Additional Security For Costs Ordered For Inquiry And Detailed Assessment Despite Discharge Of Injunction.

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Background

The legal dispute involved Alta Trading UK Limited and its co-claimants against Peter Miles Bosworth and various other defendants. The claim stemmed from allegations of fraudulent misrepresentation and improper trading activities. Initially, in February 2015, Teare J granted the Claimants a worldwide freezing order against the Defendants, requiring fortification of $2 million. Over the following years, the freezing order was continued, supplementary applications for fortification were made, and costs orders against different defendants were issued and reviewed. In February 2025, Mr Justice Henshaw ruled in favour of the Defendants, dismissing the Claimants’ claims and leading to various consequential applications regarding fortification and security for costs.

Costs Issues Before the Court

The primary costs issues under consideration were requests for additional fortification of the Claimants’ undertakings in damages and additional security for costs. Initially, fortification of $2 million had been ordered in 2015, and despite requests for increased amounts over the subsequent years, these had often been refused, with the Claimants offering instead to set aside various amounts in specific accounts. Following the February 2025 ruling against the Claimants, Mr Bosworth and Mr Hurley applied for additional security for costs ($3,736,451), alongside Mr Kelbrick/Attock Mauritius requesting further fortification of $89,045,000 and additional security for costs of £2,798,000 due to asset depletion and increased expected litigation costs related to the Inquiry into damages.

The Parties’ Positions

Claimants: The Claimants argued against the applications for further fortification and security for costs. They asserted no jurisdiction existed to require additional fortification as the injunction had already been discharged. They maintained the existing security (set aside in specific accounts) was adequate, and depletion of assets in jurisdiction was justifiable. The Claimants’ solicitor, Mr Morrison, presented financial documents showing substantial net assets and argued against any need for further fortification or security for costs.

Defendants: The Defendants, particularly Mr Bosworth, Mr Hurley, and Mr Kelbrick/Attock Mauritius, highlighted the insufficiency of current security given the recently ordered Inquiry into damages and detailed assessment of costs. They argued the Claimants had depleted available assets significantly, raising concerns about recovering awarded costs and damages. They sought further fortification equating to the expected extensive litigation costs and argued misconduct and dishonesty by the Claimants justified additional security.

The Court’s Decision

Mr Justice Henshaw ruled against further fortification, agreeing with the Claimants that fortification typically cannot be increased post-discharge of the injunction, applying principles from relevant case law such as The Mito and Thai-Lao Lignite (Thailand). The court found it was inappropriate to apply CPR 3.1(5) to order payment into court in these circumstances.

As to additional security for costs, Mr Justice Henshaw found significant changes in circumstances justified increasing security. The detailed assessment and Inquiry, alongside increased costs due to the Claimants’ conduct, warranted additional security. The court ordered the Claimants to provide further security for Mr Bosworth and Mr Hurley’s costs (totaling £3,736,451) and for Mr Kelbrick/Attock Mauritius (£2,798,000). The orders were not made in ‘unless’ form, allowing liberty to apply to address potential non-compliance.

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

 

Common Defence Costs | No Division Required Between Co-Defendants Where One Party Foots The Bill

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The High Court’s decision in Rollerteam Ltd v Siddiqi addresses a fundamental but frequently misunderstood aspect of costs recovery: where multiple defendants benefit from a costs order but only one party has discharged the solicitors’ bills, who has the right to recover those costs?

Background

The underlying proceedings arose from a protracted family dispute concerning the Sherlock Holmes Museum in Baker Street, London. On 10 January 2019, Tariq Siddiqi commenced proceedings against five defendants claiming £4,149,911.84 in damages for alleged blackmail, harassment and libel. The defendants were represented by RPC under a joint retainer arrangement.

On 24 May 2019, following applications for strike out and summary judgment, Warby J made comprehensive orders in the defendants’ favour. He dismissed Siddiqi’s applications, granted summary judgment for the Second to Fifth Defendants, and struck out the claim save for the harassment allegations against the First Defendant. Crucially, he ordered Siddiqi to pay all five defendants’ costs of four separate applications, to be assessed on the standard basis if not agreed, with a payment on account of £39,938.52.

The Critical Payment Dynamic

What emerged during the subsequent detailed assessment proceedings was that whilst all five defendants had benefited from Warby J’s costs order, only the Fourth Defendant (Rollerteam) had actually paid RPC’s bills. The other defendants, despite being named beneficiaries of the costs order, had discharged no liability to the solicitors and therefore had no costs to recover.

This arrangement is more common in practice than many appreciate. In family business disputes, partnership litigation, or group actions, it frequently occurs that one party agrees to bear the legal costs on behalf of all co-defendants, whether for reasons of financial capacity, strategic control, or simple necessity when other parties become uncooperative or insolvent.

The Detailed Assessment

Following directions from Costs Judge Rowley in December 2022, the defendants were required to commence detailed assessment proceedings by 15 February 2023. Only Rollerteam served a Notice of Commencement, claiming costs of £82,432.78. The other defendants could not do so – having paid nothing to RPC, they had no bills to serve.

