Costs Orders & Discretion Archives

Executors Lose Estate Indemnity After Hostile Removal Litigation

Indemnity Costs, New Costs Blog, Trustees & Estates

The High Court’s decision in Dorothy House v Helme [2026] EWHC 75 (Ch) confirms that executors who defend removal applications on their own behalf, rather than for the estate’s benefit, have no right to an indemnity from the estate for their litigation costs.

Background

The claim concerned the administration of the estate of Mary Organ, who died in December 2017. Her will appointed the first defendant, a solicitor employed by Richard T Bate & Co, and the second defendant, her first cousin once removed, as her executors and trustees [§7-9]. The estate was substantial, valued for probate at £4,717,302 net [§8]. The claimants, two charities, were the sole residuary beneficiaries.

The administration was characterised by significant delay. The defendants did not notify the claimants of their interest under the will; although this was not a breach of legal duty, it undermined the claimants’ confidence in the administration [§11, §14, §45, §56]. Instead, the claimants learned of their entitlement from a third party, Mr Outlaw, in August 2020, over two and a half years after the death [§11]. A grant of probate was not extracted until April 2022 [§11]. The defendants attributed the delays to complexities within the estate, including investigating lifetime gifts and dealing with the conduct of Mr Outlaw [§12-13].

A central issue arose concerning the sale of the main estate asset, Church Farm. In June 2024, an offer of £2.2 million was received from Simon Evans and his wife [§19]. Mr Evans was a first cousin once removed of the deceased, making him the second defendant’s second cousin [§7, §19]. Critically, Mr and Mrs Evans were also clients of the first defendant’s law firm, and the firm proposed to act for both the estate and the purchasers in the transaction [§19-21]. Despite repeated requests from the claimants from August 2024 onwards to re-market the property when the purchasers could not demonstrate available funds, the defendants persisted with the sale for approximately 18 months without putting the property back on the open market [§22-27, §65-67].

Frustrated by the lack of progress and concerned about conflicts of interest, the claimants’ solicitors wrote to the defendants on 13 August 2025, enclosing a draft consent order inviting them to step down without having to pay the claimants’ costs [§26]. This offer was refused. Following further correspondence, on 10 December 2025, the claimants threatened to apply for an injunction if undertakings to preserve estate assets were not provided by 11 December [§30]. No undertakings were given.

On 12 December 2025, the claimants issued proceedings seeking the removal of the defendants as personal representatives and the appointment of Stone King Trust Corporation Limited in their place [§1]. They simultaneously applied for an interim injunction to preserve the estate’s assets. Notably, on the morning of the same day, the defendants exchanged contracts for the sale of Church Farm without prior notice to the claimants [§32]. The defendants’ solicitors had stated in correspondence on 8 December that exchange would take place “at the beginning of next week” [§29, §68]. The court drew the inference that the sale was accelerated to avoid the possibility that an injunction would be granted on 15 December [§69].

The injunction application was heard on 15 December 2025. The defendants consented to an injunction preventing them from disposing of or diminishing estate assets, and directions were given for a disposal hearing [§34]. By the time of the disposal hearing on 7 January 2026, the defendants conceded that they should be removed and replaced [§4]. The contested issues before the court were therefore limited to costs.

Costs Issues Before the Court

Following the defendants’ concession on their removal, the court was required to determine three specific costs issues [§5]:

1. 1. Whether the defendants should be ordered to pay the claimants’ costs of the claim and the injunction application.
  2. If so, whether those costs should be assessed on the indemnity basis rather than the standard basis.
  3. Whether the defendants were entitled to an indemnity from the estate for their own legal costs and for any costs they were ordered to pay to the claimants.

These issues required the court to consider the defendants’ conduct both in the administration of the estate and in the litigation itself. The judge distinguished between these two categories of conduct in his analysis [§72].

The Parties’ Positions

The Claimants’ Position: The claimants argued that they were the successful parties and that the defendants should pay their costs [§72]. They contended that an award of indemnity costs was justified due to the defendants’ conduct in the litigation, which was “out of the norm” [§72]. This conduct included accelerating the exchange of contracts for the Farm after being put on notice of the injunction application, failing to serve evidence in a complete and timely manner, and unreasonably refusing earlier offers to step down without a costs order [§73].

Regarding the indemnity, the claimants submitted that the defendants were not entitled to an indemnity from the estate for any costs [§75]. They argued that the litigation was hostile, and the defendants had incurred costs in defending their own positions, not in acting for the benefit of the estate [§75].

The Defendants’ Position: The defendants did not dispute that the claimants were the successful party, but resisted an order for indemnity costs [§72-73]. Critically, they argued that they were entitled to a full indemnity from the estate for both their own costs and any costs payable to the claimants [§75]. They submitted that their opposition to removal was undertaken in what they believed to be the best interests of the estate, specifically to facilitate the sale of the Farm. They relied on the principle, acknowledged in Shufflebotham v Shuff-Wentzel [2025] EWHC 3321 (Ch), that any doubt should be resolved in favour of the fiduciary [§53].

The Court’s Decision

The court ordered the defendants to pay the claimants’ costs and made determinations on the specific issues as follows.

1. Liability for Costs and the Indemnity Basis: Applying CPR rule 44.2, the judge held that the claimants were the successful party and there was no good reason to depart from the general rule [§72]. The judge then considered whether to award costs on the indemnity basis, guided by Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hammer Aspden and Johnson [2002] EWCA Civ 879, which requires conduct or circumstances “out of the norm” [§54, §72].

The judge made clear that for this purpose he was not concerned with the defendants’ conduct of the administration as such; instead, he was looking simply at the claim and application made by the claimants, and the defendants’ conduct of their side of it [§72].

The judge found such conduct present [§73]. They had accelerated the exchange of contracts on the very morning they were served with the injunction application, having previously indicated exchange would occur “at the beginning of next week” [§68-69]. This was done without any plausible explanation and the court drew the inference that it was to avoid the possibility of an injunction [§69]. Furthermore, they had failed to serve their evidence completely by the agreed deadline and had served further evidence without permission [§35, §73]. Their refusal of more than one offer to retire without paying costs also contributed to this finding [§73]. The judge also noted that it may perhaps be that their solicitors did not have much experience of this kind of High Court litigation, but that was a matter between the defendants and their solicitors, and was not an answer to the claimants’ submission [§73]. Consequently, the defendants were ordered to pay the claimants’ costs on the indemnity basis [§73].

2. The Defendants’ Indemnity from the Estate: The judge analysed this issue by reference to the framework in Price v Saundry [2019] EWCA Civ 2261, the Trustee Act 2000, s.31(1), and CPR PD46, paragraph 1 [§50-53, §74].

There are two elements to the indemnity: first, that the expense was “properly incurred”; second, that it was incurred “when acting on behalf of the estate” [§74].

On the second element, the judge concluded that the defendants never incurred the costs of this litigation when acting on behalf of the estate [§76]. The character of the proceedings was hostile litigation from the outset. The defendants initially resisted removal vigorously, challenging all the claimants’ complaints about their behaviour and seeing no reason for their being removed [§76]. The fact that by 22 December 2025 they had offered to consent to removal (on terms including an indemnity) confirmed that they did not consider the estate’s best interests required their continuation in office [§75]. By the disposal hearing, they no longer opposed removal and were simply concerned to argue about costs and their indemnity [§75]. In these circumstances, the defendants were never entitled to an indemnity because they entered into and conducted the litigation on their own behalf, not on that of the estate [§76].

In the alternative, the judge held that even if the defendants had incurred the litigation costs on behalf of the estate, they would have been deprived of the indemnity because the costs were not “properly incurred” [§77]. Following Price v Saundry, “properly incurred” means “not improperly incurred”, and the right can be lost due to misconduct, which includes not only breach of duty but also unreasonable conduct [§50, §74].

The judge found the following misconduct in the defendants’ administration that was directly relevant to the litigation [§77]:

- - Inordinate and unjustified delay in selling the Farm, including taking an unjustified risk in waiting approximately 18 months for purchasers who did not have available funds [§58, §66-67];
  - Unauthorised self-dealing through the sale of estate machinery to the second defendant without seeking the claimants’ consent [§60];
  - Charging the estate at a professional solicitor rate for non-legal work, namely attending the Farm to water cattle [§61];
  - Placing themselves in a position of acute conflict of interest by allowing their solicitors to act for both sides in the Farm sale, without obtaining the claimants’ fully informed consent until over 15 months after the offer was made [§62-64].

This conduct amounted to breaches of duty and seriously unreasonable behaviour, more than mere mistake [§77]. Consequently, the defendants lost any right to an indemnity from the estate for their own costs or for the costs payable to the claimants [§77-78].

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Costs After Mixed Success In Multi-Claim IP Litigation | Applying The Three-Question Test

Commercial Litigation, Costs Against Successful Party, New Costs Blog, Payment on Account

The High Court’s decision in Getty Images (US), Inc & Ors v Stability AI Ltd [2025] EWHC 3419 (Ch) provides authoritative guidance on applying issue-based costs principles where a party loses overall but achieves commercial success on a standalone claim.

