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Baxendale-Walker Principle Does Not Extend To Appellate Costs Against Regulatory Bodies

The Court of Appeal’s decision in Dentons UK and Middle East LLP v Solicitors Regulation Authority Ltd [2026] EWCA Civ 655 addresses whether the costs protection afforded to regulatory bodies in first-instance disciplinary proceedings applies equally on appeal.

Background

Dentons UK and Middle East LLP (“Dentons”) is a solicitors’ firm that found itself subject to disciplinary proceedings brought by the Solicitors Regulation Authority Ltd (“the SRA”) before the Solicitors Disciplinary Tribunal (“the SDT”). The SDT reached a decision against Dentons, which Dentons then appealed to the High Court. That appeal was heard by Lang J, who dismissed it. Dentons pursued a further appeal to the Court of Appeal, which was heard over two days on 25 and 26 March 2026.

In its substantive judgment handed down on 27 April 2026 ([2026] EWCA Civ 508), the Court of Appeal allowed Dentons’ appeal. The SDT’s decision was quashed and the matter was remitted to the SDT to be determined on the basis of a different test set out in the Court of Appeal’s judgment. Dentons was therefore substantially the successful party in the appellate proceedings, though the case was not concluded outright in its favour given the remittal.

Following the substantive judgment, the parties were unable to agree costs, and the Court of Appeal was required to determine the appropriate costs orders in respect of both the appeal to Lang J and the further appeal to the Court of Appeal. It was common ground between the parties that the costs of the proceedings before the SDT itself were to be reserved to the SDT. The costs judgment was handed down on 21 May 2026 ([2026] EWCA Civ 655), with the constitution comprising Lord Justice Bean (Vice President of the Court of Appeal, Civil Division), Lord Justice Jeremy Baker, and Lord Justice Zacaroli.

Costs Issues Before the Court

Two distinct costs issues required determination. The first, and more substantive, was whether the SRA’s status as a regulatory body meant that no costs order should be made against it in respect of the appellate proceedings, notwithstanding that Dentons had been substantially successful. The SRA argued that the principle established in Baxendale-Walker v Law Society [2007] EWCA Civ 233 (“Baxendale-Walker 1”), which disapplied the ordinary costs-follow-the-event rule in disciplinary proceedings before the SDT, should be extended to cover appeals from the SDT as well.

The second issue, which arose only if the court rejected the SRA’s primary position and made a costs order in Dentons’ favour, concerned the appropriate amount to be ordered on account of costs pending detailed assessment. Dentons had filed costs schedules showing total costs of £793,679.60 exclusive of VAT across both appeals: £355,778.98 in the High Court and £437,900.62 in the Court of Appeal. The SRA’s own costs across the same proceedings were considerably lower, at £90,358.54 in the High Court and £89,479.13 in the Court of Appeal, making Dentons’ costs nearly 4.5 times greater than those of the SRA.

The Parties’ Positions

The SRA’s position

The SRA contended that no costs order should be made against it, relying on the principle in Baxendale-Walker 1. In that case, the Court of Appeal held that there was no presumption that costs should be awarded in favour of a solicitor who had successfully defeated disciplinary proceedings before the SDT. The reasoning was that the Law Society (and by extension the SRA) occupied a wholly different position to that of an ordinary civil litigant, given its independent obligation to bring properly justified complaints of professional misconduct to the SDT’s attention in the public interest. Exposing the regulator to adverse costs orders simply because properly brought proceedings had been unsuccessful risked a chilling effect on the exercise of its regulatory obligations.

The SRA further relied on a subsequent decision in the same proceedings, Baxendale-Walker v Law Society [2007] EWCA Civ 820 (“Baxendale-Walker 2”), in which Lord Phillips CJ expressed the view that the same principle applied equally to appellate proceedings under s.13 of the Solicitors Act 1974. The SRA argued that there was a tension between that approach and the line of authority suggesting that the ordinary CPR costs regime applied on appeal, and that Lord Phillips CJ’s approach was to be preferred.

Dentons’ position

Dentons argued that the Baxendale-Walker 1 principle was confined to proceedings before the SDT and did not extend to appeals. It relied on a consistent line of authority to that effect. In Bryant and another v Law Society [2007] EWHC 3043 (Admin), the Divisional Court applied the normal CPR approach to costs on an appeal from the SDT, though the court gave no consideration to either of the two Baxendale-Walker decisions. In Bass and Ward v SRA [2012] EWHC 2457 (Admin), Bean J reached the same conclusion having been referred to Baxendale-Walker 1, though Baxendale-Walker 2 was not cited. Most significantly, in Wingate v Solicitors Regulation Authority [2018] 1 WLR 3969, the Court of Appeal expressly confirmed that the Baxendale-Walker 1 principle did not apply on appeal, with Rupert Jackson LJ stating that parties arriving in the Administrative Court on appeal from the SDT entered a costs-shifting regime and stood on an equal footing, with the losing party ordinarily paying the winning party’s costs under CPR r.44.2.

The Court’s Decision

The regulatory body costs issue

The Court of Appeal rejected the SRA’s argument that the Baxendale-Walker 1 principle should apply to the appellate proceedings. The court held that it was bound by its own decision in Wingate, which had expressly considered and answered the question in the negative. The fact that Lord Phillips CJ’s comments in Baxendale-Walker 2 had not been cited to the Court of Appeal in Wingate did not render that decision per incuriam. The observations in Baxendale-Walker 2 were in any event obiter, since Lord Phillips CJ had determined the costs question in that case largely on the basis of the petitioner’s dishonesty rather than on the regulatory principle.

The court also expressed agreement with the reasoning in Wingate as a matter of principle. The rationale underpinning Baxendale-Walker 1 was that the SRA’s regulatory responsibilities required it to bring properly justified complaints to the SDT without fear of the chilling effect of an adverse costs order, placing it in a wholly different position to that of an ordinary civil litigant. That rationale did not, however, extend to the appellate context. Where the SRA had the benefit of a determination from the SDT and was challenging that determination on appeal, its position was more akin to that of a normal litigant. The court therefore confirmed that the ordinary costs-follow-the-event approach under CPR r.44.2 applied.

Having determined that the SRA was not protected from an adverse costs order by reason of its regulatory status, the court considered the appropriate order. Dentons was substantially the successful party following the second appeal, but the SDT’s decision had been quashed and remitted rather than resolved outright in Dentons’ favour. Balancing those two considerations, the court ordered that the SRA pay 65% of Dentons’ costs of both the appeal to Lang J and the further appeal to the Court of Appeal, with those costs to be subject to detailed assessment if not agreed.

Payment on account

On the question of the appropriate payment on account, the court applied the approach set out in Excalibur Ventures LLC v Texas Keystone [2015] EWHC 566, identifying a fair estimate of the likely level of recovery subject to a margin to allow for error in estimation. The court was not assessing the costs, but determining what amount should be paid pending detailed assessment.

65% of the total costs incurred by Dentons was £515,891.74. The court noted that while the matter was no doubt of considerable importance to Dentons, the question on assessment of costs payable between litigants was not whether it was reasonable for Dentons to choose to instruct such expensive solicitors and counsel, but whether it was reasonable for the resulting cost to be imposed on the SRA. Given the enormous amount of Dentons’ costs for a matter that lasted a day in the High Court and involved substantially a repeat of the same arguments at a hearing of less than two days in the Court of Appeal, the court concluded that a substantial discount was appropriate in arriving at a fair estimate of the likely level of recovery. The court ordered the SRA to pay £200,000 within 21 days on account of the total costs incurred by Dentons across both appeals.

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The Senior Courts Costs Office’s decision in R (TM Eye) v Dean Hall and R (TM Eye) v Radu and Teodorescu [2026] EWHC 1193 (SCCO) concerned the costs of two conjoined appeals by a private prosecutor against hourly rates assessed by the Legal Aid Agency under section 17 of the Prosecution of Offences Act 1985.

Background

TM Eye Ltd is a private prosecution company that undertakes surveillance, investigative and test purchase operations in connection with the sale of counterfeit goods. As a private prosecutor, it is entitled to recover its costs from central funds under section 17 of the Prosecution of Offences Act 1985, with those costs assessed by the Legal Aid Agency (“LAA”). Two separate prosecutions had been brought by TM Eye Ltd, one against Dean Hall and one against Florentina Radu and Carmen Teodorescu. In both cases, costs orders under section 17 were made in TM Eye Ltd’s favour.

On assessment, the LAA’s Determining Officer awarded hourly rates of £89 per hour for surveillance, preparatory and investigative work and test purchases of counterfeit goods, and £32 per hour for travel. TM Eye Ltd appealed those rates to the Senior Courts Costs Office. In January 2026, Costs Judge Leonard gave judgment on the two appeals together, increasing the rates awarded. The Judge awarded £107 per hour for all work, save for supervision carried out by Mr McKelvey, the Appellant’s sole director, which was awarded at £142 per hour. The Judge found that the LAA had been paying the same hourly rates for years, based on historic Costs Judge decisions, and that those rates were not reasonably sufficient to compensate the Appellant in accordance with the relevant statutory provisions. In the absence of more helpful evidence from either party, the Judge applied a straightforward inflation-based adjustment using public records.

Following the substantive judgment, the question of the costs of the appeal fell to be determined. The Appellant produced a costs schedule in form N260 totalling approximately £45,052. It was also noted that some 28 further claims had been put on hold by agreement pending the outcome of the appeal, and that the benefit of the judgment to the Appellant across those claims was estimated at in excess of £200,000. The Judge noted however that he had no substantive evidence of that figure. The costs of the appeal were determined by Costs Judge Leonard on 18 May 2026.

Costs Issues Before the Court

The jurisdiction to award costs of the appeal arose under regulation 10(14) of the Costs in Criminal Cases (General) Regulations 1986, which permits the court to award to a successful appellant “a sum in respect of part or all of any reasonable costs (including any fee payable in respect of an appeal) incurred by him in connection with the appeal“. The Judge noted at the outset that this discretion is materially different from the costs regime under CPR 44. There is, for example, no general rule that a successful appellant will be awarded its costs; it is a matter for the court.

