monetary or complex claims end up on the multi-track. The multi-track is the default for cases not fitting other tracks, often those valued over £100,000, but complexity or the remedy sought can also lead here. 

If necessary, the court can assess a financial value itself, disregarding undisputed amounts, interest, costs, and contributory negligence (CPR 26.8(2)).

Don’t forget the Intermediate Track, introduced in October 2023. It generally covers claims between £25,000 and £100,000, with trials up to three days and limited expert evidence. If a “no value stated” claim (like a declaration with limited factual dispute) seems to fit these complexity criteria, it could be allocated here. This is significant because the intermediate track usually means Fixed Recoverable Costs (FRC), which would generally override standard costs budgeting.

Costs Budgeting: Keeping Up with Changes

Once a “no value stated” claim lands on a track requiring costs management (usually the multi-track), the budgeting rules kick in. How this works depends on whether your claim is under the existing CPR or one of the new pilot schemes.

Scenario 1: The Current Rules (Claims NOT Under the New Pilots)

This applies to claims issued before 6 April 2025, or those issued after but outside the pilot’s scope, if allocated to the multi-track where CPR 3.12 mandates costs management. 

      • The Form: Precedent H.
      • Filing Deadlines (CPR 3.13):
        • If the claim form states a value less than £50,000, file Precedent H with the DQ. 
        • For any other case (including claims over £50,000 or where value is unstated/problematic), file it no later than 21 days before the first CCMC. 
        • The “No Value Stated” Dilemma: Since there’s no stated value “less than £50,000,” the safer bet is the “any other case” rule (21 days before CCMC). Some play it extra safe and file with the DQ anyway to avoid any doubt.
      • Precedent H Detail: It needs incurred costs and estimated future costs for each litigation phase, verified by a statement of truth. If total budgeted costs are under £25,000 OR the stated claim value is under £50,000, you might only need the first page. Again, for “no value stated” claims, caution suggests a full Precedent H if unsure.
      • The Big Stick (CPR 3.14): Fail to file on time, and your recoverable costs for future work could be slashed to just court fees, unless the court orders otherwise. Relief is possible (Denton test) but not guaranteed.
      • Budget Discussion Reports (Precedent R): If budgets are filed, represented parties must file an agreed Precedent R no later than 7 days before the first CCMC.

The ambiguity around CPR 3.13 filing deadlines for “no value stated” claims is a real headache. Getting it wrong can be costly.

Scenario 2: The New Pilot Schemes (Claims From 6 April 2025)

For Part 7 claims issued on or after 6 April 2025 that fit the specific criteria of the new pilot schemes (PD 51ZG1, PD 51ZG2, and PD 51ZG3), the rules change. These pilots run for three years, until 6 April 2028. 

      • New Forms: Say hello to Precedent Z (Simplified Costs Budget), Precedent RZ (Simplified Budget Discussion Report), and Precedent TZ (Simplified Variation Form). Precedent Z is expected to be much shorter than Precedent H. 
      • CPR 3.13 & 3.14 Don’t Apply: For claims in these pilots, the old filing and sanction rules are out. 
      • Pilot Filing Deadlines (generally, unless court orders otherwise):
        • Precedent Z: File and serve no later than 21 days before the first CCMC. 
        • Precedent RZ: Represented parties served with a Precedent Z file and serve no later than 7 days before the first CCMC. (PD 51ZG3 has a 14-day rule for defendants and claimants usually don’t file one ). 
      • Pilot Sanctions: If you don’t comply (e.g., fail to file Precedent Z), the court may impose sanctions, which may include limiting your recoverable costs to court fees. This is more discretionary than the old CPR 3.14.