Background

The proceedings involved claims for trade mark infringement, secondary copyright infringement, and database rights infringement brought by six Getty Images entities against Stability AI Ltd. The claimants alleged that the defendant’s Stable Diffusion AI image-generation models infringed their intellectual property rights. A trial on liability took place. Shortly before closing submissions, the claimants abandoned three substantial elements of their claim: the Training and Development Claim, the Outputs Claim, and the Database Rights Infringement Claim [§3]. These abandoned claims were subsequently dismissed by order [§3].

The remaining live issues for determination were the Trade Mark Infringement Claim, a related Passing Off Claim, and a Secondary Infringement of Copyright Claim [§4]. In its judgment of 4 November 2025 ([2025] EWHC 2863 (Ch)), the court found that the claimants succeeded in part on the Trade Mark Infringement Claim in respect of Stable Diffusion Models v1.x and v2.x, leading to the defendant offering undertakings and submitting to an inquiry as to damages [§7, §42]. The court found it unnecessary to determine the Passing Off Claim [§4]. The defendant succeeded on the key issue of statutory construction in the Secondary Infringement of Copyright Claim [§4].

Following the substantive judgment, the parties were unable to agree on costs, leading to a separate hearing to determine that issue [§6]. Each side filed evidence, including analysis attempting to quantify the proportion of total costs attributable to the Trade Mark Infringement Claim [§12].

Costs Issues Before the Court

The central dispute was identifying the overall winner of the litigation for the purposes of costs, given the mixed outcome. This determination would govern the entitlement to ‘general costs’ – those not attributable to a specific issue [§27]. The specific costs issues for determination were:

1. 1. Whether the claimants or the defendant was the overall winner of the litigation.
  2. If the defendant was the overall winner, whether the Trade Mark Infringement Claim constituted a ‘suitably circumscribed issue’ on which it lost, warranting a departure from the general rule.
  3. If so, what costs order should be made in relation to that issue, considering the claimants’ partial success and failures within the claim.
  4. The appropriate percentage of total costs attributable to the Trade Mark Infringement Claim.
  5. Disputes regarding the interim payment on account of costs, specifically the rate to apply to out-of-budget interim application costs and the treatment of costs incurred by the defendant in excess of its approved budget [§63–74].

The claimants accepted that, on any analysis, they would be liable to pay the defendant’s costs for the claims on which they lost (the three abandoned claims and the Secondary Infringement claim), resulting in a net payment from claimants to defendant [§9].

The Parties’ Positions

The Claimants’ Position: The claimants contended they were the overall winner [§7]. They argued they had obtained substantive, valuable relief in the form of a finding of trade mark infringement, resulting in undertakings and an inquiry as to damages, which they could not have achieved without a trial [§7]. They submitted that the potential for a money transfer was the surest indicator of success, relying on AL Barnes Ltd v Time Talk (UK) Ltd [2003] EWCA Civ 402 [§19]. In the alternative, they argued that if there was no overall winner, general costs should be apportioned [§8]. Their fallback position was that even if the defendant was the overall winner, the Trade Mark Infringement Claim was a discrete issue on which the claimants had won, entitling them to their costs of that claim [§8]. They acknowledged that the issues within the trade mark claim were overlapping, making a more granular issue-based deduction impracticable [§48].

The Defendant’s Position: The defendant contended it was the clear overall winner [§11]. It had successfully defended four out of five main claims, with the claimants abandoning three significant claims very late [§33–34]. It argued that the claimants’ success on the Trade Mark Infringement Claim was extremely limited and historic, and that they had lost on many issues within that claim [§11, §50]. The defendant submitted that as the overall winner, it should recover all of its costs, including general and overlapping ‘marginal’ costs, relying on Monsanto v Cargill [2008] FSR 16 [§27–28]. It opposed any order requiring it to pay the claimants’ costs of the trade mark claim [§11]. On interim payments, it argued for a 70% rate on out-of-budget interim application costs and sought an interim payment for budget overspends, asserting there was good reason for the departure [§70–73].

The Court’s Decision

The court applied the well-established three-question approach from Hospira v Novartis [2013] EWHC 886 (Pat): (1) identify the overall winner; (2) determine if the winner lost on a suitably circumscribed issue; (3) decide if it is appropriate to make a costs order on that issue [§17].

On the first question, the court found the defendant to be the overall winner [§32]. Applying the test from Roache v News Group Newspapers Ltd [1998] EMLR 161 – “who, as a matter of substance and reality, has won?” – the court held that the defendant had substantially denied the claimants the success they sought [§18, §35]. The claimants had abandoned three substantial claims and lost on the Secondary Infringement claim [§33–34]. The relief obtained on the Trade Mark Infringement Claim, while valuable, did not outweigh the defendant’s success in substantially denying the claimants the wider injunctive relief and additional damages they had originally sought across multiple claims [§35–37]. The court rejected the suggestion that this was a “score draw” of the type identified in Vringo Infrastructure, Inc. v ZTE (UK) Ltd [2014] EWHC 4475 (Pat) [§40].

On the second question, the court held that the Trade Mark Infringement Claim was a suitably circumscribed issue [§42, §45]. It involved standalone causes of action, and the claimants had achieved a measure of commercial success, including undertakings and an inquiry [§42].

On the third question, the court considered it appropriate not merely to deprive the defendant of its costs of that issue, but to order it to pay a proportion of the claimants’ costs [§46]. The court reasoned that if viewed as a standalone claim, the claimants would have been the overall winner of the Trade Mark Infringement Claim, albeit with failures on several issues [§43]. To reflect justice, the defendant, as overall winner, would recover all general costs pursuant to Monsanto v Cargill [§41, §47], but the claimants should recover a portion of their costs specifically attributable to the trade mark claim [§46–47].

The court then had to quantify this. It rejected the claimants’ argument that they should recover 100% of the trade mark claim costs, as this would ignore their significant failures within that claim [§49]. These failures included losing on models SD XL, XL Turbo, and v1.6; infringement of the GETTY IMAGES mark for model v1.x; infringement of the iSTOCK mark for model v2.x; their main economic case; and their entire case under section 10(3) of the Trade Marks Act 1994 [§50]. In the absence of detailed evidence on apportionment, the court, using its knowledge of the trial, applied a 25% reduction to the claimants’ recoverable costs of the trade mark claim to reflect these failures [§54].

On the percentage of total costs attributable to the Trade Mark Infringement Claim, the court noted the parties’ widely differing estimates. The claimants originally calculated 26.3%, revised to 20.3% after stripping out general costs [§57–58]. The defendant calculated approximately 15% using a weighted mean [§58]. Doing the best it could, the court took a figure of 17.5% [§59]. Therefore, the defendant’s recoverable costs were reduced by 17.5% (the costs of that issue it could not recover) and by a further approximately 13% (representing 75% of the 17.5% attributable to the claimants’ costs) [§61]. This resulted in a total reduction of 30.6% from the defendant’s overall costs [§61].

The court stood back to assess whether the result reflected the overall justice of the case and concluded that it did [§62].

Interim Payment on Account

Regarding the interim payment, the court ordered [§63–74]:

- - Costs within the budget: 90% of budgeted costs and 70% of incurred costs [§63].
  - Out-of-budget interim application costs: an interim payment of 70%, rejecting the claimants’ submission that 50% was appropriate [§64–65].
  - Budget overspend: The court accepted the defendant was likely to establish ‘good reason’ for some overspend, particularly in pre-trial phases, due to the unprecedented case management, frequent pleading amendments, and evolving nature of the litigation [§71–73]. Adopting a cautious approach similar to that in Montres Breguet SA v Samsung Electronics Ltd [2022] EWHC 1895 (Ch), it awarded an interim payment of 20% of the claimed overspend of £394,985.31 [§74].

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Court Grants Non-Party Costs Order Against Secured Creditors Who Funded Failed Construction Claim

Commercial Litigation, New Costs Blog, Non-Party Costs

The Technology and Construction Court’s decision in Thomas Barnes & Sons PLC (In Administration) v Blackburn with Darwen Borough Council [2026] EWHC 24 (TCC) confirms that secured creditors who fund, benefit from, and exercise real control over administration litigation are properly treated as “real parties” for non-party costs purposes.

Background

The dispute originated from a contract for the construction of a bus station in Blackburn, entered into in 2014 between Blackburn with Darwen Borough Council (BBC) and Thomas Barnes & Sons Plc (Barnes). BBC terminated the contract in 2015. Barnes, by then in administration, subsequently issued proceedings in the Technology and Construction Court in 2020, claiming damages in excess of £3 million for alleged wrongful termination [§2].

The claim proceeded to an 11-day trial in July 2022. In a judgment handed down in October 2022, the claim was dismissed in its entirety [§2]. BBC, as the successful defendant, was entitled to its costs. The company in administration had no means to meet this costs liability.

The Respondents to the present application are Mr Thomas Barnes (Thomas), a former director and shareholder of Barnes, and Mrs Pamela Barnes, Mr Craig Barnes, and Mr Scott Barnes. The latter three are, respectively, the widow and the executors of the estate of Brian Barnes (Brian), Thomas’s late brother and co-owner of the company [§5]. The company’s administrators had been appointed in November 2015 by the Respondents in their capacity as debenture holders, to whom the company owed approximately £684,714.66 [§7].