The Respondent, represented by Richard Clarke for the Lord Chancellor, did not contest the principle that some costs should be awarded to the Appellant. The dispute centred on the amount. The Respondent argued that the Appellant had failed on so many of its arguments, and had achieved an outcome so far short of what it had sought, that recovery should be limited to 33% of its costs. Alternatively, the Respondent proposed an issue-based approach under which several categories of costs should be disallowed entirely. The amount of time claimed was also challenged.

The specific items in dispute within the costs schedule included: the hourly rate claimed for Mr McKelvey’s time (claimed at £330 per hour, being the rate sought on the substantive appeal rather than the rate actually awarded); the time claimed for Mr McKelvey’s witness statement and exhibits; the time claimed for bundle preparation; and the time claimed for client attendances. A professional fee of £3,000 claimed for Mr Conway, the Appellant’s accountant and unofficial financial director, was also in issue.

A more fundamental objection also arose in relation to Mr McKelvey’s time. The Appellant had been represented throughout the appeal by Mr Strickland of Thomas Legal Costs Ltd, a fully qualified Costs Lawyer with the right to conduct litigation and to undertake advocacy on costs issues. Thomas Legal Costs Ltd was on the court record for the Appellant. The costs schedule had been drawn up so as to include both Mr Strickland’s time and Mr McKelvey’s time, as if both were legal representatives. The question arose whether it was permissible for the Appellant to claim both the costs of its legal representative and the time spent by its own employee on the litigation.

The Parties’ Positions

The Appellant contended that it had achieved significant success, both in the two cases under appeal and more broadly, given the knock-on effect on the 28 further claims that had been stayed pending the outcome. It submitted that the benefit of the appeal to the Appellant was estimated at in excess of £200,000 across those claims alone, and that it had had no realistic alternative but to pursue the appeals in order to establish its entitlement to be compensated at appropriate hourly rates. On that basis, the Appellant argued for recovery of its costs in full or close to full, relying in part on CPR 44 criteria and associated legal authority.

The Respondent’s position was that the Appellant’s success was substantially qualified. The Appellant’s primary case, that it should be paid for all work and all travel time at fixed rates far in excess of those actually awarded, had always been unsustainable in principle and had failed. The evidence produced in support of the claimed figures had been found to be inadequate. The Appellant’s case that recoveries under section 17 orders had caused its business to move from profit to loss had also failed, with the key evidence from Mr Conway found to be contradicted by evidence given by Mr McKelvey and Mr Hobbs in an earlier case, R (TM Eye Ltd) v Abdullah. The Respondent submitted that a 33% recovery was appropriate, or alternatively that an issue-based approach should be adopted with several categories disallowed entirely. The Respondent also challenged the inclusion of Mr McKelvey’s time in the schedule and the rate at which it had been claimed.

The Court’s Decision

Costs Judge Leonard began by addressing the legal framework. The award was made under regulation 10(14) of the Costs in Criminal Cases (General) Regulations 1986, not under CPR 44. The Judge noted that the Appellant’s submissions had referred to CPR 44 criteria and related authority, but made clear that the discretion under regulation 10(14) operates differently. There is no general rule that a successful appellant recovers its costs.

The Judge rejected the Respondent’s submission that the Appellant had wrongly based its case on a right to profit from private prosecutions and had lost that argument. The Judge accepted that the relevant statutory provisions confer a right to compensation for expenses incurred, not a right to profit. However, applying Re Eastwood [1975] Ch 112, “profit” in this context meant no more than the Appellant’s capacity to remunerate Mr McKelvey appropriately as its sole director. The Respondent’s point was therefore more hypothetical than real, and in practical terms the Appellant had the better of that argument.

The Judge acknowledged that the Appellant’s stated grounds had largely failed. The primary case, that all work and travel time should be paid at fixed rates far in excess of those awarded, was described as always having been unsustainable in principle. The evidence in support was inadequate. The case based on the business moving from profit to loss also failed, with Mr Conway’s evidence found to be contradicted by earlier evidence from Mr McKelvey and Mr Hobbs in R (TM Eye Ltd) v Abdullah, the discrepancies being sufficiently stark to cast doubt on the credibility of the Appellant’s evidence generally. The comparable market rate evidence offered by both parties was found to be one-sided and entirely unhelpful. The Judge observed that relevant market evidence did exist and might ideally have been addressed in an independent expert’s report, but no such report had been produced. The result was that the Judge had fallen back on a simple inflation-based adjustment using public records.

Turning to the costs schedule itself, the Judge addressed the inclusion of Mr McKelvey’s time. The Appellant had been represented by Mr Strickland of Thomas Legal Costs Ltd, a fully qualified Costs Lawyer with the right to conduct litigation and advocacy on costs issues. The Appellant was therefore not a litigant in person, and the principles applicable to litigants in person did not apply. Applying the principle in Richards v Wellington (Plant Hire) Ltd v Monk and Co (1984) Costs LR Core Vol 79, Bingham J at page 83 (citation as given in the judgment), the Appellant could recover only legal costs, not the cost of being a litigant. It was not open to the Appellant to claim both the costs of its legal representative and the cost of the time spent on the litigation by its own employees. Mr McKelvey did not fall within any of the limited exceptions to that rule as he was not legally qualified, nor was he an expert witness.

The Judge found that the Appellant’s costs schedule was incorrectly drawn up in that it incorporated both Mr Strickland’s time and Mr McKelvey’s time as if they were both legal representatives. For example, under “attendances on client” it was not permissible to claim both 7.4 hours of Mr Strickland’s time as the legal representative and 7.4 hours of Mr McKelvey’s time as, in effect, the client upon whom Mr Strickland was attending. Only Mr Strickland’s time was recoverable. Mr McKelvey’s time was disallowed in its entirety.

The Judge also declined to allow the fee of £3,000 claimed for the professional fees of Mr Conway, given the concerns about his evidence. The time claimed for the preparation of bundles was also found to be excessive. The bundle itself was relatively straightforward. The Judge was unable to understand why, in addition to some 9 hours claimed by Mr Strickland for working on it, an additional 17 hours was claimed for a paralegal. Given the amount of time spent by Mr Strickland on the bundle, the paralegal’s role must have been purely administrative. It was disallowed in its entirety.

The Judge marked as disallowed or reduced time which was considered to be irrecoverable, excessive or, in one instance, incorrectly calculated. This brought the total down from £45,052 to just over £22,000, reflecting Mr Strickland’s reasonable time and a small amount of recoverable disbursements. The Judge bore in mind however that some of that time, albeit reasonable in amount, would have been spent upon evidence which had been found to be unreliable or unhelpful, and so would have been unreasonably incurred. The amount payable by the Respondent for the Appellant’s costs of the appeal was accordingly reduced further, and was assessed at a total of £15,000 inclusive of disbursements.

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Foreign Litigation Costs Recoverable As Damages For Breach Of An Exclusive Jurisdiction Clause, Assessed on the Indemnity Basis

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The Commercial Court’s decision in Diageo DV Limited v NIO S.R.L. (in liquidation) [2026] EWHC 1198 (Comm) addresses the recovery of foreign litigation costs as damages for breach of an exclusive jurisdiction agreement and the assessment of such costs on the indemnity basis.

Background

This matter concerned an application by Diageo DV Limited (“Diageo”), an English company engaged in the production and distribution of alcoholic beverages, for summary judgment and a final anti-suit injunction against NIO S.R.L. (in liquidation) (“Nio”), an Italian company in voluntary liquidation. The application was heard on 17 April 2026 before Anna Dilnot KC, sitting as a Deputy High Court Judge in the Commercial Court, with judgment handed down on 19 May 2026.

The underlying dispute arose from a Share Purchase Agreement dated 23 November 2023 (the “SPA”), by which Diageo agreed to purchase Nio’s category “A” share in Niococktails s.r.l. (“Niococktails”) for consideration comprising a completion payment of €2.75 million, a deferred payment of €1.25 million, and a contingent exit payment of at least €1 million. The dispute centred on Diageo’s decision to withhold €780,008 from the deferred payment, representing its estimated liability in respect of a settlement reached between Niococktails and entities associated with Conor McGregor and Proximo Spirits Inc (together, the “Proximo/McGregor Entities”).

Prior to the SPA, in around August 2023, Niococktails had entered into a letter of intent and a promotional services agreement with the Proximo/McGregor Entities. Following completion of the share purchase, those arrangements were terminated, prompting the Proximo/McGregor Entities to threaten claims of up to USD 12 million against Niococktails. A settlement agreement was ultimately executed on 2 August 2024, with Niococktails paying USD 1 million in full and final settlement. Diageo subsequently notified Nio of its intention to withhold part of the deferred payment as an estimated liability under clause 6.2 of the SPA.

By letter dated 18 November 2024, Diageo gave notice that it intended to withhold €800,000 from the deferred payment, incorrectly stating the settlement sum as €1 million. Diageo corrected that error in a letter dated 28 November 2024, explaining that the estimated liability was €750,000, being USD 1 million less the €200,000 excess stipulated by clause 7.5(a) of the SPA, converted to euros at an exchange rate of USD 1:EUR 0.95. On 14 January 2025, Diageo paid Nio €469,992, being the deferred payment of €1.25 million less €780,008, the latter figure representing the settlement sum less the excess, converted to euros using the Bank of America spot rate at the date of payment.

Nio objected to the withholding, raising grounds including alleged failures by Diageo to provide sufficient information, non-compliance with clause 5.4 of the SPA (which required reasonable endeavours to settle by way of a product purchase from Proximo), and the contention that Diageo had no unilateral right to withhold any sum without prior agreement or a determination under the Counsel Determination Mechanism provided for in clause 6.2. The parties exchanged correspondence between November 2024 and January 2025 without reaching agreement, and neither party invoked the Counsel Determination Mechanism.

On 26 March 2025, Nio commenced proceedings before the Civil Court of Milan, seeking recovery of the withheld sum. Nio relied upon an exclusive jurisdiction clause in favour of the Italian courts contained in Article 8 of a Deed of Transfer dated 1 December 2023, which had been executed to satisfy the formal requirements of section 2470 of the Italian Civil Code for the transfer of shares in an Italian company. Nio also filed an application before the Italian Supreme Court seeking a declaration that the Milan court had jurisdiction, which resulted in the Milan proceedings being stayed.