Let’s break down the main pilots for “no value stated” claims:

1. Practice Direction 51ZG1 (Business and Property Courts / Work)

      • Scope: Part 7 multi-track claims (issued 6 April 2025 – 6 April 2028) in the Business and Property Courts (BPC) of England and Wales, BPC in Manchester/Leeds, or “Business and Property work” in the County Court at Manchester, Leeds, or Central London.  
      • Key Rule for “No Value Stated” (Para 5): If a claim has no stated value, seeks only non-monetary relief, OR parties can’t agree if it’s £1m+, then unless the court orders otherwise, the claim is treated as having a value of £1 million or more.  
      • What this means:
        • If treated as >= £1 million: The court will not automatically make a Costs Management Order (CMO) unless it’s satisfied it’s necessary for justice and proportionate cost (PD 51ZG1, para 6(a)). If a CMO is made, the court directs the budget form (Precedent Z, H, or updated Z) (PD 51ZG1, para 6(b)). 
        • If treated as < £1 million (e.g., by court order or party agreement): At the CCMC, a CMO using Precedent Z is the default, unless a CMO isn’t required (PD 51ZG1, para 7(b)).  
      • Important: Regardless of this valuation, all represented parties (except litigants in person) must still file and serve a Precedent Z no later than 21 days before the first CCMC, unless the court says otherwise (PD 51ZG1, para 4). 

2. Practice Direction 51ZG2 (Certain County Court Claims <£1 million)

      • Scope: Part 7 multi-track claims (issued 6 April 2025 – 6 April 2028) valued at less than £1 million, where costs management would normally apply, and which are not under PD 51ZG1 or QOCS rules (PD 51ZG3). This pilot applies to such claims in the County Court at Central London, or the Leeds or Bristol District Registries.
      • “No Value Stated”: PD 51ZG2 does not have the same default £1m+ valuation rule as PD 51ZG1. So, if a “no value stated” claim is in one of these County Courts and isn’t “Business & Property work,” the court will assess its notional value. If it’s deemed <£1m, PD 51ZG2 applies.
      • If PD 51ZG2 applies: Parties file Precedent Z (21 days before CCMC) and Precedent RZ (7 days before CCMC). A CMO using Precedent Z is the likely default (PD 51ZG2, paras 4, 5, 6). 

3. Practice Direction 51ZG3 (QOCS Cases in specific High Court Registries)

      • Scope: Part 7 multi-track QOCS claims (issued during pilot period) in the District Registry at Manchester or Birmingham. 
      • All parties (except LiPs) file Precedent Z 21 days before CCMC. Defendants file Precedent RZ 14 days before CCMC. Claimants usually don’t file RZ. 
      • CMO for Defendant’s costs isn’t automatic.
      • Parties can give notice to seek a split trial or full Precedent H budgeting.

What if no CMO is made under the Pilot Schemes? If the court doesn’t make a CMO:

      • The Precedent Z budgets are treated as costs estimates (PD44, paras 3.2-3.7 apply).
      • Parties usually need to file and serve an updated Precedent Z no later than 28 days before trial (or trial window/7 days before PTR, whichever is earlier), unless the court says otherwise.

The default valuation in PD 51ZG1 (para 5) for “no value stated” claims in BPC/designated B&P work is a big shift. It means costs management isn’t automatic if the claim is treated as £1m+. This will likely lead to arguments at the CCMC.

Real-World Examples & Strategic Thinking

Let’s see how this might play out:

A. Claim for Purely Non-Monetary Relief (e.g., an injunction, or a TOLATA claim for a declaration or order for sale).

      • Under PD 51ZG1 (BPC/B&P work in specified CCs, issued on/after 6 April 2025):
        • Default: Treated as >= £1 million (PD 51ZG1, para 5).
        • Result: CMO not automatic. All file Precedent Z. CCMC decides if CMO is needed.
      • Under PD 51ZG2 (Specific CCs, not B&P, notional value <£1m, issued on/after 6 April 2025):
        • Court assesses notional value. If <£1m, PD 51ZG2 applies. Parties file Precedent Z. CMO with Precedent Z likely.
      • Outside Pilots (issued before 6 April 2025, or in non-pilot court):
        • Likely multi-track. Standard CPR Part 3 costs management. Precedent H 21 days before CCMC.

B. Claim Where Monetary Value is Genuinely Uncertain at Outset.

      • Under PD 51ZG1: If parties can’t agree if value is £1m+, treated as >= £1 million by default (PD 51ZG1, para 5). Implications as above.
      • Under PD 51ZG2: Court assesses notional value. If <£1m, PD 51ZG2 regime (Precedent Z) applies.
      • Outside Pilots: Likely multi-track. Precedent H 21 days before CCMC.

C. Claim Where Value is Omitted but Could/Should Have Been Stated.

      • Judicial View: Courts don’t like tactical omissions.
      • Impact: Could influence track allocation, costs management decisions (especially “unless court orders otherwise” clauses), and final costs recovery.