From the outset of the litigation pursued in administration, the Respondents provided the funding for the company’s legal costs and disbursements [§11]. They also, following an application by BBC, provided security for BBC’s costs totalling approximately £583,000, comprising a payment into court of around £138,000 and charges over properties valued at around £445,000 [§24-25]. BBC’s incurred and budgeted costs at the time were around £995,000 [§25].

Following the dismissal of the claim, BBC sought to recover the shortfall in its costs by making an application under section 51 of the Senior Courts Act 1981 for a non-party costs order (NPCO) against the Respondents [§1, §3]. The application was heard on 12 December 2025.

Costs Issues Before the Court

The ultimate issue was whether it was just to make a NPCO against the Respondents, requiring them to pay BBC’s recoverable costs of successfully defending the claim, to the extent those costs were not satisfied by the security already provided. This required the court to determine several factual and legal sub-issues, including the degree of funding, control, and personal financial benefit derived from the proceedings [§29-36, §38-39].

The Parties’ Positions

BBC’s Position: BBC submitted that the Respondents were the real parties to the litigation. They had funded the claim entirely, thereby enabling it to be brought. They had a direct and substantial financial interest in its outcome as the primary secured creditors, standing to recover their debt from any successful award [§3]. Thomas, in particular, was alleged to have exercised a significant degree of control over the litigation, including introducing the solicitor (Ms Morrison) whom the administrators then instructed, attending the pre-action meeting where he was referred to as Ms Morrison’s “client,” and being intimately involved in its substance [§8, §14]. BBC argued it was just that those who stood to gain personally from the claim should bear the costs of its failure, rather than the public purse [§39].

The Respondents’ Position: The Respondents resisted the order. Thomas asserted that he did not control the litigation; his involvement was limited to providing necessary assistance to the administrators in his capacity as a former director [§12]. He stated that all decisions were made by the joint administrators. The Respondents acknowledged funding the claim and having a financial interest, but argued this was consistent with creditors funding an officeholder to realise assets for the benefit of the estate [§32]. They emphasised there was no evidence of impropriety or bad faith. They also pointed to the absence of any specific warning, after the 2016 and 2017 correspondence, that a NPCO would be sought, and noted they had already provided substantial security for costs, suffering significant personal loss [§26].

The Court’s Decision

The court granted the application and made a NPCO against the Respondents, jointly and severally liable for BBC’s recoverable costs, subject to the security already provided. The liability of Craig and Scott Barnes was limited to their capacity as executors of Brian’s estate [§45].

In reaching its decision, the court applied the principles from Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] UKPC 39 and Goknur Gida v Aytacli [2021] EWCA Civ 1037 [§28-36].

The key findings were:

Funding and Financial Interest: It was conceded and found as a fact that the Respondents funded the litigation and stood to benefit personally from its success [§40]. Although other creditors might have benefited if the claim succeeded spectacularly, the Respondents were the only guaranteed substantial beneficiaries [§40]. By the May 2022 progress report, payments of around £328,000 had already been made to them from other realisations, leaving around £357,000 due [§23]. Despite the reduced claim valuation — Barnes’s own quantity surveyor had by then assessed the maximum claim at only £1.789m against BBC’s valuation of around £604,000 [§22] — they continued to fund a costly trial.

Control of the Litigation: The court rejected Thomas’s assertion that he was merely assisting the administrators. Considering his introduction of the solicitor to the administrators [§14], his passionate belief in the claim [§8, §14], his attendance at every day of trial during which he “undertook active investigations” [§14], and the administrators’ reliance on his knowledge and funding, the court found he exercised “a real degree of control” alongside the administrators [§15, §41]. The court observed that the litigation “could not have continued” without Thomas’s substantial input on the claim’s substance and the Respondents’ willingness to finance it [§15]. For the other Respondents, while they did not themselves control the litigation, their willingness to fund it meant they supported Thomas’s pursuit of the claim [§16, §41].

“Real Party” Analysis: The court concluded the Respondents were “the real parties to the proceedings in very important and critical respects” [§42]. They were not pure funders but persons who funded, benefited from, and (in Thomas’s case) controlled the litigation for their own purposes. The court did not find impropriety or bad faith, but held that this was not required where funding, benefit, and control justified the order [§30-31, §42]. The court distinguished cases where a NPCO might discourage legitimate funding by officeholders, finding the Respondents’ position was fundamentally that of risk-taking litigants with a primary eye on their own financial recovery [§44]. The court expressly rejected the submission that making an NPCO in these circumstances would have a “chilling effect” on the ability of officeholders to fund justified claims [§44].

Other Factors: The court considered but attached limited weight to the lack of a specific post-2017 warning. It noted that as early as December 2016 and May 2017, BBC’s solicitors had written to the administrators’ consultants and then the administrators themselves, referring to the possibility of a NPCO and citing Deutsche Bank [§9-10]. The court found there was no compelling reason to believe this was not communicated to the Respondents, especially as they had not addressed these letters in their evidence [§10, §26]. The provision of security was a relevant but not determinative factor, and the negotiated amount did not preclude a further order [§43].

The court held that, in all the circumstances, justice required that the Respondents, who had sought to gain access to justice for their own substantial benefit, should bear the cost of the defendant’s successful defence, rather than the defendant (and ultimately the public) bearing the unrecovered shortfall [§39, §42].

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Third Party Costs Order

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Dos Santos Principles Considered | Trial Outcome Remains Relevant To Reserved Costs

Costs Against Successful Party, Indemnity Costs, New Costs Blog

The High Court’s decision in Gable Insurance AG v Dewsall & Ors [2025] EWHC 3399 (Ch) addresses the costs consequences of interim applications where a claimant succeeds against some defendants but fails against others, clarifying that Dos Santos v Unitel does not create an automatic rule that successful applicants recover their costs.

Background

The claimant, Gable Insurance AG (in liquidation) (“GIAG”), brought proceedings against four defendants: Mr William Dewsall (First Defendant), Mr Michael Hirschfield (Second Defendant), Mrs Judith Dewsall (Third Defendant), and Horatio Risk Consulting LLP (Fourth Defendant). Following a two-week trial in July 2025, judgment was handed down on 5 September 2025. A consequentials hearing on 27-28 November 2025 addressed numerous issues, with many rulings embodied in a sealed order dated 5 December 2025 [§2]. However, the costs of the claim against Mrs Dewsall and several reserved costs issues from interim applications required further determination [§3].

The reserved costs related to: (1) a worldwide freezing order against Mr Dewsall granted in July 2023 and continued in August 2023 [§3.1]; (2) a search order against Mr Dewsall, Mrs Dewsall, and Horatio in July 2024, with subsequent return date hearings and privilege issues in September 2024 and February 2025 [§3.2]; and (3) a second worldwide freezing order against Mr Dewsall, Mrs Dewsall, and Horatio granted in November 2024, continued in an amended form in January 2025, and replaced by a domestic freezing order in March 2025 [§3.3]. Mrs Dewsall had appealed unsuccessfully to the Court of Appeal against the domestic freezing order and was ordered to pay the costs of that appeal [§3.3].

Costs Issues Before the Court

The court was required to determine the appropriate costs orders for multiple discrete stages of the litigation. The specific issues were: (1) the costs of GIAG’s claim against Mrs Dewsall; (2) the reserved costs of the first worldwide freezing order application; (3) the costs of the search order application and its execution against each relevant defendant; (4) the costs of a contempt/bench warrant application related to the search order; and (5) the costs of the second worldwide freezing order application [§3-4].

A key legal context was the applicability of the Court of Appeal’s guidance in Dos Santos v Unitel [2024] EWCA Civ 1109 on costs for contested interim applications [§13-19]. The Chancellor observed that a party who contests an application “tooth and nail on every point” should generally be ordered to pay costs [§13]. However, the court noted Mr Justice Henshaw’s observation that Dos Santos does not lay down a “firm rule” that applicants always get their costs: where the respondent merely puts in economical evidence, the position may differ [§17].

The Parties’ Positions

GIAG’s Position: GIAG accepted Mrs Dewsall was the successful party on the main claim but argued for a 25-40% reduction in her costs due to alleged litigation misconduct, including failure to engage in ADR, filing an inadequate defence, and deficient disclosure [§21-23]. GIAG sought its costs of all interim applications. For the first freezing order and search order against Mr Dewsall and Horatio, it sought indemnity costs [§37, §43]. For the search order against Mrs Dewsall, it sought its costs on an indemnity basis, arguing the trial outcome was irrelevant following Dos Santos [§47, §49]. For the contempt application, it sought costs against Mr Dewsall [§70]. For the second freezing order, it sought costs against all defendants with a proposed 25% reduction to reflect failure to trace overseas accounts, primarily on an indemnity basis [§87-88].

Mrs Dewsall’s Position: Mrs Dewsall sought her costs of the main claim on the indemnity basis, with no reduction [§22]. She opposed paying any of GIAG’s costs for the search order or the second freezing order [§48]. Instead, she sought her own costs of those applications, also on an indemnity basis, citing alleged breaches of duty by GIAG in obtaining the orders and reliance on a discredited investigative report [§48, §89, §97]. She argued the principles in Dos Santos did not apply where costs had been reserved and she was ultimately successful at trial [§16].