Diageo’s position was that the SPA contained, at clause 24.2, an exclusive jurisdiction agreement in favour of the English courts, and that the Italian proceedings had been commenced and pursued in breach of that agreement. Diageo obtained an interim anti-suit injunction from David Bailey KC on 18 July 2025 (reported at [2025] EWHC 2109 (Comm)), restraining Nio from taking further steps in the Italian proceedings. That injunction was continued until further order by HHJ Pelling KC by order dated 8 September 2025, which also addressed service of the claim form and other documents on Nio out of the jurisdiction in Italy. HHJ Pelling KC also made a costs award in Diageo’s favour at that stage in the amount of £85,159 (from a claimed sum of £95,411), covering the costs of the hearing before David Bailey KC and the application to continue the interim injunction, assessed on the indemnity basis.

Diageo’s application for summary judgment and a final anti-suit injunction was issued on 6 January 2026 and served on Nio by certified email on 23 January 2026. Nio did not file any acknowledgement of service or defence, and did not appear or seek representation at the hearing on 17 April 2026. The court was satisfied that Nio had been properly served and was aware of the application, and proceeded to determine it in Nio’s absence.

Costs Issues Before the Court

Three distinct costs matters fell to be determined. The first was whether Diageo was entitled to recover, by way of damages, the legal costs it had incurred in the Italian proceedings as a result of Nio’s breach of the exclusive jurisdiction clause in the SPA. The second was whether an interim payment on account of those damages should be made at this stage, given that the Italian proceedings remained ongoing and the full extent of Diageo’s loss could not yet be quantified. The third was the summary assessment of the costs of the application before the court on the indemnity basis.

On the question of damages, the legal basis for recovering foreign litigation costs as damages for breach of an exclusive jurisdiction clause was well established. The court noted that the proposition had gone unchallenged before the Supreme Court in both Starlight Shipping Co v Allianz Marine and Aviation Versicherungs AG [2013] UKSC 70 and AMT Futures Ltd v Marzillier [2018] AC 439. The measure of recovery is to put the non-defaulting party in the position it would have been in had the foreign proceedings not been brought at all, and can include costs incurred in those foreign proceedings: Compania Sud Americana de Vapores SA v Hin-Pro International Logistics Ltd [2015] 1 Lloyd’s Rep 301 at [37] to [38]. Importantly, such costs are recoverable even where the foreign court lacks the power to award costs: Union Discount Co Ltd v Zoller [2002] 1 WLR 1517 at [31]. The assessment of those costs is conducted on the indemnity basis, with the burden of establishing any failure to mitigate resting on the party in breach: National Westminster Bank plc v Rabobank Nederland (No. 3) [2008] 6 Costs LR 839 at [25].

On the question of the costs of the English proceedings and application, the court noted that a successful claimant for an anti-suit injunction is ordinarily entitled to its costs on the indemnity basis where it can establish that the breach of the exclusive jurisdiction clause caused it reasonably to incur legal costs: A v B [2007] 2 CLC 203 at [9] to [15]. Diageo sought summary assessment of the costs of the application on the indemnity basis, having provided a costs schedule in that regard. The court also had to consider how to treat any costs of the proceedings falling outside the scope of the two earlier applications and the present application, given the prior costs order made by HHJ Pelling KC.

The Parties’ Positions

Diageo’s position on damages was that, by commencing and pursuing the Italian proceedings in breach of clause 24.2 of the SPA, Nio had caused Diageo to incur costs in Italy in challenging the jurisdiction of the Italian courts. Those costs were recoverable as damages. Diageo was not yet in a position to quantify its total loss, given that the Italian proceedings remained ongoing, with the Milan court proceedings stayed pending the Italian Supreme Court’s determination on jurisdiction. Diageo therefore sought an interim payment of damages pursuant to CPR 25.20 and CPR 25.23(b) in the amount of £44,045, representing approximately 90% of the costs totalling €52,238.29 incurred to date in the Italian proceedings. Those costs were evidenced by invoices from Diageo’s Italian lawyers, PedersoliGattai. Diageo also sought an order that the remainder of its damages be assessed following the conclusion of the Italian proceedings.

On the costs of the application, Diageo sought summary assessment on the indemnity basis in the sum of £42,056.90. Diageo submitted that it was entitled to costs on the indemnity basis as a successful claimant for an anti-suit injunction, the breach of the exclusive jurisdiction clause having caused it reasonably to incur legal costs in obtaining the relief granted.

Nio did not appear and was not represented at the hearing. It had not filed any acknowledgement of service or defence, and had not responded to the application other than to dispute service in correspondence.

The Court’s Determination

The court granted summary judgment in Diageo’s favour, finding that Nio had no real prospect of successfully defending the claim. The court found that clause 24.2 of the SPA constituted an exclusive jurisdiction agreement in favour of the English courts. The court rejected Nio’s reliance on the jurisdiction clause in the Deed of Transfer, finding that the Deed was narrow in scope and concerned only with the formalities for effecting the transfer of the share in Niococktails. The construction of the exclusive jurisdiction clause started from the assumption, established in Fiona Trust & Holding Corp v Privalov [2007] UKHL 40, that the parties, as rational business people, are likely to have intended any dispute arising out of the relationship into which they have entered to be decided by the same tribunal unless the language of the clause makes it clear that certain questions are to be excluded from that tribunal’s jurisdiction. The Deed was not concerned with the wider rights and obligations of the parties related to the sale and purchase, including the terms upon which any part of the deferred payment could be withheld. All of the claims brought by Nio before the Court of Milan were disputes or claims which fell within the material scope of clause 24.2 of the SPA. While labelled by Nio as claims for breaches of the Deed of Transfer or of provisions of Italian law, they were in substance claims for breaches by Diageo of the terms of the SPA or the non-fulfilment of the conditions required to be fulfilled before Diageo was entitled to withhold any part of the deferred payment.

The court granted a final anti-suit injunction restraining Nio from continuing with the Italian proceedings, both before the Court of Milan and the Italian Supreme Court. The court also granted declaratory relief confirming that the claims brought by Nio in the Italian proceedings were within the scope of the exclusive English jurisdiction agreement and were brought in breach of that agreement.

On the substantive dispute, the court found that Diageo had complied with its obligations under clause 5.4 of the SPA (including the obligation to use reasonable endeavours to ensure Niococktails gave due regard to settling by way of a product purchase from Proximo, and to consult with Nio prior to entering into the settlement agreement). The court also found that Diageo had complied with clause 6.2 of the SPA and was entitled to withhold the sum of €780,008 from the deferred payment as a genuine and bona fide estimate of Nio’s liability under the indemnity provision. The court rejected Nio’s argument that Diageo was not entitled unilaterally to withhold any amount without agreement or a prior determination via the Counsel Determination Mechanism, finding that clause 6.2 entitled Diageo to withhold the amount of the estimated liability as long as it had notified Nio of the same in writing before the deferred payment became due.

Damages for Italian Litigation Costs

The court held that by commencing and pursuing the Italian proceedings, Nio had breached the exclusive jurisdiction clause in the SPA. As a result of that breach, Diageo had taken steps in Italy to challenge the jurisdiction of the Italian courts and had incurred costs, principally legal costs. The court considered that Diageo was entitled to recover such expenditure which was reasonably incurred as damages in the proceedings.

The court applied the principles established in Union Discount Co Ltd v Zoller and National Westminster Bank plc v Rabobank Nederland (No. 3). A party forced to defend proceedings brought in breach of an exclusive jurisdiction clause can recover reasonable costs incurred as a result of the foreign proceedings even if the foreign court lacks the power to award costs. The assessment of those costs is conducted on the indemnity basis such that the non-defaulting party can recover all costs reasonably incurred and reasonable in amount, with the burden of proof of any failure to mitigate on the party in breach. The court described the indemnity basis as “a useful proxy for an exercise in assessing reasonable costs where the burden is on Nio to establish a lack of reasonableness or failure to mitigate,” drawing an explicit analogy with the burden of proof under CPR 44.3(3).

Diageo was not in a position finally to determine the amount of its loss because the Italian proceedings were ongoing, with the proceedings before the Milan court stayed pending a decision on jurisdiction from the Italian Supreme Court. The court therefore considered it appropriate to grant an interim payment of damages.

The sum of £44,045 sought by Diageo represented approximately 90% of the costs (which totalled €52,238.29) that Diageo had incurred to date in respect of the Italian proceedings. Those costs had been established by way of the invoices submitted by Diageo’s Italian lawyers, PedersoliGattai. The court acknowledged that even assessing the costs on the indemnity basis, 90% would be a high proportion of costs to recover. However, the amount of £44,045 was reasonably modest and the court had no specific reason to reduce the amount of the interim payment sought. Further, it was likely that Diageo would continue to incur legal costs in Italy and it followed that its final costs burden for which it would be entitled to be compensated would likely exceed £44,045.

The court therefore granted Diageo an interim payment in the amount of £44,045, with the remainder of its loss to be assessed in due course following the conclusion of the Italian proceedings. The court considered it appropriate for Diageo to receive some contribution from Nio towards its costs at this point rather than awaiting the conclusion of the Italian proceedings.

Summary Assessment of Application Costs

The court turned to the costs of the application before it. Diageo had been provided with a costs schedule in respect of the application (but not the proceedings), with a request that costs be assessed summarily and on the indemnity basis. The total amount claimed as the costs of the application was £42,056.90.

The court noted that HHJ Pelling KC had already made a costs award in Diageo’s favour in the amount of £85,159 (out of the £95,411 claimed) which sum covered Diageo’s costs of the hearing before David Bailey KC on 18 July 2025 and the costs of the application to continue the interim anti-suit injunction, assessed on the indemnity basis. The court observed that it was unclear whether there existed costs of the proceedings (other than the £10,000 court fee for issuing the proceedings) which fell outside of the scope of those two applications, this application and the Italian proceedings.

The court therefore limited its summary assessment to the costs of this application (plus the £10,000 court issue fee), with any other amounts incurred by Diageo in the proceedings not already subject to costs orders to be assessed at the same time as damages were finally to be assessed. The court assessed the costs of the application on the indemnity basis in the amount of £33,645, being 80% of £42,056 (the judgment uses the rounded figure of £42,056 at paragraph 87, though the claimed sum stated at paragraph 86 is £42,056.90). The court did not provide reasons for the 20% reduction in its judgment.