The “unless the court orders otherwise” in PD 51ZG1, para 5, will be a battleground. A party wanting a CMO (likely a defendant) will need to argue against the default >=£1m treatment or argue a CMO is needed anyway.  

For TOLATA claims, choice of court after April 2025 could be strategic. Issuing in a County Court designated for “Business and Property work” (e.g., Manchester, Leeds, Central London under PD 51ZG1 ) means the PD 51ZG1 default >=£1m rule applies to “no value stated” claims. Issue the same claim in a County Court under PD 51ZG2 (e.g., Bristol, or non-B&P list in Central London/Leeds) with a notional value <£1m, and PD 51ZG2’s simplified budgeting applies. 

Quick Comparison: “No Value Stated” Claims

Feature Standard CPR (Pre-Pilot / Outside Pilot) PD 51ZG1 (BPC/B&P Work in specified courts) PD 51ZG2 (Specific CCs, <£1m, non-B&P work)
Default Value for “No Value Stated” Court assesses (CPR 26.8(1)&(2)). Often multi-track. Treated as >= £1 million unless court orders otherwise (para 5). Court assesses notional value. If <£1m, PD 51ZG2 applies.
Budget Form Precedent H. Precedent Z (initially). Court may direct H or updated Z if CMO for >=£1m claim. Z if <£1m. Precedent Z.
Budget Filing Deadline Likely 21 days before CCMC (CPR 3.13(1)(b)). Risk if DQ deadline deemed to apply. 21 days before CCMC (Precedent Z). 21 days before CCMC (Precedent Z).
Sanction for Non-Filing CPR 3.14: Costs limited to court fees (unless relief). Discretionary: “may include” limiting to court fees (para 11). CPR 3.14 disapplied. Discretionary: “may include” limiting to court fees (para 9). CPR 3.14 disapplied.
Costs Management Order (CMO) Automatic? Yes, if multi-track & CPR 3.12 applies. No, if >=£1m (unless court deems necessary). Yes, if <£1m (unless not required). Yes (unless court deems not required).
Key Strategy for “No Value Stated” Clarify filing deadline; meticulous compliance. Justify track via DQ. Challenge/defend default >=£1m valuation? Argue for/against CMO at CCMC. Persuade court of notional value <£1m for PD 51ZG2.

Key Pointers for Your Practice

      • Early Assessment is King: Even without a stated value, internally assess potential financial implications, complexity, and importance. This helps anticipate track and budgeting needs.
      • The DQ is Your Stage: For “no value stated” claims, the Directions Questionnaire is where you make your case for track allocation, using CPR 26.8(1) factors.
      • Talk to Your Opponent: Early discussion on notional value and the applicable costs regime can save contested CCMC hearings.
      • CCMC Prep: Be ready to explain why no value is stated. If under PD 51ZG1, be prepared to discuss the default >=£1m valuation and CMO appropriateness.
      • CRITICAL – Know Your Regime: Is it standard CPR or a pilot scheme? This depends on issue date, court, and claim nature.
      • Budget Diligently: Precedent H or Z, make it realistic, well-supported, and on time. Don’t forget the statement of truth.
      • Sanctions Awareness: Know the difference: CPR 3.14 (fairly automatic) vs. pilot schemes (discretionary, but can still be severe).
      • Litigants in Person (LiPs): They generally don’t file budgets, but represented parties must still serve their budgets on LiPs.

Even though Precedent Z is “simplified” , it still needs careful preparation. The core principles of proportionality and reasonableness remain. The simplification is more about the form and process, not a free pass on justifying your costs. 

The next few years, especially during the pilot schemes (April 2025 – April 2028), will be a learning curve. Keeping up with how these new rules are applied in pilot courts will be essential.  

The Future of Costs Budgeting

These pilot schemes are a testing ground, driven by the Civil Justice Council’s call for a “more flexible approach” to costs management. Costs budgeting, in some form, is clearly here for the long haul.

The success of these pilots, especially for “no value stated” claims, will depend on consistent judicial application and clear guidance. If deemed successful, they could well shape the future of costs budgeting nationwide. So, getting to grips with these changes now isn’t just about the next three years – it’s about preparing for the future of civil litigation costs.