Other Defendants: Mr Dewsall and Horatio did not appear or make representations on costs [§37, §43-44, §89].

The Court’s Decision

The court applied the discretion under CPR 44.2, with the general rule that the unsuccessful party pays costs [§6]. It considered when conduct might justify indemnity costs, applying the test of whether conduct takes the case “out of the norm” [§7].

1. Costs of GIAG’s Claim Against Mrs Dewsall

Mrs Dewsall was awarded all her costs of the main claim on the standard basis [§36]. The court rejected GIAG’s arguments for a reduction. The ADR complaint failed because the key correspondence focused on Mr Dewsall, and GIAG made no clear separate proposal to resolve the claim against Mrs Dewsall [§25-28]. The defence complaint was rejected as GIAG had itself opposed Mrs Dewsall’s late amendment application on the basis her existing pleading was sufficient [§29]. The disclosure deficiencies were more appropriately factored into the search order costs [§31]. The allegations about assisting Mr Dewsall to circumvent the first freezing order were left for a potential separate claim [§32-33]. An indemnity basis award was refused as complaints about GIAG’s conduct were better considered within the specific interim application costs [§35].

2. First Worldwide Freezing Order (Mr Dewsall)

GIAG was awarded its reserved costs against Mr Dewsall on the indemnity basis [§40-42]. The order was successfully obtained and continued, subject to undertakings [§38]. Indemnity costs were justified because Mr Dewsall’s subsequent failure to disclose assets, uncovered via the search order, took his conduct “out of the norm” [§42].

3. Search Order Costs

The search order costs (excluding the bench warrant application) totalled approximately £4.8 million, comprising: obtaining the order (£410,000), executing the search (£850,000), and subsequent review of materials including privilege analysis (£3.56 million) [§43].

Mr Dewsall: Ordered to pay GIAG’s costs on the indemnity basis [§45]. This was due to clear evidence of destruction and concealment of documents, obstruction of the search, and threats against individuals carrying out the search [§45].

Horatio: Ordered to pay GIAG’s costs on the standard basis [§46]. Its complete non-engagement did not, of itself, justify indemnity costs; the court was not referred to any authority supporting that proposition [§46].

Mrs Dewsall: No order as to costs between GIAG and Mrs Dewsall [§69]. The court held it would be unjust to order her to pay costs for an exercise primarily targeting Mr Dewsall — over 90% of documents recovered belonged to him [§54]. GIAG’s own costs schedules showed search order work being incurred in March 2024, before Mrs Dewsall was even joined as a party [§55]. Had the claim been against her alone, any perceived inadequacy in disclosure would more likely have been addressed by specific disclosure application rather than a search order [§53].

Conversely, GIAG was not ordered to pay Mrs Dewsall’s costs because her initial disclosure was inadequate — over 1,000 previously undisclosed documents were found on her devices [§53, §63]. She also bore some responsibility for the blanket assertion of privilege (made by Mr Dewsall purportedly on behalf of both defendants) that increased costs [§58-59, §65].

4. Contempt Application/Bench Warrant

Mr Dewsall: Ordered to pay 50% of GIAG’s costs on the standard basis [§76]. The 50% reduction reflected the court’s view that seeking a bench warrant was “somewhat precipitate” and a “heavy handed and inappropriate” mechanism for securing compliance with the search order [§74, §76]. The court noted that Mr and Mrs Dewsall had been in court the same day for separate possession proceedings and believed the search team had come to evict them [§77]. Indemnity costs were refused as Mr Dewsall would be “punished twice for the same offence” if indemnity costs were awarded given other indemnity costs orders [§78].

Mrs Dewsall: No order as to costs [§79-80]. The evidence showed Mr Dewsall took the lead in refusing access [§73, §79].

5. Second Worldwide Freezing Order

The application was primarily triggered by a belief that Mr Dewsall had overseas accounts, based on an investigative report [§83-84]. When GIAG attempted to enforce the worldwide freezing order in various jurisdictions, none of the accounts existed [§84]. A BVI court was subsequently highly critical of the report, finding the investigator had no personal information about the accounts but only hearsay evidence [§86].

Mr Dewsall: Ordered to pay 50% of GIAG’s costs on the indemnity basis [§91, §93]. The 50% reduction reflected GIAG’s failure to establish overseas accounts. Indemnity costs were justified by Mr Dewsall’s conduct: failing to disclose assets, failing to account for expenditure in breach of the first freezing order, and attempting to avoid service by denying he was Mr Dewsall [§92-93].

Horatio: Ordered to pay 50% of GIAG’s costs on the standard basis [§95].

Mrs Dewsall: A cross-order was made [§104, §108-109]. She was ordered to pay 50% of GIAG’s costs on the standard basis, applying Dos Santos as she had fought the application and appealed unsuccessfully to the Court of Appeal [§96, §104]. However, GIAG was ordered to pay 50% of Mrs Dewsall’s costs on the indemnity basis [§108-109]. This reflected the court’s finding that it “ought to have been apparent” to GIAG by the return date hearing in February 2025 that the investigative report was unreliable, following questions raised at the January 2025 hearing [§111-112]. GIAG’s failure to recognise this was unreasonable and took its conduct “sufficiently outside the norm” to justify indemnity costs [§112].

The court directed that where costs orders were mutual, they should be set off [§125]. Interest on costs and payments on account were to be agreed or determined subsequently, along with the disposal of proceeds from Weald Hall held in court [§126-129].

This judgment establishes an important qualification to Dos Santos:

If you contest and lose an interim application → expect to pay costs (per Dos Santos)
If costs are reserved (whether by consent or court order) → the trial judge considers overall justice including trial outcome
If you are a successful defendant and the application primarily targeted another party → you may escape a costs order entirely
If you are an applicant relying on evidence later discredited → you risk indemnity costs against you

CPR 44.10 | The Sound of Silence | When A Court Order Is Silent As To Costs

Indemnity Costs And The High Risk Of Pursuing A Weak Case

Costs Thrown Away, Indemnity Costs And Payments On Account

Group Litigation: A Determination Of Costs Related To Common Issues

CPR 44.2 And The Courts’ Discretion As To Costs

Dishonest Evidence And Baseless Allegations Justify Indemnity Costs Order

High Court Preserves Indemnity For Unsuccessful But Honest Executor Removal Applicants

Costs Against Successful Party, New Costs Blog, Trustees & Estates

The High Court’s decision in Shufflebotham v Shuff-Wentzel [2025] EWHC 3321 (Ch) confirms that trustees who bring an honest and reasonable application may retain their indemnity to recoup costs from the estate, even when ordered to pay the successful party’s costs personally.

Background

The case concerned an application made by two of the three executrices and trustees of the estate of Alan Shufflebotham (deceased), the claimants, for their replacement and for the removal and replacement of the third executrix and trustee, the defendant. The application was heard on 14 August 2025, resulting in an ex tempore judgment. The claimants were unsuccessful in their bid to remove the defendant from her office. However, they were permitted to resign (which was unopposed), and the court ordered the appointment of a professional executor and trustee to act alongside the defendant and a lay representative from the first claimant’s branch of the family. The claimants had originally proposed Mr Taylor as the professional trustee, but he subsequently withdrew his consent to act and another professional was appointed.

A significant procedural feature was that the defendant had substantially changed her position only nine days before the hearing. Until a fairly late stage — and in any event until her without prejudice save as to costs offer of 5 August 2025 — the defendant had opposed the appointment of Mr Taylor without providing any proper reason and had proposed either that she continue alongside a lay trustee or that a different professional trustee of her own choosing be appointed. The 5 August offer proposed that Mr Taylor replace all parties as sole executor to complete the administration of the estate, with the defendant and Mr Taylor then becoming the trustees of the testamentary trust. Acceptance of that offer would, as the judge later held, have left the first claimant’s branch of the family entirely unrepresented on the trust.

Following the substantive decision, the question of costs was disputed. The court determined that the claimants were entitled to their own costs from the estate under their trustee indemnity and that the defendant, as the overall successful party, was entitled to her costs of the application. However, significant disagreement remained over whether the defendant’s costs should be paid by the claimants personally or directly from the estate, and whether the claimants could recoup any personal liability via their indemnity. The court invited sequential written submissions on these issues, received on 23 September 2025 for the claimants and 9 October 2025 for the defendant.

Costs Issues Before the Court

The court was required to determine two distinct but related costs issues. The first was whether the defendant’s costs should be paid by the claimants personally or directly from the assets of the estate. The second, contingent on the first, was whether the claimants, if ordered to pay the defendant’s costs personally, should be permitted to recoup that outlay from the estate pursuant to their trustee indemnity.

The Parties’ Positions

The claimants, represented by Mr Perrin, argued that the case did not fit neatly into the conventional categories of trust litigation. They submitted it was more akin to a ‘trust dispute’ brought for the benefit of the estate to break a deadlock, rather than hostile litigation. They contended that as the application was necessary and brought reasonably in the execution of their duties, the defendant’s costs should be paid from the estate. In the alternative, if the claimants were ordered to pay personally, they argued they should be entitled to indemnify themselves from the estate, as their conduct was not improper. Distinction was also sought for the second claimant, who was not a beneficiary and was said to have played a neutral role, merely seeking her own removal.