On 27 April 2023, the Costs Judge made an unless order requiring Rollerteam to serve a revised bill that would indicate, where work was done jointly for multiple defendants, what proportion was claimed on behalf of Rollerteam specifically.

Rollerteam duly served a revised bill totalling £75,228.43. However, rather than attempting to apportion costs between the five defendants, they argued in detailed Assessment Notes that since RPC had represented all defendants under a joint retainer, and the costs orders were in favour of all defendants, there was no realistic basis for apportionment. They claimed 100% of the common costs, with only a 10% reduction for work done exclusively for the First Defendant on the harassment claim.

The bill stated explicitly that “100% of the costs incurred in relation to the injunction application, the disclosure application, the strike-out application and the amendment application were incurred for the benefit of the fourth defendant, just as 100% of those costs were incurred for the benefit of the first, second, third and fifth defendants.“

The Costs Judge’s Decision

On 15 August 2023, Siddiqi applied to strike out Rollerteam’s revised bill for non-compliance with the unless order. Following a hearing on 17 November 2023, Costs Judge Rowley granted the application, finding material non-compliance and striking out the bill entirely, assessing Rollerteam’s recoverable costs at zero.

The Costs Judge held that since only Rollerteam was seeking costs recovery, any work done for the defendants generally needed to be “divided appropriately so that only the costs for which the fourth defendant is liable are sought from the claimant.” He concluded that the bill failed to reflect “realistic sums that may be recoverable for one of five defendants” and that the costs draftsman had wrongly attempted to circumvent the apportionment requirement.

The Appeal

Rollerteam appealed to the High Court.

On 17 March 2025, Mr Justice Rajah allowed the appeal. The Judge held that Rollerteam had complied with the unless order by clearly identifying that all work was done jointly for multiple defendants and stating that it claimed 100% of that work for its own benefit (save for the specified 10% reduction).

More significantly, the Judge clarified the fundamental principle governing recovery of common costs in joint retainer cases. The correct approach is not to assume automatic apportionment based on the number of defendants, but to ask whether the common costs would have been reasonably incurred by the paying defendant in any event to defend itself from the claimant’s allegations.

Legal Principles Established

The judgment establishes several important principles:

  • Where defendants are represented under a joint retainer but only one party discharges the solicitors’ bills, that party is entitled to commence detailed assessment proceedings in its own name and recover the costs it has paid, without requiring participation from the non-paying co-defendants.
  • Common costs need not be divided between multiple beneficiaries of a costs order where those costs would have been necessarily incurred for the paying party’s own defence regardless of the number of co-defendants involved.
  • Following the principle established in Haynes v Department for Business, Innovation and Skills, costs such as court fees, conferences with counsel, and legal research that would have been incurred whether defending one client or multiple clients should be recoverable in full by the paying party.
  • Courts should interpret unless orders pragmatically, focusing on whether the required information has been provided rather than whether the claiming party’s approach appears “realistic” to the judge.

Practical Implications

For practitioners, the decision provides important guidance:

  • When preparing bills in multi-defendant cases, focus on explaining why common costs were necessary for the client’s own defence rather than attempting artificial mathematical apportionment between co-defendants.
  • Where representing the paying defendant in a joint retainer situation, emphasise that the question is not how many parties benefited from the work, but whether the costs would have been incurred in any event for that client’s own protection.
  • Ensure bills respond directly to the specific requirements of case management orders, but do not feel compelled to accept assumptions about apportionment that may not reflect legal principle.

Conclusion

Rollerteam Ltd v Siddiqi clarifies an area where costs practice has often been unnecessarily complex and provides welcome guidance for the many cases where multiple defendants share representation but only one party bears the financial burden. The decision confirms that the party who actually discharges solicitors’ bills under a joint retainer is entitled to recover those costs without artificial reduction, provided they were reasonably necessary for that party’s own defence.

The judgment serves as a reminder that costs recovery should be governed by practical realities and legal principles rather than superficial mathematical divisions that bear no relation to the work actually required or the liabilities actually incurred.

Costs Management Hearing | Unrealistic Budgets May Face Adverse Costs Orders

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Background

This legal judgment concerns a complex personal injury claim arising from a tragic road traffic accident that occurred on 31 March 2018 involving multiple parties. The primary claimant, Mr Leon Zavorotnii, a Moldovan resident in the United Kingdom, suffered severe and life-altering injuries when travelling as a passenger in a vehicle driven by Mr Lucasz Malinowski, both of whom were employed as night shift cleaners at the Norton Industrial Estate in North Yorkshire.

The accident transpired when Mr Malinowski’s VW Bora vehicle collided with a stationary Volvo HGV tractor and trailer parked roadside without illumination. Mr Malinowski subsequently pleaded guilty to driving without due care and attention, while the HGV driver, Mr Plamen Nikolov, pleaded guilty to allowing a vehicle to remain stationary during darkness without lights.