Need help with a Part 7 claim or understanding these upcoming costs budgeting changes? Contact the team at tmclegal.co.uk for expert advice.

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.

CPR 46.4 | Protected Parties | Court Rejects ‘Light Touch’ Approach To Assessement Of Solicitor-Client Costs Shortfall

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Background

In CFB v AXA Insurance UK PLC the Claimant, CFB, a protected party represented by a litigation friend due to a severe brain injury sustained from a fall at a construction site on 12 March 2019, succeeded in obtaining a £1 million settlement from AXA Insurance under the Third Party (Rights against Insurers) Act 2010.

During the proceedings, complex issues arose, including the denial of employment by the employer and AXA’s attempt to avoid the insurance cover based on non-disclosure of the Claimant’s immigration status.

The settlement precipitated two claims for costs: one inter partes claim (the Claimant’s costs against the Defendant) and one solicitor-client claim for costs (Prince Evans Solicitors LLP’s costs against the Claimant). The hearing for the costs determination took place over multiple dates: 7 August 2024, 12 December 2024, and 24 January 2025.

The settlement of inter partes costs stood at £378,000 (inclusive of interest and assessment costs) against a claim of £439,167.62. The solicitor-client costs included additional liabilities such as a success fee of £31,413.80 and an ATE premium of £1,680, along with a shortfall in costs recovered from the Defendant and a separate sum for “pure” solicitor-client costs amounting to over £23,000.

Costs Issues Before the Court

The costs issues before the court involved two primary claims. The inter partes claim needed approval for the settlement reached, involving a recovery percentage of approximately 85%. The more contentious issue was the solicitor-client claim.

Prince Evans Solicitors LLP (PE) sought recovery for additional liabilities, a shortfall in costs not recovered from AXA, and separate “pure” solicitor-client costs. These claims encompassed work related to the solicitor-client relationship beyond the settlement proceedings, specifically covering issues such as immigration advice and costs related to the Claimant’s appointment of a deputy under the Court of Protection.

The Parties’ Positions

Regarding the inter partes costs, the parties agreed on a settlement of £378,000 against a claim of £439,167.62. The negotiations for settlement appeared to have considered various vulnerabilities and potential deductions on assessment.

In addressing the solicitor-client costs, Prince Evans Solicitors LLP, through Mr. Roy KC, advocated for the court to take a “light touch” approach to approval, heavily relying on counsel’s advice. The solicitors argued that the current procedure for determining these claims was flawed, suggesting that a more lenient process aligned with the treatment of damages claims be adopted. They highlighted potential conflicts of interest given the litigation friend’s dual role as the solicitor’s spouse and the solicitor’s preference for a senior fee earner allaying concerns on the firm’s behalf.

The Court’s Decision

Costs Judge Brown scrutinised both the procedural aspects and the substantive costs claims put forward by Prince Evans Solicitors LLP.

In his decision, Costs Judge Brown addressed several criticisms raised by Mr Roy KC and Mr Smith, particularly regarding the scrutiny of solicitor-client cost claims. The Judge rejected the notion of a heavy presumption against approving settlements and underscored the necessity of detailed scrutiny in such cost matters given the potential conflicts of interest and the need to protect the interests of the protected party.

The court dismissed the suggested “light touch” approach, explaining that the existing rules mandated a meticulous examination of the costs claimed to ensure they were reasonable and in the interest of the protected party. Key to the judgment was the necessity to consider the merits of the costs claimed, not merely rely on the advice of learned counsel without further interrogation.

Concerns were raised over the high hourly rates charged, the substantial reliance on counsel, and the lack of delegation, which all contributed to an inflated costs claim. Furthermore, the claims for “pure” solicitor-client costs, including immigration advice and the appointment of a deputy, were considered highly unusual and possibly outside the scope of what could reasonably be charged under the CFA.

Ultimately, while the court approved the inter partes costs settlement, it refused to approve the solicitor-client cost deductions without a detailed assessment. The judgment emphasised that proper scrutiny and assessment were indispensable to safeguarding the interests of vulnerable parties and ensuring fair and reasonable solicitor remuneration.`

Part 36 Additional Amount Is “All Or Nothing” | Maximum £75,000 Awarded After Rejected Offers

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The High Court’s decision in Barry & Anor v Barry [2025] EWHC 819 (KB) confirms that the CPR 36.17(4)(d) additional amount operates as an “all or nothing” entitlement that must be awarded unless the defendant discharges the burden of establishing injustice.