The defendant, represented by Mr Poole, argued the proceedings were a hostile ‘beneficiaries dispute’ where costs should follow the event against the unsuccessful party personally. She submitted the claimants’ primary aim was her removal, which constituted hostile litigation. She further contended that the claimants had acted unreasonably by ignoring pre-action proposals, advancing overblown criticisms, and rejecting her reasonable settlement offer made on 5 August 2025. On this basis, she argued the claimants should not only pay her costs personally but should also be denied the right to recoup those costs from the estate via their indemnity.

The Court’s Decision

The court held that the defendant’s costs should be paid by the claimants personally, but that they were entitled to recoup those costs from the estate under their indemnity. In reaching this conclusion, the judge applied the principles summarised by Asplin LJ in Price v Saundry [2019] EWCA Civ 2261 and the traditional categories from Re Buckton [1907] 2 Ch 406.

On the character of the proceedings, the judge found that while the case did not fall squarely into one category, it was closest to a ‘beneficiaries dispute’. The central purpose of the claimants’ application was the removal of the defendant against her will, which was properly characterised as hostile litigation. Consequently, the correct order was for the unsuccessful claimants to pay the successful defendant’s costs. The judge rejected the argument that the second claimant should be treated differently, noting she had chosen to join the joint application, was represented by the same lawyers, advanced the same evidence, and had not distinguished her position until the costs submissions.

On the indemnity issue, the court found no basis to deprive the claimants of their right to recoup the costs from the estate. The judge held that bringing the application was a reasonable step to address a genuine deadlock in the administration of the estate. The claimants had acted honestly and not for their own personal benefit or for the benefit of one group of beneficiaries over another. While some criticisms of the defendant were exaggerated, trustees — particularly lay trustees — were not to be held to a standard of perfection. The rejection of the defendant’s 5 August offer was not unreasonable, as accepting it would have left one branch of the family unrepresented on the trust, an outcome the court itself later deemed inappropriate. Applying the principle from Lewin on Trusts that doubts should be resolved in favour of trustees, the judge ordered that the claimants’ right of indemnity remained intact.

The final order was that the claimants were jointly and severally liable for the defendant’s costs, but were entitled to call upon their indemnity from the estate in respect of that liability.

Trustees Who Fail To Provide Trust Disclosure To Beneficiary Face Adverse Costs On Discontinuance

Failure To Mediate And Validity Of Part 36 Offers In Probate Claims

CPR 44.2(8) | No Restriction To Ordering A Payment On Account

CPR 44.2 And The Courts’ Discretion As To Costs

Co-Claimants Pursuing Common Case Face Joint And Several Liability For Adverse Costs

Costs In Discontinued Judicial Review | When A Change Of Government Breaks The Causal Chain

Costs on Discontinuance, Judicial Review Costs, New Costs Blog

The Court of Appeal’s decision in R (Public and Commercial Services Union) v Secretary of State for the Home Department [2025] EWCA Civ 1644 upholds a ‘no order as to costs’ determination where a judicial review became academic following a change of government that was already publicly committed to repealing the challenged legislation.

Background

The Public and Commercial Services Union (PCSU) challenged the lawfulness of the Strikes (Minimum Service Levels: Border Security) Regulations 2023. These regulations empowered the Secretary of State for the Home Department to serve “work notices” on trade unions, requiring them to take “reasonable steps” to ensure specified border staff did not participate in strikes [§3]. Failure to comply meant the union would lose immunity from tort liability, while non-complying members would lose statutory protections from detriment and dismissal [§4].

PCSU issued a pre-action protocol letter on 17 January 2024, arguing the regulations unlawfully interfered with Article 11 ECHR rights and inviting their withdrawal [§5]. The then-Conservative government defended the lawfulness of the regulations in its response dated 15 February 2024 [§7]. PCSU issued judicial review proceedings on 5 March 2024 [§8], with permission granted by Holgate J on 8 May 2024 in respect of two grounds, both based on Article 11 ECHR [§10]. The defendant filed detailed grounds maintaining its defence on 26 June 2024 [§12].

The context changed following the general election on 4 July 2024, which resulted in a Labour government [§13]. The Labour Party had, while in opposition, opposed the underlying 2023 Act and the regulations, pledging to repeal them [§6, §11]. On 6 August 2024, the Minister for Migration and Citizenship wrote to PCSU confirming the new administration’s belief that the 2023 Act “unduly restricts the right to strike” and pledged to repeal it via the forthcoming Employment Rights Bill [§15]. The letter confirmed that, although the legal power remained until repeal, the Home Secretary would not exercise the power to issue work notices in the interim [§15].

The following day, the Government Legal Department wrote stating the claim had become academic and inviting discontinuance. It also stated that the Home Secretary would not agree to pay PCSU’s costs, since PCSU had “not demonstrated that the claim has become academic by virtue of the legal merits of the case” [§16]. The parties agreed to discontinue the claim, with the ordinary costs consequences of discontinuance disapplied by consent, leaving the issue of costs for the court’s determination based on written submissions [§17].

Costs Issues Before the Court

The sole issue for HHJ Jarman KC at first instance, and subsequently the Court of Appeal, was the appropriate costs order following the discontinuance of the judicial review claim after it became academic due to a change of government policy. PCSU sought its costs on the basis it had been “wholly successful” in obtaining what it sought, namely the repeal of the MSL Regulations [§18]. The Secretary of State resisted any costs order, contending the claim had “become academic for political reasons, rather than for reasons connected with the merits of the claim” [§19]. The Respondent did not file any witness evidence in support of this assertion [§19]. The court had to determine whether, in these specific circumstances, PCSU was the “successful party” entitled to its costs, or whether the lack of a causal link between the claim and the outcome warranted a different order.

The Parties’ Positions

The Appellant’s (PCSU’s) Position: PCSU argued it had been “wholly successful” in obtaining what it sought via the litigation [§18]. It contended that the minister’s letter, which described the regulations as “unduly restrictive,” amounted to an acknowledgment that the claim was soundly based in law. It submitted that the authorities did not place an evidential burden on a claimant to prove the defendant’s concession was caused by the litigation [§40]. Relying on the line of authority beginning with R (Bahta) v SSHD, PCSU argued that a defendant could no longer avoid costs by asserting “pragmatic” settlement reasons without clear evidence [§40]. It emphasised the constitutional continuity of government, submitting that the new administration could not be “absolved of [legal] responsibility for the acts of the previous administration” [§39].

The Respondent’s (Secretary of State’s) Position: The respondent accepted that where it is “tolerably clear” a claimant would have won at trial, they would usually be entitled to costs, but pointed out (correctly) that it had not been suggested that the judge should have made an order for costs on that basis in this case [§41]. The respondent’s central contention was that the claim became academic for extrinsic political reasons following a change of government, not because of the claim’s legal merits. It argued that a causal link between the claim and the relief obtained was required, citing Speciality Produce Ltd, ZN (Afghanistan), and Parveen [§41]. It submitted that the clear pre-election pledge to repeal the Act meant the outcome would have happened anyway, irrespective of the litigation.

The Court’s Decision

The Court of Appeal (Bean LJ, with whom Peter Jackson and Elisabeth Laing LJJ agreed) dismissed the appeal, upholding HHJ Jarman KC’s order of no order as to costs [§48–50]. The court’s analysis focused on the principles governing costs in settled judicial review claims and the critical issue of causation.

The court reiterated the high threshold for appellate intervention in costs matters, as set out in Roache v News Group Newspapers Ltd: before the court can interfere, it must be shown that the judge erred in principle, left out of account or took into account some feature that should or should not have been considered, or that the decision was wholly wrong [§22]. It then applied the principles from the seminal case of R (M) v Croydon LBC, noting that where a claimant obtains substantially all relief sought (a “type (i)” case), it is hard to see why they should not recover all costs absent a good reason [§26]. However, the court emphasised that subsequent authorities, including Speciality Produce, R (RL) v Croydon, ZN (Afghanistan), and Parveen, establish that causation is a “relevant and sometimes decisive factor” [§36]. A claimant must show that the litigation caused or contributed to the result; it is not enough that the desired result occurred if it “would have happened anyway” [§47].

The court accepted PCSU’s constitutional continuity argument in principle, agreeing that an incoming government “cannot be absolved of [legal] responsibility for the acts of the previous administration” [§43]. However, it found that was not what the Government was asserting in this case [§43].

The court also accepted that R (Bahta) and M v Croydon represented an important change in attitude, meaning defendants can no longer escape costs by citing “purely pragmatic reasons” for settlement [§44]. In the typical case where a public body agrees to reconsider a challenged decision following issue of proceedings, and there is no dispute about causal link, the claimant will generally be entitled to costs [§44].

However, the court rejected PCSU’s characterisation of the minister’s letter as a legal admission [§46]. It found the phrase “unduly restrictive” simply reflected the new administration’s long-held political view, not a concession that the regulations were unlawful or that the claim would have succeeded at trial. The court held that the letter “cannot be read as if it said” something akin to an admission that the High Court would have found a breach of Article 11 rights or that the interference exceeded the margin of appreciation [§46].