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Section 51 Costs Jurisdiction Injunction Without Claim Form | Gotti

Payments On Account In Budgeted Cases And Pre Judgment Interest On Costs

A Near Full-Value Part 36 Offer On A Binary Recognition And Enforcement Claim Held To Be ‘Genuine’ Where The Strength Of The Claim Justified It

Indemnity Costs, New Costs Blog, Part 36, Payment on Account

The King’s Bench Division’s decision in Timokhin v Timokhina [2026] EWHC 1194 (KB) addresses whether a Part 36 offer representing a 9% discount on a binary recognition and enforcement claim was a genuine attempt to settle or a strategic device to secure indemnity costs.

Background

The underlying proceedings concerned a dispute between two Russian national former spouses, Alexander Valeryevich Timokhin (the claimant) and Anna Anatolyevna Timokhina (the defendant), about the recognition and enforcement in England and Wales of two Russian judgments relating to a contested post-nuptial agreement. The trial judgment ([2026] EWHC 439 (KB)) found in favour of Mr Timokhin and rejected the several objections advanced by Ms Timokhina. The Russian judgments were ordered to be recognised and enforced, with the debt arising from those judgments quantified at £417,416.67.

The consequentials judgment ([2026] EWHC 1194 (KB)), handed down by Mr Justice Dexter Dias on 19 May 2026, dealt with four applications: a stay of enforcement pending a domestic appeal and pending Russian bankruptcy proceedings, costs, interest, and payment on account. The claimant was represented by Matthew Bradley KC and William Birch, instructed by Brown Rudnick LLP. The defendant was represented by Charles Samek KC, Jennifer Perrins and Bláthnaid Breslin, instructed by Goodman Ray LLP.

For the purposes of this article, the focus is on the costs-related issues, namely the application of CPR Part 36, the appropriate rate of enhanced interest on costs, interest on the debt, and the quantum of the payment on account. The stay applications are addressed only insofar as they provide relevant context.

Costs Issues Before the Court

The claimant had made a Part 36 offer on 20 May 2025, with the relevant period expiring on 10 June 2025. The offer represented a 9% discount on the full value of the claim, specifying a figure of £380,000. At trial, the claimant succeeded in full, beating his own Part 36 offer.

The costs issues before the court were therefore as follows. First, whether it would be unjust, within the meaning of CPR 36.17(5), to impose the standard Part 36 consequences under CPR 36.17(4), namely indemnity costs from the expiry of the relevant period, enhanced interest on costs and an additional 10% payment. Second, if the Part 36 consequences were to apply, what rate of enhanced interest on costs should be ordered. Third, what rate of interest should be awarded on the debt itself. Fourth, what sum should be ordered by way of a payment on account of costs.

The defendant’s primary submission on the Part 36 issue was that the offer had not been a genuine attempt to settle the proceedings, as required by CPR 36.17(5)(e), on the basis that a 9% discount on a binary recognition and enforcement claim was effectively tokenistic. The defendant also raised a subsidiary argument that the offer was underspecified, confusing, equivocal or indistinct.

The Parties’ Positions

The claimant’s position

The claimant submitted that the Part 36 consequences under CPR 36.17(4) should follow in the ordinary way. It was argued that the offer of £380,000, representing a discount of just under 10% on the full claim value, was a genuine and reasonable attempt to settle. The claimant’s position was that the strength of his case justified a high offer level, and that the binary nature of recognition and enforcement claims did not render a high percentage offer inappropriate or illusory. The claimant further submitted that the defendant had raised arguments with poor prospects of success, some of which were floated and then disappeared with little more, and that her case had obvious weaknesses, particularly in its family law aspects. On the interest rate on costs, the claimant sought 8% above base rate. On interest on the debt, the claimant proposed a commercial rate of 5% from the date of the second Russian judgment (11 October 2023) to the expiry of the relevant period. On the payment on account, the claimant sought 65% of his costs, pointing to the volume of work necessitated by the defendant’s diffuse array of objections, some of which were first ventilated or particularised in detail only as trial approached.

The defendant’s position

The defendant submitted that it would be unjust to impose the CPR 36.17(4) consequences. Her primary argument was that the offer was not a genuine attempt to settle, relying on CPR 36.17(5)(e). It was contended that, given the binary yes/no nature of a recognition and enforcement claim, a discount of only 9% was effectively a device to secure an indemnity costs award rather than a meaningful invitation to compromise. The defendant also submitted that she had raised important arguments with very real merits, characterising her points as “entirely reasonable”, and that the offer was underspecified, confusing, equivocal or indistinct. On the interest rate on costs, the defendant submitted, on a contingent basis, that 1% above base rate was appropriate. On interest on the debt, the defendant raised a pleading objection, submitting that interest had not been pleaded as required by CPR Part 16 and should therefore not be awarded. On the payment on account, the defendant submitted that the lowest figure in the likely range was no more than 55%, criticising the scale of the costs incurred by the claimant.

The Court’s Decision

Part 36 consequences | was it unjust to apply CPR 36.17(4)?

The court confirmed the well-established starting point that the burden of establishing injustice rests on the unsuccessful party, and that this burden represents a formidable obstacle. The court cited ABFA Commodities Trading Ltd v Petraco Oil Company [2024] EWHC 706 (Comm) and the frequently cited passage from Briggs J in Smith v Trafford Housing Trust [2012] EWHC 3320 (Ch), to the effect that the court does not have an unfettered discretion to depart from the ordinary costs consequences under Part 36, and that to hold otherwise would undermine the salutary purpose of the regime in promoting compromise and avoiding unnecessary expenditure of costs and court time.

The court also noted the need for vigilance against very high settlement offers being used strategically, as a device to secure an indemnity award rather than as a genuine attempt to settle. However, on the facts, the court rejected the defendant’s submission that the offer fell into that category. The court accepted that a discount in the early 90% range was justified given the strength of the claimant’s case. The claimant had a rational and reasonable basis to conclude that his prospects were strong, and a discount of just under 10% was therefore sober and realistic rather than tokenistic or illusory. The court did not accept that the binary nature of recognition and enforcement claims rendered a high offer inappropriate. Binariness is inherent in such claims, and the more pertinent factor was the strength of the claim itself.

The court also rejected the defendant’s characterisation of her own arguments as having “very real merits” or being “entirely reasonable”. Some of her arguments had poor prospects of success, some legal points were raised and then disappeared with little more, and the family law aspects of her case were described as particularly unconvincing. The court further rejected the submission that the offer was underspecified, confusing, equivocal or indistinct, noting that it was perfectly clear that the offer related to the King’s Bench claim, and that clarification had been provided when requested.

The court also noted that the defendant had applied very late in the day to amend her initial defence, a recognition of the limitations of her original position, but the amended defence fared no better and had obvious weaknesses of its own. It was to the credit of the claimant’s legal team that even though it could have applied to adjourn the trial in light of the amendment, it determined to retain the trial listing and do its best to avoid incurring yet more costs.

Taking into account all the circumstances under CPR 36.17(5), the court concluded that the defendant had not come close to establishing that it would be unjust to order the CPR 36.17(4) consequences. The court also noted, by reference to the passage from Briggs J in Smith v Trafford, that the essential purpose of Part 36 is to visit costs consequences upon parties of whom it can properly be said that they ought to have settled by accepting the other party’s offer, rather than taken the matter to trial. The defendant had a reasonable and realistic opportunity to accept a genuine settlement offer from the claimant. She failed to take it. Instead, she persisted in a case that was materially flawed in key respects, with some parts of it largely devoid of merit.

Enhanced interest on costs | what rate?

The parties disputed the rate of interest to be granted on costs. The maximum is 10% above base rate. The claimant applied for 8%. The defendant, on a contingent basis, submitted that it should be 1%. The court rejected the defendant’s proposal as unrealistically low. However, the court also considered 8% to be too high, noting that while the defendant took a series of bad points, not all of them were fundamentally flawed or highly likely to fail, and that the court was not persuaded that in the three months from offer to trial the disruption to the claimant was as acute as he maintained. The correct interest figure was held to be 6% above base rate.

Interest on the debt | the pleading point

The defendant submitted that interest on the debt should not be awarded since it had not been pleaded by the claimant as required by CPR Part 16. The court rejected this objection. The short point was that CPR 16.1 makes plain that Part 16 is inapplicable to a Part 8 claim, which this was. In any event, the Court of Appeal had considered the question of a failure to plead interest in El Ajou v Stern [2006] EWCA Civ 120, in which Carnwath LJ held that a pleading failure is not necessarily fatal to a claim for interest, and that where the point had been raised, the judge could give leave to amend on appropriate terms if necessary. The court exercised its discretion to award interest on the debt at a commercial rate of 5% from the date of the second Russian judgment (11 October 2023) to the expiry of the relevant period.

Payment on account | what percentage?

Approximately 70% of the costs incurred (exclusive of VAT) fell to be assessed on an indemnity basis as a Part 36 consequence. In accordance with Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm), per Christopher Clarke LJ at paragraphs 23 to 24, the court was required to arrive at a “reasonable sum” of likely recovery, allowing for uncertainty and margin for error.

Given the level of interest granted combined with the indemnity basis also granted, the court judged that there were good prospects that the claimant would recover 65% of his costs following detailed assessment. This was close to what the claimant might expect on a standard assessment. As to the defendant’s criticism of the scale of the costs incurred by the claimant, the court had fully in mind the scale of the work necessitated by the diffuse array of objections to recognition and enforcement the defendant placed before the court. It took the court over 100 pages of trial judgment to deal with them. The claimant had no option but to undertake the necessary professional work to meet the shifting and expanding case, some aspects of which were first ventilated, or particularised in detail, as the trial was imminent. The court rejected the defendant’s submission that the lowest figure in the likely range was no more than 55%.