Background

Underlying Dispute: The case arises from a dispute between elderly parents and their son over a series of loans totalling over £650,000. The factual dispute regarding whether the funds were loans or gifts is not the focus here; the judgment concentrates on how costs should be allocated once the court determined that a binding loan agreement existed.

Costs Context: Key costs issues addressed include:

  • The request to vary the pre-approved costs budget in light of late developments.
  • An allegation of “oppressive behaviour” by the defendant during litigation.
  • The impact of the rejected Part 36 settlement offers on the costs award.
  • The method and quantum of the payment on account of costs.

Budget Variation Applications

Late Amendments and Promptness: The defendant’s late amendment to his defence — introducing a new argument regarding the lack of intention to create legal relations — led to significant additional work in trial preparation. The claimants sought a revision of their costs budget to account for these unanticipated developments. The judge emphasised that requests for budget variation must be made promptly [17, 20]. Applications made long after the completion of disclosure were rejected due to a lack of promptness [17].

Judicial Reasoning: The court accepted that the defendant’s last-minute changes were “significant developments” justifying an upward revision for trial-related work [23, 25–26]. However, it reduced the amounts claimed where it found that an excessive proportion of senior lawyer time had been billed [24, 26].

Evaluation of the Oppressive Behaviour Claim

Claim Overview: The claimants contended that the defendant’s litigation conduct was oppressive — designed to drive up legal costs. The court, however, found that although the defence was presented aggressively, the necessary threshold of intentional causation had not been met [18–19].

Court’s Findings: The judge stated that he “never once sensed that he was trying to run up costs needlessly or deliberately to oppress or coerce his parents” [19]. The decision clarifies that aggressive litigation does not equate to oppressive behaviour unless there is clear evidence of a deliberate intent to cause disproportionate expense. The critical words in PD 3D paragraph 13 are “in seeking to cause”, which the court interpreted as requiring targeted intentionality rather than mere “but for” causation [18].

Part 36 Costs Consequences

Settlement Offer Rejections: Prior to trial, the parents made formal Part 36 offers which the defendant rejected. The offers were made on 17 September 2021 — pre-issue, two years before trial, and shortly after the defendant had rejected mediation [34(2), (4)]. Since the final judgment was more favourable than the claimants’ offers, the court applied the Part 36 regime [32].

The Court’s Analytical Framework: The judge set out a nine-point framework for approaching CPR 36.17 entitlements [33]:

    1. The CPR 36.17(4) cost entitlements apply if the claimant obtains a judgment at least as advantageous as the proposals in the Part 36 offer.
    2. The court must order the four CPR 36.17(4) entitlements unless it is unjust to do so.
    3. The burden shifts to the defendant to establish that it is unjust to order any of the four entitlements.
    4. Entitlement (d) — the “additional amount” — is an “all or nothing” entitlement (JLE v Warrington & Halton Hospitals NHS Trust [2019] EWHC 1582 (QB)).
    5. Therefore, the court must order the tiered “prescribed amount” unless the defendant establishes that it is unjust.
    6. In determining whether it is unjust, the court should have regard to the fact that the additional amount is not compensatory (OOO Abbott v Design Display Ltd [2014] EWHC 3234 (IPEC)); is a key ingredient of the Part 36 code to provide additional incentive to accept reasonable offers (Thai Airways v KI Holdings [2015] EWHC 1476 (Comm)); and is intended to penalise the unreasonable refusal to accept an adequate offer (Cashman v Mid Essex Hospital Services NHS Trust [2015] EWHC 1312 (QB)).
    7. In assessing the sum to which the prescribed percentage applies, the court should consider the gross award it would have made but for the Part 36 provisions, including basic interest, but not any additional interest ordered under Part 36 (Mohammed v The Home Office [2018] EWHC 3051 (QB)).
    8. In considering whether ordering the additional amount is unjust, the court must have regard to “all the circumstances” (CPR 36.17(5)).
    9. The court should also have regard to the five matters set out at CPR 36.17(5)(a)–(e).