It had, realistically, not been suggested on behalf of PCSU that this was a case which the Union would clearly have won at trial. The court observed that “Article 11 cases have not usually resulted in easy victories for claimants, either in our domestic courts or at Strasbourg” [§45]. The question therefore turned on whether the bringing of the claim made a difference to the outcome, either by changing the decision which would otherwise have been taken or at least achieving the desired result more quickly than would otherwise have occurred [§45].

The court agreed with the respondent that the commitment of the Labour Party to repeal the restrictions was so clear that there was good reason to believe it would have come about in any event, even if PCSU had not issued its claim [§47]. Using the terminology of Singh LJ in ZN (Afghanistan), the outcome was achieved for an “extrinsic reason”; or in the words of Males LJ in Parveen, it “would have happened anyway” [§47]. As in R (RL) v Croydon, the claimant got what it wanted, but had not shown it got what it wanted, or even got it more quickly, because of issuing the claim [§47].

The court characterised this case as “quite close to the borderline” but was not satisfied that HHJ Jarman KC made any error of principle or error of law which would justify overturning his exercise of discretion [§48]. His concise reasoning—that the claim became academic for political reasons after a change of government, not because of the claim—was sufficient and disclosed no error of principle [§42]. The appeal was therefore dismissed.

Costs In Settled Immigration Judicial Reviews | Nisar v SSHD

Costs In Withdrawn Judicial Review Claims | R (Parveen) v Redbridge LBC

CPR 44.2 And The Courts’ Discretion As To Costs

CPR 38.6: Discontinuance And Costs – The Legal Principles

Summary Determination Of Costs Without A Trial

Costs In Settled Immigration Judicial Reviews | “Will Be Made” Creates A Legal Obligation; “Aims To Issue” Does Not

Costs on Discontinuance, Judicial Review Costs, New Costs Blog

The Court of Appeal’s decision in R (Nisar and Others) v SSHD; R (Mammedov) v SSHD [2025] EWCA Civ 1646 confirms that the precise language of Home Office deadline commitments determines whether a legal obligation is created, with direct consequences for costs recovery in settled immigration judicial reviews.

Background

The appeals concerned two separate judicial review claims against the Secretary of State for the Home Department (SSHD), which were heard together. In both, the appellants were foreign nationals living outside the UK whose applications for entry clearance as visitors had been refused. Following pre-action correspondence, the SSHD in each case agreed to withdraw the challenged decision and make a new one, indicating a timeframe for doing so. The fresh decisions were made shortly after the indicated dates and were again refusals. In the interim period between the deadline passing and receiving the decision, each appellant commenced a claim for judicial review challenging the delay. These claims were discontinued by consent once the decisions were received. The sole remaining dispute was over costs [§1–5].

In the case of Nisar, the appellants (a mother and her four children, all Pakistani nationals) had a protracted history of refusals and reconsiderations [§6–8]. In a letter dated 25 July 2023, the SSHD stated that “a decision regarding your client’s UK visitor visa will be made by the 21/08/2023, absent special circumstances” [§11]. The decision to refuse was made on 22 August but not served until 23/24 August 2023 [§12–13]. The judicial review claim had been lodged on 22 August 2023, the same day the decision was made but before it was communicated [§12, §16]. The parties agreed to discontinue the claim, leaving costs to be determined. Upper Tribunal Judge Sheridan made no order as to costs, finding both parties’ conduct contributed to the unnecessary proceedings [§16].

In the case of Mammedov, the appellant was a national of Turkmenistan who had been living in Turkey as a student since 2016 [§19]. The SSHD’s letter of 20 December 2024 stated that “Barring complexities, the SSHD aims to issue a reconsidered decision on your client’s visit visa application within 3 months of the date of this response to your letter before claim (by 20 March 2025, absent special circumstances)” [§20]. A reminder email was sent on Sunday 16 March 2025, warning that proceedings would be issued if no decision was made by the deadline [§22]. No decision was made by 20 March, and proceedings were issued on 21 March 2025 [§23]. A refusal decision was made on 28 March 2025 [§24]. The claim was discontinued by consent. Upper Tribunal Judge Hirst also made no order as to costs, citing the appellant’s failure to comply with the Pre-Action Protocol regarding the new issue of delay [§27].

Costs Issues Before the Court

The central costs issue in both appeals was whether the Upper Tribunal judges had erred in their discretion by making no order as to costs, rather than awarding costs to the appellants as the successful parties. The legal context was the settlement of judicial review proceedings before a substantive hearing, where the defendant public authority provides the substantive remedy (a decision) after proceedings are issued. The court was required to apply the principles from R (M) v Croydon LBC [2012] EWCA Civ 595 and related authorities to determine if the appellants could be considered “successful” and whether there was a sufficient causal link between the issued claim and the obtaining of the decision to justify a costs order in their favour [§30–36].

The Parties’ Positions

The appellants argued they were the successful parties as they obtained the remedy sought—a decision on their application—as a result of issuing proceedings. In Nisar, it was submitted that the SSHD’s unequivocal commitment to decide by a specific date created a legal obligation, the breach of which reasonably triggered litigation [§17]. The judge’s conclusion that the appellants should have chased for a decision was irrational. In Mammedov, the appellant argued the reminder email of 16 March was sufficient compliance with the Pre-Action Protocol, and a further formal letter was not required given the SSHD’s prior commitment and failure to act [§28].

The respondent SSHD opposed the appeals. It argued that in neither case were the appellants “successful” in a relevant sense, as the eventual decisions were refusals. It contended there was no, or insufficient, causal link between the issued claims and the decisions being made. In Mammedov, the SSHD supported the judge’s finding that a fresh Pre-Action Protocol letter was required to complain about the delay, a new issue not raised in the earlier correspondence.

The Court’s Decision

The Court of Appeal allowed the appeal in Nisar but dismissed the appeal in Mammedov. Applying the principles from R (M) v Croydon, the court held that the exercise of discretion on costs could be interfered with only if the judge erred in principle, considered irrelevant matters, or the decision was wholly wrong [§30].

In Nisar, the court found the claim fell squarely within category (i) of M v Croydon (where a claimant is wholly successful) [§48]. The SSHD’s letter of 25 July 2023 was sufficiently clear to amount to a legal obligation to decide by 21 August 2023, even if it was not an “enforceable undertaking” in the sense of being subject to specific performance or committal [§46]. The breach of that obligation, without citing special circumstances, made the issuance of proceedings reasonable. The court rejected the Upper Tribunal’s view that the appellants should have contacted the SSHD first, noting the unequivocal nature of the commitment [§46]. The claim was causative of the relief because, without the threat of litigation backed by the deadline, the delay would have been greater [§47]. The SSHD was therefore ordered to pay the appellants’ costs of the brief period up to the compromise [§48].

In Mammedov, the court found no error in the judge’s exercise of discretion [§49–50]. The SSHD’s letter used the language “aims to issue,” which did not create a legal obligation akin to the promise in Nisar [§49]. The issue of delay had not been raised in prior pre-action correspondence, and the delay had not reached the stage where it was so excessive as to be manifestly unreasonable [§49]. The Upper Tribunal was entitled to conclude that raising this new issue via a proper Pre-Action Protocol letter before issuing proceedings was reasonable and in accordance with the overriding objective. The failure to do so constituted a good reason to depart from the general costs rule [§49].

The court emphasised that Patten LJ’s statement in Speciality Produce Ltd v Secretary of State for the Environment [2014] EWCA Civ 225—that the claim “must be causative of the relief obtained”—was not to be treated as a statute nor as imposing a strict causation test in every case [§47]. The different outcomes in the two appeals turned on their distinct factual matrices, particularly the nature of the SSHD’s commitment and the reasonableness of commencing proceedings without further pre-action steps.

Costs In Withdrawn Judicial Review Claims

CPR 44.2 And The Courts’ Discretion As To Costs

CPR 38.6: Discontinuance And Costs – The Legal Principles

Summary Determination Of Costs Without A Trial

Who Should Pay The Costs Of A Withdrawn And Undetermined Application?

No Order As To Costs Despite Successful Application | Novelty And Conduct Considered

Consent Orders Settling Quantum Constitute ‘Judgment’ For CPR 36.17 Purposes

Actions Against Police, Indemnity Costs, New Costs Blog, Part 36

The High Court’s decision in Thomas v Secretary of State for the Home Department [2025] EWHC 3274 (KB) confirms that consent orders settling damages claims trigger the costs consequences under CPR 36.17.

Background

The claimant, Michael Anthony Thomas, a Jamaican national, brought proceedings against the Secretary of State for the Home Department for unlawful detention during early 2020. Following a contested hearing, judgment on liability was given on 22 November 2024, finding that the claimant had indeed been unlawfully detained for a period [§1]. The issue of quantum was adjourned for further submissions but was subsequently agreed between the parties [§2].

On 23 July 2025, a consent order was agreed [§3]. It recorded the defendant’s agreement to pay the claimant £16,000 in full and final settlement of his claim for damages, with the issue of legal costs remaining unresolved. The order provided a timetable for written submissions on costs, to be determined by the court without a hearing. Prior to the liability trial, the claimant had made four Part 36 offers, all for sums lower than the eventual £16,000 settlement figure [§5].