Conclusion

The court ordered standard basis costs up to the expiry of the relevant period and indemnity basis costs thereafter. On interest, the court ordered: interest on the debt at 5% from the second Russian judgment (11 October 2023) to the expiry of the relevant period, then at 6% above base rate thereafter; interest on costs incurred prior to the expiry of the relevant period at 5%; interest on costs incurred after the expiry of the relevant period at 6% above base rate; interest on costs incurred after judgment at 6% from the date the cost was incurred; and interest on the debt at 8% from the date of the order for payment until payment under the Judgments Act 1838. The court also ordered a 10% additional payment under CPR 36.17(4)(d)(ii) and a payment on account of 65% of costs. The court also refused both applications for a stay of enforcement, finding that the balance of prejudice fell decisively in favour of the claimant and that there was a real risk of dissipation by the defendant.

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CPR 38.6 | Discontinuing LiP Ordered To Pay Defendants’ Costs | Eight Arguments Dismissed | The High Bar For Displacing Costs On Discontinuance

Costs on Discontinuance, New Costs Blog, Payment on Account

The King’s Bench Division’s decision in Lodhia v Twelve Trees Management Company (Bromley-by-Bow) Limited & Ors [2026] EWHC 1177 (KB) addresses the costs consequences of discontinuance where a claimant sought to displace the usual rule under CPR 38.6 on multiple grounds.

Background

Mr Amar Lodhia, a leaseholder at the Maltings residential estate in East London, brought defamation and malicious falsehood claims against five defendants: Twelve Trees Management Company (Bromley-by-Bow) Limited (“TTMC”), the corporate entity managing the estate; Urang Group Limited trading as Urang Property Management (“Urang”), the property management company; and three individual residents who were also TTMC directors, Mr Thomas Squires (the third defendant), Mr Andrew Cregan (the fourth defendant), and Mr Tasleem Malleck-Amode (the fifth defendant). Mr Lodhia described himself as a legal consultant, social entrepreneur, and public interest advocate. He worked as a supervised legal consultant at JSC Chambers and was undertaking a postgraduate degree at the University of Law.

The claim arose from a newsletter sent to leaseholders on 6 March 2025, authored by Mr Squires and distributed by Urang. The newsletter criticised Mr Lodhia’s litigation activities, accused him of lying and making baseless allegations, stated that he was bankrupt and had no formal legal training, and referred to a previous general civil restraint order made against him. It encouraged leaseholders to seek independent legal advice before acting on his recommendation to withhold service charge payments.

Proceedings were issued on 15 May 2025. The original Particulars of Claim sought damages for defamation and malicious falsehood against all five defendants in relation to eleven statements in the newsletter. Mr Lodhia had been made bankrupt on 10 June 2024 and was automatically discharged on 10 June 2025, meaning the claim was issued during his bankruptcy.

Rather than filing a defence, the TTMC defendants applied on 15 July 2025 for summary disposal, seeking: a declaration under section 10 of the Defamation Act 2013 that the court lacked jurisdiction to hear defamation claims against the fourth and fifth defendants; strike-out or summary judgment on remaining claims against those defendants; strike-out or summary judgment on the malicious falsehood claim against the first and third defendants; and strike-out of paragraphs concerning the defendants’ insurance position. By order dated 13 November 2025, Steyn J listed the summary disposal application and a trial of preliminary issues as to meaning for hearing on 21 and 22 January 2026.

On 11 January 2026, Mr Lodhia applied to amend his Particulars of Claim. The proposed amendments deleted the fourth and fifth defendants entirely, abandoned all malicious falsehood claims, reduced the statements complained of from eleven to six, and removed the paragraphs concerning insurance. This conceded the summary disposal application in its entirety, despite Mr Lodhia having previously described it as “misconceived”.

On 15 January 2026, Mr Lodhia applied to postpone the January hearing, which was granted on 19 January 2026 by Collins Rice J, who attached particular weight to a letter from Dr Myrto Tsakopoulou, a Complex Emotional Needs and Complex Trauma Lead Psychologist at East London NHS Foundation Trust, dated 15 January 2026. That letter stated that Mr Lodhia’s treatment had been extended and that he was required to attend hospital on Thursdays, one of which fell during the listed hearing dates. The defendants subsequently raised questions about the authenticity of that letter.

A relisting appointment took place on 12 February 2026, which Mr Lodhia failed to attend. By order dated 16 February 2026, the matter was relisted for 6 and 7 May 2026. On 19 February 2026, Mr Lodhia applied again to postpone the May hearing on the grounds that his preferred counsel, Mr Chiffers, was unavailable. On 4 April 2026, he applied for a stay of proceedings until 30 September 2026 to facilitate mediation. Both applications were refused by Steyn J on 17 April 2026.

On 29 April 2026, Mr Lodhia made a further application to postpone the May hearing, supported by his tenth witness statement, which explained that he had only recently become aware that he was required to sit oral assessments at the University of Law on 6 and 7 May. Steyn J refused the application as originally framed but, in light of a subsequent witness statement indicating that the 6 May assessment could be rescheduled, ordered that the hearing proceed on 6 May only. She also expressed concerns about the authenticity of documents exhibited by Mr Lodhia and the truthfulness of his witness statement, and made directions for further evidence to address those concerns.

On 30 April 2026, Mr Lodhia filed a notice of discontinuance of the entire claim. Steyn J directed that the 6 May hearing be shortened to half a day to deal with consequential matters and outstanding costs issues. The hearing before Linden J took place on 6 May 2026. Mr Lodhia appeared in person. Jonathan Price KC and Percy Preston appeared for the TTMC defendants, instructed by rradar Limited. Greg Lazarev of Lazarev Cleaves LLP appeared for Urang. Judgment was handed down on 18 May 2026.

Costs Issues Before the Court

The costs issues arising at the 6 May hearing were numerous and arose against the backdrop of Mr Lodhia’s notice of discontinuance filed on 30 April 2026. The court was required to determine the costs consequences of several distinct procedural events, as well as the applicable basis of assessment and the question of an interim payment on account.

Before turning to the substantive costs issues, two preliminary points were raised by Mr Lodhia. First, he argued that his trustees in bankruptcy, Begbies Traynor, and his father (who held a lasting power of attorney over his property and financial affairs) should have been served before any costs determination could be made. Second, he contended that he was not personally liable for any adverse costs order, on the basis that such liability would attach to the bankruptcy estate. The court dealt with both points as threshold matters before proceeding to the substantive costs questions.

The substantive costs issues were: first, the costs of the summary disposal application brought by the TTMC defendants on 15 July 2025, which was effectively conceded by Mr Lodhia’s amendment application of 11 January 2026; second, the costs of the three applications to postpone hearings and the application for a stay, all made by Mr Lodhia; third, the costs consequences of the notice of discontinuance filed on 30 April 2026, with the central question being whether the presumption under CPR Rule 38.6 should apply or whether the court should “order otherwise”; fourth, whether any costs awarded in the defendants’ favour should be assessed on the indemnity basis; and fifth, whether an interim payment on account of costs should be ordered pursuant to CPR Rule 44.2(8) and, if so, in what sum.

The indemnity basis issue was ultimately not pursued by Mr Price KC at the hearing, on the basis that liberty to apply would be preserved pending the outcome of the further evidence directed by the court. The remaining issues were determined on the evidence before the court on 6 May.

An additional procedural matter arose from the TTMC defendants’ invitation to the court to make directions for further evidence in light of concerns about the veracity of certain evidence given by Mr Lodhia and the authenticity of certain documents produced by him. These concerns went beyond those already addressed in Steyn J’s 29 April Order and formed a significant part of the hearing.

The Preliminary Issues

Bankruptcy

Mr Lodhia’s position throughout the proceedings was that he was not personally liable for any adverse costs order and that such liability would attach to the estate in bankruptcy. He relied on sections 283 and 306 of the Insolvency Act 1986 and submitted that the trustees should be given the opportunity to respond to what he called “the potential non-party costs order”.

Linden J rejected this argument. The judge held that any order against Mr Lodhia would not be a bankruptcy debt or liability for the purposes of section 382 of the Insolvency Act or Part 14 of the Insolvency Rules 2016, given that there was no relevant “obligation incurred before the commencement of the bankruptcy”. The newsletter was not written until after his bankruptcy, and any order would be made long after the bankruptcy and his discharge from it.

In any event, the trustees had been aware of the proceedings for some time and had not expressed any wish to participate or make representations. Their view, which the court shared, was that Mr Lodhia was liable in respect of any order for costs against him and they were not. The court noted that if Mr Lodhia thought the trustees should be before the court, it was open to him to take steps to bring this about.

Lasting Power of Attorney

Mr Lodhia argued that his father should have been served in accordance with CPR Rules 6.13 and 6.25 because he had entered into a lasting power of attorney with his father in respect of his property and financial affairs. He submitted that he was a “protected party” to whom CPR Rule 21 applies.

Linden J rejected this argument. There was no evidence that Mr Lodhia lacked capacity or had lacked capacity at any stage of the litigation. His Particulars of Claim and other documents boasted in detail of his alleged public profile, abilities and successes. He described himself as working as a legal consultant at JSC Chambers, being responsible for day-to-day handling of leaseholder disputes, having considerable success in pre-action litigation, and having brought at least two other claims in his own name.

While Mr Lodhia described himself as disabled and vulnerable, and submitted evidence from Dr Tsakopoulou stating that he had complex post-traumatic stress disorder and required reasonable adjustments, Dr Tsakopoulou did not suggest that Mr Lodhia lacked capacity to conduct the proceedings. The judge observed that the evidence fell far short of establishing lack of capacity, and that Mr Lodhia’s performance at the hearing cast real doubt on whether he continued to experience the impairments identified by Dr Tsakopoulou.

The Costs of the Summary Disposal Application

Mr Lodhia sought dismissal of the summary disposal application on the ground that it was “otiose” in light of his proposed amendments, and sought his costs of that application and the amendment application on the basis that the defendants had failed to comply with the Pre-Action Protocol for Media and Communications Claims (“the PAP”).

In his fourth witness statement, dated 10 January 2026, Mr Lodhia said he had sent a letter to the solicitors for TTMC on 6 March 2025 which complied with the PAP, and a further letter of claim to TTMC and Urang on 7 March 2025 by first class post. He stated that no defendant responded at all to either letter of claim, and there was no acknowledgement, substantive response, or engagement of any kind with the Protocol. As he had no factual confirmation as to which individual defendants authorised, edited, approved or authored the newsletter, he was forced to plead on the basis of reasonable inference. He sought further information in July 2025 but did not receive it until he read the witness statements supporting the summary disposal application. The defendants should therefore pay his costs.