Award Components: The judgment awarded:

      • Indemnity basis costs: From 15 October 2021 (the expiry of the relevant period) [41(2)].
      • Enhanced interest on damages and costs: Set at 8% above the base rate [40–41]. The judge rejected the maximum 10% rate as disproportionate, noting that the parties were private individuals rather than institutions [38].
      • An additional sum: The maximum of £75,000 was awarded under CPR 36.17(4)(d) [36, 41(4)].

Judicial Commentary: The judge stated: “The rule mandates the additional amount unless displaced by the weight of circumstances that establish the award is unjust. It is not unjust. This is a paradigm case where the additional amount should be awarded” [35]. The court emphasised that the purpose of the additional amount is to incentivise offerees to accept adequate offers and, if necessary, to penalise unreasonable refusals [35].

Payment on Account of Costs

Interim Payments: The judge ordered a substantial payment on account, reflecting:

      • 55% of incurred costs [48],
      • 90% of the budgeted costs (as per July 2022 budget) [53], and
      • 80% of the newly allowed variation costs [53–54].

Rationale: For incurred costs, the court noted that assessing the correct proportion is “always a matter of risk management” [47]. The higher percentage for incurred costs (55% rather than the typical 50%) reflected the indemnity basis of assessment, under which “any” doubt about reasonableness is resolved in favour of the receiving party [47–48].

For varied budget costs, the court applied a lower percentage (80% rather than 90%) because these costs “did not receive the same degree of scrutiny that would occur at a CCMC” [54].

Conclusion

The judgment in Barry & Anor v Barry [2025] EWHC 819 (KB) provides a detailed account of how costs are determined when unexpected developments occur during litigation. The court’s approach is methodical: applying existing rules strictly while requiring prompt action for budget revisions, setting a high bar for oppressive conduct, and confirming that Part 36 consequences operate on an “all or nothing” basis subject to the injustice discretion.

Part 36 Consequentials | Enhanced Interest, Indemnity Costs And 100% Payment On Account

CPR 36.17 And The Just Rewards Of A Good Part 36 Offer

CPR 3.15A | Costs Budget Revisions | Significant Developments And The Need To Act Promptly

Significant Developments And The New Precedent T

CPR 44.2(8) | Payments On Account In Costs Budgeted Cases

Costs Thrown Away, Indemnity Costs And Payments On Account

 

Solicitor’s Costs Budget Figure, Prepared on Reasonable and Proportionate Basis, Does Not Inherently Constitute Misleading or Improper Conduct Under CPR 44.11

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Background

The Vardy v Rooney case concerned defamation proceedings brought by Rebekah Vardy (the Claimant) against Coleen Rooney (the Defendant). The Claimant’s claim was unsuccessful, leading to an order by Steyn J requiring the Claimant to pay 90% of the Defendant’s costs on an indemnity basis. A subsequent hearing from 7 to 9 October 2024 before Senior Costs Judge Andrew Gordon-Saker examined preliminary issues concerning the Defendant’s Bill of Costs. The present appeal, brought by the Claimant, contested one aspect of the judgment dated 8 October 2024 concerning allegedly improper or unreasonable conduct by the Defendant’s legal team under CPR 44.11(1)(b). Specifically, the appeal focused on whether the Defendant’s solicitors had created a misleading impression during costs budgeting by understating incurred costs and criticising the Claimant’s higher figures without full transparency.

Costs Issues Before the Court

The core issue was whether the Senior Costs Judge was correct in declining to find that the Defendant’s legal representatives acted improperly or unreasonably under CPR 44.11(1)(b). If such conduct had been established, the court would then consider whether to impose a sanction under CPR 44.11(2)(a) by disallowing some of the Defendant’s recoverable costs. The appeal’s focus was strictly on the conduct of the Defendant’s legal representatives in submitting Precedent H, a costs budgeting document which must include a statement of truth. The Claimant argued that the Defendant’s lawyers created a misleading impression by providing understated incurred costs figures without clarifying that these figures were estimates of what would be recoverable on a standard basis, not the actual costs incurred.