Costs Issues Before the Court

The primary issue for determination was whether the costs consequences under CPR 36.17 were triggered by the settlement [§6]. The rule provides enhanced costs consequences for a claimant who obtains a judgment at least as advantageous as their own Part 36 offer. The settlement sum of £16,000 exceeded all the claimant’s previous Part 36 offers. The dispute centred on whether a settlement encapsulated in a consent order constituted a “judgment” for the purposes of engaging CPR 36.17, or whether the rule required a formal judgment following a contested trial.

The Parties’ Positions

The Defendant’s Position: Counsel, Mr Gwion Lewis KC, argued that CPR 36.17 was not engaged [§7]. He relied on the rule’s title, “Costs consequences following judgment”, and its wording which refers to consequences applying “upon judgment being entered”. He submitted that the term “judgment” connoted an independent judicial decision on damages following a contested hearing [§8]. A settlement, even one embodied in a court order approved by a judge, was not a “judgment” and therefore the automatic costs consequences of Part 36 did not apply.

The Claimant’s Position: Counsel, Mr Gordon Lee, contended that the compromise contained within a sealed court order was equivalent to a judgment being entered [§9]. He argued this was merely a semantic difference. In support, he referred the court to the Court of Appeal authority of Vanden Recycling Ltd v Kras Recycling BV [2017] EWCA Civ 354 [§10], which considered the effect of a consent order in the context of claims against concurrent tortfeasors.

The Court’s Decision

The court found in favour of the claimant, holding that the true effect of the consent order of 23 July 2025 was to enter judgment in favour of the claimant in the sum of £16,000 [§15]. The court applied the reasoning from Vanden Recycling, where the Court of Appeal had focused on the substance and effect of a consent order rather than its precise wording [§12]. Hamblen LJ had stated that if an order requires a defendant to pay a specified sum in respect of the claimant’s claims and is a final order, then “in substance and in effect” it is the same as an order made following a judgment.

The court concluded that the mere fact that the word “judgment” did not appear in the consent order was of no consequence when considering the order’s effect [§13]. Indeed, an order made by the court following a trial could have been drafted in precisely the same terms. The consent order was enforceable in precisely the same way as if the court had awarded damages to the claimant at the end of the trial [§15]. This interpretation was supported by commentary in the White Book to CPR 40, which noted that the Civil Procedure Rules provide no clear basis for distinguishing between the terms “judgment” and “order” [§14].

The court recorded that the defendant had not argued it would be unjust in all the circumstances for the Part 36 costs consequences to apply, and the court observed there would be no reasonable basis for such a finding [§16].

As the settlement sum was more advantageous than the claimant’s Part 36 offers, the costs consequences under CPR 36.17 were engaged. The court accepted that the usual costs consequences should run from 8 November 2021, being 21 days after the first Part 36 offer of £15,000 [§17]. The court stated that the resulting order would follow the claimant’s written proposal (paragraph 10 of Mr Lee’s submissions), subject to two modifications: the interest rate on costs was set at 7%, and the claimant was required to bear the costs of the application dated 9 May 2025 to adduce a witness statement [§18].

Part 36 Consequences CPR 36.17 | Learning Curve v Lewis

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

CPR 36.17(4) | Just Consequences | Court Of Appeal Decision

CPR 36.17 | Part 36 Offer To Accept £1 Was A Genuine Attempt To Settle

CPR 36.17(4) And The Sometimes ‘Unjust’ Consequences Of Part 36

A costs-inclusive “Part 36 Offer” is NOT a Part 36 Offer

Co-Claimants Pursuing Common Case Face Joint And Several Liability For Adverse Costs

Costs Budgeting & CMC, New Costs Blog, Non-Party Costs

The High Court’s decision in Baroness Lawrence of Clarendon OBE & Ors v Associated Newspapers Limited [2025] EWHC 3207 (KB) confirms that claimants combining to pursue a common factual case may face joint and several liability for the defendant’s common costs, with significant implications for ATE insurance structuring in multi-party litigation.

Background

A group of seven high-profile individuals, including Baroness Lawrence, Sir Elton John, and Prince Harry, the Duke of Sussex, brought separate claims against Associated Newspapers Limited (the Defendant). Their individual claims have been case managed together and are heading towards a combined trial of all issues in all claims [§11]. A key feature of the litigation was that each claimant relied not only on allegations specific to them but also on a substantial body of similar fact and generic allegations common to all claims. Each claimant’s pleading expressly relied on the common allegations as a “modus operandi” supporting their individual case [§10].

At a costs and case management conference (CCMC) in November 2024, the court made an order that included definitions for ‘Individual Costs’ and ‘Common Costs’ for the purposes of costs management and for sharing the claimants’ own costs amongst themselves [§5]. This order did not, however, address the potential liability of the claimants for any adverse costs orders in favour of the Defendant [§6–7]. Following that order, the claimants obtained After-The-Event (ATE) insurance policies totalling approximately £14.1 million (£2.35 million per claimant), calculated on the basis of several liability for any adverse costs [§9, §19]. The Defendant subsequently applied for a determination on the nature of the claimants’ potential liability for costs. Separately, both parties applied to vary their court-approved costs budgets upwards, citing significant developments in the litigation.

Costs Issues Before The Court

The court was required to determine two discrete costs issues. The first was the Defendant’s application for an order specifying that, if any claimant was ordered to pay costs to the Defendant, they would be severally liable for their own ‘Individual Costs’ but jointly and severally liable with any other unsuccessful claimant(s) for the Defendant’s ‘Common Costs’ [§3]. The second issue concerned the competing applications by both the claimants and the Defendant to increase the budgets for several phases of the litigation, namely: Issue/Statements of Case, CMC, Disclosure, and Witness Statements [§33].

The Parties’ Positions

- The Defendant’s Position on Costs Liability: The Defendant, represented by Roger Mallalieu KC, argued that the claimants were pursuing a collective strategy based on common allegations, with each claimant’s case relying on and supporting the others [§10–11]. Citing authorities including Stumm v Dixon (1889) 22 QBD 529, Dufoo v Tolaini [2014] EWCA Civ 1536, Rowe v Ingenious Media Holdings plc [2020] EWHC 235 (Ch), and Ontulmus v Collett [2014] EWHC 4117 (QB), it was submitted that where parties combine to present a common claim or defence, the established principle is that they are jointly liable for the costs of that common endeavour [§12]. The Defendant relied on the claimants’ correspondence seeking several liability and on their ATE arrangements as reasons to determine costs liability at this stage [§8–9].
- The Claimants’ Position on Costs Liability: The claimants, represented by Andrew Hogan, resisted the application [§15]. They argued that costs orders should ordinarily be made at the end of a case and that no good reason had been shown for a pre-emptive order [§16]. They submitted that their claims remained separate, with distinct individual elements, and that their ATE insurance had been reasonably obtained on a several liability basis [§19]. Imposing joint and several liability now could force them to seek additional, costly insurance cover to guard against the risk of being left solely liable for common costs if a co-claimant could not pay [§9, §19]. In the alternative, they argued that if an order was made, it should be for several liability only, citing factors including that these were separate claims brought by seven individuals in six claims, represented by three firms of solicitors [§22].
- Positions on Budget Variations: Both parties filed Precedent T forms seeking increases in four phases of their budgets: Issue/Statements of Case, CMC, Disclosure and Witness Statements [§33]. The claimants relied on the need for Amended Replies, an additional CMC, extra disclosure work and the increased number of Defendant witness statements [§39, §48, §55, §66]. The Defendant pointed to the burden of answering significantly amended Particulars of Claim, the additional CMC, the costs of maintaining a legacy email archive and the increased number of its own witness statements [§44, §52, §59, §70]. The court then applied CPR 3.15A, assessing in each case whether there had been a ‘significant development’ and what sums were reasonable and proportionate [§34–37].

The Court’s Decision

Costs Liability Application: The court granted the Defendant’s application [§23]. It held it had jurisdiction under its wide case management powers (CPR 3.1) to make such an order, and that costs sharing orders had become “commonplace in multi-party actions where parties combine to litigate common issues” [§24].

The court applied the principle from Stumm v Dixon that each party is liable jointly with each other for the whole of the reasonable costs of their common claim or defence, but only severally for the individual costs of their claim [§25–26]. The court referred to Rowe v Ingenious Media Holdings plc, noting that it emphasised the need to pay particular attention to “the nature of the claim” when deciding whether to order joint or several liability for costs [§27]. The present case was materially different: the claimants’ cases depended “not merely on them bringing the same central case based on the Similar Fact and Generic cases, but also on each individual Claimants’ own specific case being said to cross support each of the other Claimants’ cases and the collective case as a whole” [§30].

The court rejected the argument that the decision should be deferred. It considered it “imperative” that the claimants understood the consequences of the way the litigation was being conducted, particularly given the substantial costs already incurred and further substantial trial-preparation costs to come [§31]. The fact that the claimants might need to reassess their ATE insurance was “in their own best interests” and not a reason to refuse the order [§31]. The order would not “tie the court’s hands” if circumstances later justified a departure [§32].

Budget Variations: The court assessed each variation request against the test in CPR 3.15A, requiring a ‘significant development’ in the litigation [§34–36]. It noted that “if agreement cannot be reached on a figure for a particular phase of the budget, the Court is not bound by any offer which has been made” [§37].