The defendants’ position was that there was no breach of the PAP, nor any failure to engage in pre-action correspondence. The amendment application conceded the summary disposal application and discontinued against the fourth and fifth defendants. Mr Lodhia should pay the costs of the summary disposal application and the costs thrown away by reason of the amendments regardless of the outcome of the application for costs on the subsequent discontinuance of the proceedings as a whole.

Linden J agreed that Mr Lodhia should pay the defendants’ costs of the summary disposal application, the discontinuance against the fourth and fifth defendants, and the amendment application in any event. The judge did not accept that there was any breach of the PAP by the defendants, nor any failure to engage reasonably with Mr Lodhia in correspondence. Even if this was wrong, the judge did not accept that this made any difference to Mr Lodhia’s approach to starting, pleading and pursuing his case. His approach in the correspondence to the arguments which subsequently formed the basis of the summary disposal application was also unreasonable and directly gave rise to the need to make that application.

The PAP does not specifically require a prospective claimant or defendant to identify who authorised, edited, approved or authored the publication, nor does CPR Practice Direction 53B specifically require these matters to be pleaded. The principal target of the claim in defamation is the publisher of the statements complained of. In this case the publisher was TTMC, as was apparent on the face of the newsletter and as Mr Lodhia was well aware.

There was an issue as to whether Mr Lodhia actually asked who authorised, edited, approved or authored the newsletter prior to commencing proceedings. In the 6 March 2025 pre-action letter, the furthest he went was to seek “a written explanation of how these defamatory statements were approved for publication and by whom”. There was also an issue as to whether the second pre-action letter of 7 March 2025 was really sent, given that it was sent by post only and not by email, and the defendants’ evidence was that it was not received.

Even assuming the 7 March letter was posted and received, the judge did not accept that there was a failure to engage or a breach of the PAP. Rradar responded to the 6 March letter on 20 March 2025, pointing out that Mr Lodhia’s letter did not comply with the PAP in that it did not identify the specific statements complained of or give details of the serious harm alleged. Instead of providing the information requested, Mr Lodhia set a deadline of 24 March for various demands to be met. The correspondence continued, and on 24 March he stated that proceedings had been issued on CE File, despite not being under any limitation pressure.

The original Particulars of Claim, dated 25 March 2025, correctly pleaded that Mr Squires was the principal author and editor of the newsletter. The case against the fourth and fifth defendants was not pleaded simply on the basis that they were authors; it included allegations about piercing the corporate veil and particulars of the case that they were not acting as agents of TTMC. This was not a case in which the pleader based his case on an allegation that they were authors in circumstances where the true position had not been revealed to him in correspondence, and then discontinued that case when the true position became apparent.

On 13 June 2025, rradar wrote to Mr Lodhia stating that he was right to plead that Mr Squires was the author but arguing that there was no viable case against the fourth and fifth defendants. The terms of section 10 of the Defamation Act 2013 were set out, as were the flaws in Mr Lodhia’s case. The difficulties with piercing the corporate veil were also pointed out. He was invited to discontinue against the fourth and fifth defendants and told that an application would be made if he did not do so.

He did not do so. Instead, Mr Lodhia continued robustly to dismiss rradar’s arguments, to assert that the fourth and fifth defendants were personally liable, and to contest other aspects of the defendants’ position. On 26 June 2025, rradar wrote again, repeating the arguments which subsequently formed the basis for the summary disposal application and stating that they would seek instructions to make that application if he persisted. There was a further attempt to persuade Mr Lodhia on 30 June 2025, but he continued to dismiss the defendants’ arguments up to and including 15 July 2025.

The judge rejected Mr Lodhia’s argument that there was unreasonable conduct by the defendants prior to issuing the summary disposal application. He was given every opportunity to make concessions which would avoid the need for an application to the court, but he did not do so. If anyone was unreasonable it was Mr Lodhia in filing his claim so soon and then failing to engage with the defendants’ arguments, which were clearly explained to him but ignored.

As to causation, Mr Lodhia accepted that the position was clear from the witness statements served in support of the summary disposal application. However, this did not cause him to reflect or alter his approach. On 15 July 2025 he immediately responded that the defendants’ arguments were “misconceived”. On 20 August 2025, he filed a formal response which again described the summary disposal application as “misconceived” and continued to assert his claims as pleaded. It was not until 11 January 2026 that he indicated he wished to concede the summary disposal application.

When asked why, if the information he said he sought was critical, he did not discontinue shortly after 15 July when he had this information, Mr Lodhia told the court that he understood he had been ordered or required to resist the summary disposal application by Master Armstrong’s Order of 16 December 2025. The judge regretted to say that he did not regard this answer as truthful, not just because Master Armstrong’s Order did not require him to do any such thing, but also because the Order postdated by a number of months his decision to take the position that the summary disposal application was “misconceived”.

The judge was satisfied that Mr Lodhia should pay the costs of the summary disposal application given that the defendants were wholly successful. He should also pay the fourth and fifth defendants’ costs of the proceedings given that he discontinued against them: there was no change of circumstances and no unreasonable conduct on their part. He should pay the costs thrown away by reason of his application to amend given that the need to amend arose through his approach to the proceedings.

The Costs of the Postponement and Stay Applications

Mr Lodhia made three applications to postpone hearings and one application for a stay. The first postponement application, made on 15 January 2026, was granted by Collins Rice J on 19 January 2026. She attached particular weight to medical evidence in the form of a letter from Dr Tsakopoulou dated 15 January 2026, stating that Mr Lodhia’s treatment had been extended and he was required to attend hospital on Thursdays, one of which fell during the listed hearing dates.

By the time of the 6 May hearing there was an issue as to the authenticity of Dr Tsakopoulou’s letter, given that until his application on 15 January 2026, the basis for saying a postponement was required was the non-availability of Mr Chiffers. Before this, Mr Lodhia did not mention the need to attend hospital although the defendants said he must have been aware of it in December.

Linden J was willing to assume for present purposes that the 15 January 2026 letter was entirely genuine. Even on this assumption, however, Mr Lodhia should pay the costs of the first application to postpone. His emails of 22 December 2025 first proposed the postponement on the grounds that he had instructed counsel who was not available for the hearing. Insofar as that was the true reason for his application, it was an unreasonable basis for a postponement and the defendants were fully entitled to refuse to agree. Even taking his evidence about the need to attend hospital at face value, his application succeeded on a ground introduced very late in the day. The defendants’ skeleton argument had been filed on 14 January and preparations were necessarily well advanced. The just course was to order that Mr Lodhia pay any costs thrown away by reason of the postponement.

On 19 February 2026, Mr Lodhia applied to postpone the May hearing on the grounds that Mr Chiffers was not available. On 4 April 2026 he issued an application to stay the proceedings until 30 September 2026 to facilitate mediation. On 17 April 2026, both applications were refused by Steyn J. She referred to the 15 January application and noted that Mr Lodhia had failed to attend the listing appointment on 12 February 2026. She found that he had no reasonable excuse for failing to do so, particularly given that the hearing was being relisted at his request. She noted that there had been delay in the proceedings and that Mr Lodhia had had plenty of time to instruct alternative counsel or represent himself. She noted that the defendants were willing in principle to engage in mediation but agreed with them that this did not mean the proceedings should be stayed given the delays.

Linden J was satisfied that the costs of the second postponement application and the application for a stay should be borne by Mr Lodhia given that both applications failed.

On 29 April 2026, Mr Lodhia filed a further application to postpone the May hearing, supported by his tenth witness statement dated 24 April 2026. The application notice appears to have been signed by Mr Chiffers as his representative although Mr Lodhia conducted the correspondence. This explained that on 21 April 2026 he had become aware that he was required to attend oral assessments at the University of Law on 6 and 7 May 2026. He had attempted to reschedule these assessments but had been told by the Programme Lead, Ms Salome Verrell, that they could not be rescheduled.

In response, the defendants filed evidence casting doubt on the veracity of what Mr Lodhia had said in his tenth witness statement and questioning the completeness of the documents he had exhibited. Mr Lodhia then submitted an eleventh witness statement dated 29 April 2026, explaining that on 29 April he had been told that the oral assessment on 6 May could be rescheduled and he was therefore able to attend on that day but not on 7 May. His position was now that the preliminary issues as to meaning could be determined but that the issues as to costs should be postponed.

On 29 April 2026, Steyn J refused Mr Lodhia’s application as framed but, in light of his eleventh witness statement, ordered that the hearing would take place on 6 May 2026 starting at 10am. She expressly refused Mr Lodhia’s request to postpone the hearing of the issues in relation to costs. She also expressed concerns about the authenticity of certain documents exhibited by Mr Lodhia and the truthfulness of his witness statement, and made directions for further evidence to allay those concerns.

Mr Lodhia argued that his application was successful because the defendants resisted it and argued that one day would not be sufficient. Linden J held that his application was not successful in that the hearing was not vacated, as he originally asked. He did then modify his application but unsuccessfully argued that it should not deal with the issue of costs. On balance the judge took the view that he should pay the costs of this application.

The Costs of Discontinuing the Claim

Following Steyn J’s 29 April Order, on 30 April 2026 at 7.55am Mr Lodhia sent a letter offering a drop hands settlement. At 6.14pm, he emailed the defendants’ solicitors a signed notice of discontinuance of the whole claim. The covering email said that any application for costs would be resisted and referred to Mr Squires’ comments at the AGM on 29 April as unreasonable conduct relevant to costs under CPR Rule 44.2. Mr Lodhia also said that if the defendants sought their costs he intended to issue a further claim based on Mr Squires’ actions. The email concluded that the relentless nature of the litigation, and in particular Mr Squires’ actions, had had a profound and serious effect on Mr Lodhia’s health. The email did not suggest that the actions of Mr Squires, or the alleged position in relation to Mr Lodhia’s health, had caused him to decide to discontinue. No explanation for this decision was provided.