The Parties’ Positions

The Claimant contended that the Defendant’s legal team failed to be transparent about their Precedent H figures, leading to a misleading comparison with the higher costs figures in the Claimant’s Precedent H. This lack of clarity allegedly prevented an accurate assessment of costs and improperly influenced the costs budgeting process. The Claimant argued that this constituted unreasonable and improper conduct, warranting a sanction under CPR 44.11.

Conversely, the Defendant maintained that their Precedent H figures were prepared accurately based on a reasonable and proportionate assessment of costs, as they believed was required by CPR guidelines. The Defendant’s team posited that they assumed the Claimant’s figures were similarly prepared, thus negating any intent to mislead. The Respondent’s Notice added that no adverse inferences could be drawn against the Defendant’s counsel or their solicitors without waiving privilege or having sought cross-examination.

The Court’s Decision

The High Court upheld the Senior Costs Judge’s decision, finding that the Claimant had not met the burden of proving that the Defendant’s legal team acted improperly or unreasonably. The judge acknowledged some lack of transparency but concluded it fell short of misconduct under CPR 44.11. The court identified no misleading conduct that would meet the narrow definitions of “unreasonable” or “improper” as clarified in Bamrah v Gempride Ltd. The court reasoned that the Defendant’s legal team might reasonably have assumed the Claimant’s costs figures were similarly adjusted for proportionality. Therefore, the submission that the Defendant’s legal team should have been more transparent was accepted as a justified criticism but did not rise to the level of unreasonable or improper conduct requiring a sanction.
Ultimately, the appeal was dismissed, reinforcing the importance of clear and transparent communication in costs budgeting while recognising that failure to provide perfect transparency does not inherently constitute actionable misconduct under CPR 44.11.

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.

Costs Management | “Unrealistic And Unreasonable” Costs Budget Leads To Adverse Costs Award

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Background

These proceedings concern a complex construction dispute involving multiple defendants related to alleged defects in student accommodation constructed using modular building techniques. The claimants, GS Woodland Court GP 1 and GP 2 Limited, acting as general partners for GS Woodland Court Limited Partnership, brought proceedings against seven defendants involving significant allegations concerning fire safety attenuation and construction defects.

The construction was managed on a construction-management basis, with seven defendants spanning different aspects of the project: the construction manager, architect, cladding contractor, modular unit supplier, developer, fire-stopping works contractor, and installer. The claim involved allegations that numerous fire safety defects had not been properly implemented in the modular accommodation.

A half-day Costs Management hearing was convened to assess and manage the litigation costs, during which an unusual application was made by several defendants for their costs of the Costs Management hearing itself. The total claim against the defendants was approximately £11 million, with potential remediation costs estimated at £30 million.

Costs Issues Before the Court

The primary costs issues before the court included:

1. Assessment of the reasonableness and proportionality of the claimants’ costs budget
2. Evaluation of the claimed hourly rates against guideline rates
3. Consideration of the defendants’ application for costs of the Costs Management hearing
4. Determining an appropriate approach to costs management in multi-defendant construction litigation

The Parties’ Positions

The claimants (represented by Ms Packman KC) argued that the complexity of a multi-defendant case justified their approach. They initially sought a costs budget of £8.74 million, which was subsequently reduced to approximately £7.4 million.

The defendants (particularly represented by Ms Stephens KC) contended that the claimants’ costs were disproportionate and unreasonable. They highlighted significant discrepancies between the claimed rates and the Guideline Rates, with the claimants’ solicitors charging substantially higher rates without meaningful justification.

The Court’s Decision

Mr Justice Constable made several critical observations:

1. Rates: The claimed rates significantly exceeded Guideline Rates, with Jones Day charging rates substantially higher than recommended. The court indicated a potential downward adjustment of approximately £1.4 million solely based on rate reductions.

2. Proportionality: While acknowledging the case’s complexity, the judge suggested the claimants’ costs were potentially disproportionate, particularly when compared with the defendants’ aggregate costs.

3. Costs Management Hearing: Applying recent authorities (Nicholas Worcester v Dr Philip Hopley and Jenkins v Thurrock Council), the court determined that the claimants’ unrealistic initial budget warranted potential cost consequences.

4. Final Outcome: The court approved a reduced budget of £4.212 million for estimated costs and granted the defendants’ application for costs of the Costs Management hearing, with D2, D3, and D4/D5 recovering their reasonable attendance costs from the claimants.