For the Claimants:

- - Issue/Statements of Case: Sought £139,295 (£36,120 time costs plus £103,175 disbursements); allowed £20,000 [§39–43]. The court found the Replies went beyond their proper function and, regarding the Ward Allegations, “impermissibly advanced a factual case that contradicted the case advanced in the Particulars of Claim” [§42].
  - CMC: Sought £200,000; allowed £200,000 in full [§48–51]. A further CMC was a significant development not previously contemplated.
  - Disclosure: Sought £495,520; allowed £80,000 [§55–58]. The court held the claimants were “largely responsible for their own failure to undertake the disclosure exercise properly in the first place” and had only obtained “several discrete but limited orders for disclosure against the Defendant” [§57].
  - Witness Statements: Sought £175,000; allowed £50,000 [§66–69]. The budget had assumed the Defendant would serve a maximum of 30 witness statements; 11 further statements required consideration, which constituted a significant development.

For the Defendant:

- - Issue/Statements of Case: Sought £958,558; allowed £95,000 [§44–47]. The court accepted this was a “more legitimate” request given the claimants’ “significant amendments” imposing “a significant burden to answer and investigate new allegations” [§46]. The preparation of supplemental witness statements could not fall within this phase.
  - CMC: Sought £200,000; allowed £200,000 in full [§52–54].
  - Disclosure: Sought £424,439 (including £357,919 for server costs); allowed £357,919 [§59–65]. The claimants argued that the cost of maintaining a legacy email archive was a business overhead and not a “legal cost” under CPR 44.1, citing London Scottish Benefit Society v Chorley (1884) 13 QBD 872. The court rejected this argument, accepting the Defendant’s evidence that the server cost was “only being incurred by reason of this litigation” and was therefore an expense “necessarily arising from the litigation and necessarily caused by the course which it takes” [§64–65].
  - Witness Statements: Sought £250,800; allowed £90,000 [§70–73]. The increase in witness numbers was “because the scope of the claim has expanded by amendment, bringing in new allegations” [§72].

The court also noted that the November 2024 order required amendment to constitute a proper costs management order as mandated by CPR 3.15(2), observing that “parties seldom draft proper or effective costs management orders” [§74–77].

Reasonable Joint Costs Recoverable In Full Regardless Of Number Of Defendants

Group Litigation: A Determination Of Costs Related To Common Issues

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

Costs Budgeting | Significant Developments

Costs Budgeting, Proportionality And Incurred Costs

Security For Costs In UK Civil Litigation

Permission To Appeal Costs | When Hopeless Grounds And False Citations Justify A 75% Costs Award Against The Applicant

Indemnity Costs, New Costs Blog, Personal Injury, QOCS, Summary Assessment

The High Court’s decision in Taiwo v Homelets of Bath Limited [2025] EWHC 3173 (KB) demonstrates when exceptional circumstances justify departing from the general rule that respondents do not recover costs for attending permission to appeal hearings.

Background

The claim arose from events in 2010 when the defendant, Homelets of Bath Limited, sought to evict the claimant, Wemimo Mercy Taiwo, from a property in Bath. The claimant succeeded at a liability trial in 2018, where it was found she had been harassed and assaulted [§1]. The matter proceeded to a quantum trial to assess damages, with the claimant seeking approximately £2 million for psychiatric injury, injury to feelings, and loss of earnings [§2].

At the quantum trial before HHJ Blohm KC, the defendant successfully invoked section 57 of the Criminal Justice and Courts Act 2015. The judge found the claimant had been fundamentally dishonest regarding three matters: the genuineness of her marriage, her claims for Employment Support Allowance benefits, and the deliberate exaggeration of her disability from October 2013 onwards [§3]. Consequently, the entire claim was dismissed, including the claim for Vento damages for injury to feelings, which the court confirmed fell within the definition of “personal injury” for s.57 purposes [§84-89]. The judge also determined the claimant was no longer a protected party.

At a consequentials hearing on 13 March 2025, the judge ordered the claimant to pay the defendant’s costs of the claim, to be assessed on an indemnity basis, with an interim payment of £25,000 [§4]. The appointment of Mr Emmanuel Diamond as the claimant’s litigation friend was terminated. Furthermore, Mr Diamond and Mr Abayomi Bamidele Odebode were joined to the proceedings as additional defendants for the purpose of considering non-party costs orders under section 51 of the Senior Courts Act 1981.

The claimant sought permission to appeal both the quantum trial order and the consequentials order. The original Appellant’s Notice was filed by the claimant, and Mr Diamond later filed an N161 seeking a re-hearing of the permission application [§6, §11]. Permission was refused on the papers by Sheldon J on 28 March 2025 [§10]. This judgment concerns the oral renewal of that application for permission to appeal. A separate non-party costs order was later made against Mr Diamond and Mr Odebode on 6 August 2025 [§16]. Numerous further applications were made by the claimant and Mr Diamond throughout the appeal process.

A notable feature of the proceedings was the submission of documents containing false legal authorities, including citations to non-existent cases such as “Irani v Duchy Farm Kennels [2020] EWCA Civ 405” and “Chapman v Tameside Hospital NHS Foundation Trust [2018] EWCA Civ 2085” [§25-27]. The court found these were “no doubt falsely created by AI” and rejected Mr Diamond’s explanation that he had “stepped back” from the litigation when these documents were prepared [§26].

Costs Issues Before the Court

The court was required to determine several distinct costs issues arising from the litigation history. The primary issue was whether to award the respondent its costs of attending the oral renewal of the permission to appeal hearing, which is generally not permitted under the standard rules [§141]. A related issue was the appropriate basis and percentage of any such costs award. The court also had to consider the claimant’s liability for the costs orders made at the quantum trial consequentials hearing, namely the indemnity basis costs order and the £25,000 interim payment, the stay on which was now lifted [§119-120]. Additionally, the court had to address the procedural validity and merits of the appeal against the consequentials order, which included the termination of the litigation friend and the joinder of parties for non-party costs. Finally, the court was tasked with deciding whether to impose a civil restraint order on the claimant and/or Mr Diamond due to the manner in which the litigation and appeals had been conducted [§127].

The Parties’ Positions

The respondent sought its costs of responding to the application for permission to appeal. It requested that these costs be assessed on an indemnity basis, with an interim payment of £15,000, plus a summarily assessed sum of £4,000 for dealing with the civil restraint order application [§140]. The respondent invited the court to depart from the general rule in Practice Direction 52B paragraph 8.1 that respondents are not usually awarded costs for attending permission hearings, relying on the guidance in Mount Cook Land Ltd v Westminster City Council [2004] 2 Costs LR 211 [§141-142].

The applicant objected to any costs order being made against her [§140]. While her formal position on the respondent’s application was not detailed in the judgment beyond a general objection, her conduct and submissions throughout the proceedings formed the backdrop to the court’s assessment. The applicant, through Mr Diamond, had filed multiple iterations of grounds of appeal and skeleton arguments, some of which contained bogus legal authorities [§9-10]. The court noted that Mr Diamond appeared to be advancing arguments on the joinder issue for his own benefit rather than the claimant’s [§124].

The Court’s Decision

The court refused permission to appeal against both the quantum trial order and the consequentials order, finding none of the grounds to be reasonably arguable [§108, §126]. It also refused to extend time for the appeal against the consequentials order. The stay on the costs orders from the consequentials hearing was lifted, meaning the claimant was liable for the defendant’s costs on an indemnity basis, subject to detailed assessment, and was required to make the £25,000 interim payment [§119-120].

On the costs of the permission to appeal hearing, the court departed from the general rule in PD 52B paragraph 8.1 and made an order in the respondent’s favour [§144]. Applying the guidance from Mount Cook at paragraph [76], Constable J found exceptional circumstances. These included the hopelessness of several grounds of appeal, the persistent pursuit of those grounds through numerous repetitive and undisciplined submissions, and the citation of false authorities, which the judge found had “undoubtedly added considerably to the burden on the Court and on the Respondent” [§143]. The judge noted that not all arguments were hopeless, so a full award was not appropriate. Balancing these factors, the court ordered the applicant to pay 75% of the respondent’s reasonable costs incurred from the date of Sheldon J’s paper refusal (28 March 2025), including any costs dealing with the CRO, to be assessed on the standard basis if not agreed, with an interim payment of £7,500 [§144].

The court also granted a limited civil restraint order against both the claimant and Mr Diamond [§132]. This was justified by two applications found to be totally without merit: the application struck out by Bourne J [§127] and the earlier appeal against a costs budgeting decision, which Sheldon J had found to be “misconceived and unarguable” [§130]. The judge cited the persistent and undisciplined conduct of the litigation, including the submission of an unsolicited witness statement after the draft judgment was circulated, as further demonstration of the need for restraint [§136].

The judgment also affirmed the indemnity costs order from the consequentials hearing. It found no arguable basis to appeal the indemnity basis, holding that there could be no appeal against it “in principle given the Applicant’s failure to beat a Part 36 Offer“, and confirmed that the indemnity assessment and £25,000 interim payment should now take effect [§119]. Furthermore, it found the joinder of Mr Diamond and Mr Odebode for non-party costs consideration to be not reasonably arguable as a ground of appeal, noting Mr Diamond’s deep involvement in the claim’s conduct [§122-124].