Mr Lodhia argued that the usual consequences of discontinuing proceedings, as set out in CPR Rule 38.6, should not follow. He put forward a number of reasons why the presumption identified in this rule was rebutted and the defendants’ costs should be disallowed.

Linden J applied the principles set out by Moore-Bick LJ in Brookes v HSBC Bank plc [2011] EWCA Civ 354. These provide that when a claimant discontinues, there is a presumption that the defendant should recover costs; the burden is on the claimant to show a good reason for departing from that position; the fact that the claimant would or might well have succeeded at trial is not itself a sufficient reason; if it is plain the claim would have failed, that is an additional factor in favour of applying the presumption; the mere fact that the claimant’s decision to discontinue may have been motivated by practical, pragmatic or financial reasons will not suffice to displace the presumption; if the claimant is to succeed in displacing the presumption he will usually need to show a change of circumstances to which he has not himself contributed; however, no change in circumstances is likely to suffice unless it has been brought about by some form of unreasonable conduct on the part of the defendant which in all the circumstances provides a good reason for departing from the rule.

At paragraph 10 of Brookes, Moore-Bick LJ stated that “a claimant who seeks to persuade the court to depart from the normal position must provide cogent reasons for doing so and is unlikely to satisfy that requirement save in unusual circumstances.”

The judge also referred to Nelson’s Yard Management Co v Ezieful [2013] EWCA Civ 235, in which Beatson LJ stated that “the context for the Court’s mandatory consideration of all the circumstances under CPR 44.3 is the determination of whether there is a good reason to depart from the presumption imposed by CPR 38.6.”

The judge proceeded on the assumption, derived from Scheinberg v Van Doorn [2019] EWHC 3220, that it was open to him to disallow the defendants’ costs or make an order in Mr Lodhia’s favour even without a change of circumstances, if there was unreasonable conduct on the defendants’ side. This gave Mr Lodhia the most favourable possible analytical framework.

The judge considered Mr Lodhia’s arguments individually and cumulatively but held that they did not amount to a relevant change of circumstances brought about by unreasonable conduct on the part of the defendants which in all the circumstances provided a good reason for departing from the rule. Nor did they amount to unreasonable conduct on the part of the defendants which would cause the court to disallow their costs in whole or in part.

The judge briefly addressed Mr Lodhia’s key arguments.

- - First, the alleged late disclosure of information as to authorship, editorship and publisher details, breaches of the PAP and failure to engage with the issues in correspondence had already been dealt with in the context of the summary disposal application. Insofar as the service of the statements of the third to fifth defendants in support of the summary disposal application was a relevant change of circumstances (which it was not), it occurred more than nine months before discontinuance. There was no unreasonableness on the part of the defendants in this regard.
  - Second, Mr Lodhia alleged that the defendants’ position on meaning had shifted in relation to two of the six statements complained of, adding to the costs of the preliminary trial as to meaning. There was nothing in this point. The defendants’ position did not materially shift and in any event their approach had no significant impact on costs. It was Mr Lodhia’s approach to pleading the statements complained of (complaining of eleven statements and then reducing this to six several months later) which unnecessarily increased the costs.
  - Third, Mr Lodhia relied on Mr Squires’ alleged defamatory statements about him at the 29 April AGM. It appeared that Mr Squires referred to the litigation and made uncomplimentary remarks which Mr Lodhia argued were implicitly about him. Assuming for present purposes that Mr Lodhia’s account and interpretation were accurate, the judge accepted that this was a recent development but did not regard it as a relevant change of circumstances. Mr Squires’ remarks were a reason for Mr Lodhia to continue with the claim rather than discontinue. Whatever Mr Squires said or implied on 29 April did not cause Mr Lodhia to discontinue. Rather, having decided that he wanted out of the litigation he alighted on this as a lever to use in an attempt to secure a drop hands settlement by threatening further proceedings, and to avoid paying the costs of the proceedings. Even if Mr Squires’ conduct was unreasonable, this was not unreasonable conduct of the litigation and in any event it had no bearing on the costs of the proceedings.
  - Fourth, Mr Lodhia relied on the fact that the defendants were insured in relation to the litigation. He said there was inequality of arms or resources between the parties. This was true but it was not a change of circumstances and did not amount to unreasonable conduct. Mr Lodhia’s own position was that he was aware the defendants were insured in December 2025. The fact that they were represented by qualified and competent lawyers may be a point of difference but this had been the position throughout the proceedings. He also said that although the defendants may be liable for the costs of their lawyers, the fact that they were insured against these costs rendered it unfair that he should have to pay them. This argument was misconceived for obvious reasons.
  - Fifth, Mr Lodhia relied on the alleged insolvency of TTMC, of which he implied he had first become aware from a report dated 9 December 2025. This, he said, was a change of circumstances. It also meant that TTMC would not be able to satisfy any adverse costs order. In fact, Mr Lodhia had a report dated 2 August 2025 which said that TTMC was insolvent. He relied on this report in his 20 August 2025 submissions resisting the summary disposal application and seeking to continue the litigation on all fronts. The insolvency issue was not a relevant change of circumstances and had no bearing on Mr Lodhia’s decision to discontinue or on the costs of the litigation. TTMC was insured against any liabilities in damages or costs, and in any event Mr Lodhia could recover against the other defendants.
  - Sixth, Mr Lodhia relied on the fact that he was discharged from bankruptcy after proceedings were issued. The judge had dealt with the bankruptcy issue above. Mr Lodhia’s discharge was not a relevant change of circumstances and did not amount to unreasonable conduct on the part of the defendants.
  - Seventh, he relied on the defendants’ refusal to accept various offers of settlement which he made and their alleged refusal to engage constructively with his proposals for mediation or other negotiation. The short answer, having considered the without prejudice materials, was that Mr Lodhia had not done better in these proceedings than any offer to settle which he made. He had recovered nothing and was liable to pay substantial costs even leaving aside the effect of his 30 April notice of discontinuance. On the other hand, the defendants did make a without prejudice save as to costs offer of settlement on 13 June 2025 which Mr Lodhia had failed to beat. They had also been prepared to engage in alternative dispute resolution through mediation. They engaged with Mr Lodhia’s proposals but it did not prove possible to reach agreement as to the terms of the mediation, let alone the terms of any settlement. There was no relevant change of circumstances and no unreasonable conduct on the part of the defendants such as would lead to any of their costs being disallowed.
  - Eighth, Mr Lodhia relied on a complaint which he had made to the Solicitors Regulation Authority about a point made in the defendants’ solicitor’s fourth witness statement. Although this would ultimately be a matter for the SRA to determine, there appeared to be nothing in the point. In any event, Mr Lodhia’s complaint and the witness statement were not a relevant change of circumstance and did not amount to unreasonable conduct on the part of the defendants such as would lead the court to disallow their costs.

The judge noted that Mr Lodhia also advanced what he described as “hopeless” arguments, including that he should not be required to pay twice given that part of the service charges which he pays goes towards TTMC’s budget for legal expenses, and that the doctrine of estoppel or approbation applied to prevent TTMC from recovering its costs. The judge observed that TTMC was entitled both to levy service charges and to claim its costs of the proceedings: there was no inconsistency and no question of double recovery.

The judge therefore ordered that Mr Lodhia would pay the costs of the proceedings up to the date of service of the notice of discontinuance. Those costs would be assessed on the standard basis, if not agreed, pending the responses to Steyn J’s 29 April Order and the judge’s directions for further evidence, and there would be liberty to apply in the light of that evidence.

Interim Payment on Account of Costs

Mr Lodhia did not advance any reason to depart from the presumption under Rule 44.2(8) that a reasonable sum should be paid on account of costs. His arguments were that no order for costs should be made in favour of the defendants and that, in any event, their Statements of Costs claimed disproportionately and unreasonably large sums. The judge held there was no good reason why an interim payment on account of costs should not be ordered in the case of both sets of the defendants’ legal representatives.

As to quantum, the judge applied the guidance given by Christopher Clarke LJ in Excalibur Ventures LLC v Texas Keystone Inc & Others [2015] EWHC 566 (Comm). Any figure ordered to be paid on account need not be “the irreducible minimum” in terms of what was likely to be recovered on a detailed assessment. A reasonable sum would often be one that was an estimate of the likely level of recovery subject to an appropriate margin to allow for error in the estimation.

As the judge understood TTMC’s Statement of Costs dated 5 May 2026, the figure of £112,779 plus VAT included the costs of the 6 May hearing rather than being limited to the costs to the service of the notice of discontinuance. In fairness to Mr Lodhia, the question whether he should pay TTMC’s costs of the 6 May hearing had not been the subject of submissions. The judge therefore reserved this issue and gave Mr Lodhia an opportunity to put in written submissions, limited to 5 pages, as to why he should not pay those costs and Urang’s costs of the hearing. The judge would then determine this matter on paper.

In the meantime, the judge worked on the rough and ready basis that approximately £25,000 of the £112,779 was in respect of the 6 May hearing so that approximately £90,000 related to the costs to service of the notice of discontinuance, which the judge treated as 30 April 2026.

Doing the best he could, the judge considered that a reasonable sum at this stage in respect of the costs to 30 April was £55,000 plus VAT. Although this was not a legally complex case, it was made more complex and expensive by Mr Lodhia’s approach. There were multiple emails, letters and witness statements from him generating voluminous material which required to be considered and responded to as appropriate. There were also the applications which generated additional costs, and there was the late postponement of the hearing in January. These considerations meant that the TTMC Defendants might well recover significantly more than £55,000 on a detailed assessment.

As for Urang’s costs, Mr Lodhia’s submission was that Lazarev Cleaves LLP had not been sufficiently involved to justify the figure of £7,364 plus VAT which was claimed. Mr Lazarev explained that in fact Urang’s costs could have been significantly higher. They instructed Counsel to advise them and thereafter had a watching brief in the sense that they were content for rradar and the TTMC Defendants to “make the going” rather than duplicate their efforts. Urang’s costs related principally to consideration of Mr Lodhia’s correspondence and witness statements. The judge rejected Mr Lodhia’s argument that Urang should not recover any of its costs.

As the judge understood Urang’s Statement of Costs, their costs to 30 April 2026 were in the order of £6,000 plus VAT. A reasonable sum at this stage in respect of those costs assuming assessment on a standard basis was £3,600 plus VAT.