The proceedings were characterised by significant procedural complexity, notably including claims initiated outside the standard three-year limitation period. Judge Walden-Smith exercised discretion under Section 33 of the Limitation Act 1980 to allow the proceedings to continue against Mr Malinowski, recognising the substantial nature of the claim.

Mr Zavorotnii alleged extensive personal injuries, including skull and facial fractures, severe traumatic brain injury, dental damage, psychiatric and psychological trauma, sensory impairments, and potential long-term neurocognitive disabilities. These injuries were alleged to have comprehensively disrupted the claimant’s educational and professional prospects, potentially rendering him unable to live independently.

Costs Issues Before the Court

The primary costs issue centred on the approach to be taken regarding costs orders following a discrete costs management hearing. Specifically, the court was required to determine whether the standard “costs in the case” order was appropriate, or whether an alternative costs order might be justified given the parties’ conduct during costs budgeting.

The Parties’ Positions

The defendant, Mr Malinowski, argued that the court should depart from the conventional “costs in the case” order. He submitted that the claimant had presented an unrealistically high and ambitious costs budget, necessitating significant judicial intervention and time expenditure during the costs management process.

The claimant contended that the costs management hearing was routine and that the standard “costs in the case” order should be maintained. They suggested that any criticism of their costs budget should be limited to a cautionary “shot across the bow” for future proceedings.

The Court’s Decision

After careful consideration, Judge Walden-Smith determined that while the “costs in the case” order would be maintained in this instance, the judgment represented an important commentary on costs management practices. The court recognised that CPR 44.2 provides significant judicial discretion in costs orders.

The judgment highlighted that the claimant’s costs budget was significantly reduced from £511,125.30 to £308,909.30 – a reduction of £202,216 and representing only 60% of the original claim. While the claimant achieved some success by obtaining an 18.2% increase over the defendant’s offered budget, the court viewed the original budget as verging on being “unrealistic”.

Critically, the judgment warned that future costs management hearings might result in adverse costs orders against parties presenting manifestly inflated or unreasonable costs budgets. This represents a potentially significant development in judicial approach to costs management, signalling increased scrutiny and potential financial consequences for parties presenting excessive or poorly prepared cost estimates.

Danish Judgment Registration Order Upheld but Rendered Worthless on Appeal

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Background

The case of Olsen v. Finansiel Stabilitet A/S involved an appeal to the High Court of Justice, King’s Bench Division, concerning the registration of a Danish judgment for enforcement in England and Wales. The appellants, Birgitte Wagner Olsen and Karsten Olsen, challenged an order registering the Danish judgment and a supplemental order for costs assessed at £12,500. The appeal was heard on 10 and 11 December 2024, with Mr Justice Kerr delivering the judgment on 28 January 2025.

Costs Issues Before the Court

The primary costs issues before the court were threefold: first, whether the costs order made below should be altered; second, the costs of the appeal; and third, the form of the court’s order on the appeal. The parties disagreed on the impact of the Judgments Regulation on the recoverability of costs related to the registration of the Danish judgment, given that the registration order’s effect had expired.

The Parties’ Positions

The appellants argued that the costs order should be set aside because the limitation period had expired, rendering the judgment debt unenforceable. In contrast, the respondent contended that the costs order should remain intact, as the Danish judgment was validly registered and the costs of registration remained recoverable despite the expiry of the limitation period. Both parties claimed to be the successful party in the appeal and sought costs against the other.

The Court’s Decision

Mr Justice Kerr decided that the respondent’s submission on the costs order was preferable, maintaining that the costs of registering the Danish judgment were recoverable. However, he concluded that the appellants were, in substance, the successful parties in the appeal, as they secured an order rendering the registration worthless to the respondent. The court made no order for costs of the appeal, citing the appellants’ misconduct, including presenting a non-existent authority and filing unnecessarily prolix documents. The Master’s order for £12,500 in costs below was upheld.

CPR 36.17 | Claimant Beats Own Part 36 Offer Against “Intransigent” Police

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“…it was plain to me that the Claimant has suffered profound and enduring distress due to the Defendant’s officers’ failings. The Defendant’s intransigent conduct of these proceedings, contrary to the obligation on all parties to engage meaningfully with settlement possibilities, has compounded the failures that underpinned the Claimant’s claims. I have no difficulty in accepting that the Defendant’s conduct of the litigation has prolonged and exacerbated the Claimant’s distress. That is a relevant factor when the court is considering the use of compensatory powers in relation to interest.”

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Receiving Party Beating Its Own (Non Part 36) Offer Did Not Warrant Indemnity Costs Award

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“…the claimants’ offer is not, in my view, sufficient to make the order for costs (excluding the first day) one to be assessed on the indemnity basis. The offer could have been made via Part 36 which would almost inevitably have resulted in an indemnity basis order in accordance with CPR 36.17, but it was not couched in those terms. Instead, the claimants have to show that the defendants’ conduct was “out of the norm” to obtain an indemnity basis order. There is only a single paragraph in the claimants’ submissions on this point and it refers solely to the defendants’ conduct in relation to negotiations and offers.”

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