Directions for Further Evidence

The judge made extensive directions for further evidence to address concerns about the veracity of certain evidence given by Mr Lodhia and the authenticity of certain documents produced by him. The judge explained to Mr Lodhia that Steyn J’s 29 April Order and these directions were not just relevant to the question whether costs should be assessed on the indemnity basis. Depending on what the evidence in response said, consideration might in due course be given to the question of proceedings for contempt of court. The judge expressly warned at paragraph 115 of the judgment that this possibility existed.

The directions covered: compliance with Steyn J’s 29 April Order; the 6 and 7 March 2025 letters of claim and associated certificates of service; Mr Lodhia’s dealings with Begbies Traynor; Dr Tsakopoulou’s letters; the role of Joseph Chiffers; and Mr Lodhia’s father’s role under the lasting power of attorney. The judge directed that the Order be served by the Defendants rather than by Mr Lodhia, noting that the experience in relation to Steyn J’s 29 April Order demonstrated that it would be “cleaner” for him not to be involved in the various witnesses’ compliance with the Order. This would ensure transparency and confidence in relation to the reliability of the responses received.

The judge gave liberty to apply to Begbies Traynor, Dr Tsakopoulou and Mr Chiffers to vary, set aside or stay the Order so far as it affected them, given that the Order had been made without giving them an opportunity to make representations.

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The King’s Bench Division’s decision in Mew v General Dental Council [2026] EWHC 1116 (Admin) concerned an appeal against erasure from the Dentists’ Register following a Professional Conduct Committee determination that the appellant’s fitness to practise was impaired by reason of misconduct.

Background

Dr Michael Mew, a registered Specialist Orthodontist and the owner and principal practitioner at a private clinic offering treatment under the umbrella term “Orthotropics,” appealed to the Administrative Court against a determination of the Professional Conduct Committee (“PCC”) of the General Dental Council (“GDC”) dated 6 November 2024. By that determination, the PCC found Dr Mew’s fitness to practise impaired by reason of misconduct and ordered the erasure of his name from the Dentists’ Register. The appeal was brought under section 29 of the Dentists Act 1984.

The charges before the PCC related to advice and treatment provided to two young patients, referred to as Patient A and Patient B, between September 2013 and May 2019, as well as claims made in a YouTube video posted in September 2017. In broad terms, the GDC alleged that the Orthotropic treatment provided to both patients was not clinically indicated, that misleading claims had been made to the patients’ parents about the aims and benefits of the treatment, and that certain statements made publicly on YouTube were inappropriate and without adequate objective evidential foundation. Thirty charges were brought in total, with admissions made to seventeen of them either in advance or at the hearing.

Orthotropics is not recognised by the GDC as a speciality, nor is it available within the NHS. Its central premise, as advanced by Dr Mew, was that environmental factors rather than genetics were the predominant cause of malocclusion, and that early environmental intervention could prevent or improve malocclusion in growing children. Dr Mew described himself as “probably the world’s expert” in Orthotropics and acknowledged that it remained a controversial approach with a limited evidence base.

The PCC proceedings were substantial. There were no fewer than 46 hearing days spread across a two-year period from November 2022 to November 2024, with the matter having originally been listed in December 2021 but removed at Dr Mew’s request. The determination itself ran to 197 paragraphs across 75 pages. Expert evidence was heard from four experts: Mr Stephen Powell and Mr Keith Smith for the GDC, and Professor Daniele Garcovich and Professor Stephen Sheldon for Dr Mew. Joint expert reports were also prepared. The PCC preferred the evidence of the GDC’s experts, found the charges proved, and concluded that misconduct and impairment were established. Erasure was imposed as the appropriate sanction, together with an immediate order for suspension.

The appeal was heard over three days on 20, 21 and 22 January 2026 before Charles Bagot KC, sitting as a Deputy High Court Judge. Further written submissions were received through to 26 February 2026, with email communications continuing to 30 April 2026. A draft judgment was circulated on 8 May 2026, with the parties’ corrections and submissions on costs received on 13, 14 and 15 May 2026. The appeal was dismissed in its entirety. The documents before the court ran to over 8,500 pages, with an authorities bundle of 925 pages.

On the substantive grounds, the Deputy Judge found that the PCC’s determination was correct in all material respects and unassailable. The primary challenge, directed at the PCC’s approach to the competing expert evidence, was rejected. The remaining grounds, including challenges to specific charge findings, the approach to “The Jaw Epidemic” paper, the alleged failure to define “adequate objective evidence,” and the exclusion of open-source internet material from cross-examination, were each dismissed. The fresh evidence application, which sought to adduce the full Harvey Thesis and a cephalometric interpretation guide, was also refused on a notional basis, having been considered at the parties’ joint request to assist with the resolution of costs.

The Legal Framework

CPR 44.2 deals with the court’s discretion about whether to make a costs order and the factors it will take into account. CPR 44.3 guides the court as to the basis of assessment. Where standard basis costs are concerned, the court is to determine any doubt about whether costs were reasonably and proportionately incurred, or were reasonable and proportionate in amount, in favour of the paying party. The considerations which point towards costs being proportionate include whether they bear a reasonable relationship to the factors in CPR 44.3(5), including the value of the non-monetary relief in issue, the complexity, additional work generated by conduct, and wider factors such as reputational issues or public importance.

As for the procedure to adopt for the assessment, CPR 44.6(1) and PD 44.9.1 provide the court’s jurisdiction to conduct either a summary assessment or refer costs for a detailed assessment by a costs officer or judge. PD 44.9.1 provides that the general rule is that the court should make a summary assessment of costs at the conclusion of any hearing which has lasted not more than one day.

The Deputy Judge rejected the Appellant’s submission that it should be implied from that passage that summary assessments should not be made in cases where the hearing has lasted more than one day. The court retains a discretion summarily to assess costs following hearings lasting longer than one day and there is no presumption, let alone rule, against doing so. The Deputy Judge was fortified in that view by the White Book Editors’ guidance at paragraph 44.6.3, which states: “There is no rebuttable presumption against summary assessment in relation to costs where hearings last longer than one day. The exercise of the power to make a summary assessment should be considered in every case.”

The Deputy Judge also noted the guidance at PD 44.9.2 that there may be good reason not to conduct a summary assessment where, for example, the paying party shows substantial grounds for disputing the sum claimed for costs that cannot be dealt with summarily.

Costs Issues Before the Court

Following circulation of the draft judgment, the parties agreed that costs should follow the event in accordance with CPR 44.2(2)(a), with the Appellant to pay the Respondent’s costs of the appeal. That much was not in dispute. The costs issues requiring determination by the court were twofold: first, whether the quantum of the Respondent’s appeal costs should be resolved by way of summary assessment or referred to detailed assessment in default of agreement; and second, if summary assessment was the appropriate course, what the correct quantum of those costs should be.

The Respondent’s costs schedule had originally been served in October 2025, when the appeal was first listed but subsequently adjourned. That schedule claimed costs totalling £85,853.20. An updated schedule dated 12 May 2026 increased the sum claimed to £96,248.48. Prior to the costs determination, the Respondent made an open concession of £10,000 against the experts’ fees element of the claim, reducing the sum in issue to £86,248.48. The Appellant raised objections across a range of items within the schedule and opposed the court proceeding to a summary assessment at all.

A procedural issue arose on the morning of handing down, when a dispute emerged between the parties as to whether there had been agreement for the court to be shown recent correspondence containing offers on costs. The Appellant contended that no such agreement had been reached and submitted that the court could not fairly conduct a summary assessment having been exposed to the parties’ respective offers. The Respondent maintained that agreement had been given. The Deputy Judge found it unnecessary to resolve that factual dispute in order to determine the costs issues, holding that judges are routinely required to put matters out of mind (such as documents seen de bene esse or offers disclosed in costs management hearings) and that he was able fairly to conduct a summary assessment notwithstanding his awareness of the offers.

An additional procedural point arose from the Appellant’s submission that, because the draft judgment had been embargoed, its content had not been communicated to Dr Mew by his legal representatives, and it had therefore not been possible to take instructions from him on costs. The Deputy Judge rejected the premise of that submission, noting that the embargo expressly permitted disclosure of the draft and its substance to the parties themselves and their legal representatives, and that there was accordingly no bar on sharing the draft with Dr Mew or taking his instructions.

The Parties’ Positions

Summary assessment versus detailed assessment

The Appellant opposed summary assessment on a number of grounds. It was submitted that, as the appeal hearing had lasted more than one day, the general rule in PD 44.9.1 pointed away from summary assessment. The Appellant also contended that there were multiple areas of the costs schedule requiring further interrogation and the provision of additional detail, and that the objections raised could not fairly be dealt with summarily. A further submission was advanced to the effect that, because the draft judgment had been embargoed and instructions had not been taken from Dr Mew, a summary assessment was procedurally inappropriate. Finally, the Appellant argued that the court’s exposure to the parties’ offers on costs meant that a fair summary assessment could not be conducted.

The Respondent’s position was that the court retained a discretion to conduct a summary assessment regardless of the duration of the hearing, and that the overriding objective supported resolving the costs of the appeal within the judgment rather than deferring them to detailed assessment. The Respondent pointed to the fact that the updated schedule of 12 May 2026 represented only a modest increase on the October 2025 schedule, of which the Appellant had had considerable notice, and that the schedule itself provided the expected level of detail and breakdown. The Respondent had also made an open concession of £10,000 on the experts’ fees, which was characterised as a realistic and sensible approach rather than an acknowledgement that the remaining costs were disproportionate.

Quantum

The Appellant challenged a range of items within the Respondent’s schedule, including the level of experts’ fees, the time costs associated with the experts and their reports, the time spent on producing the costs schedule, and the overall number of items detailed in the schedule of work done on documents (95 separate items being said to be indicative of excess). The Appellant declined to file or serve a schedule of his own costs and declined an invitation from the Respondent to do so for the purpose of contextualising the objections raised.

The Respondent maintained that the costs claimed were reasonable and proportionate having regard to the relevant factors under CPR 44.3(5), including the value of the non-monetary relief in issue, the complexity of the underlying proceedings, the additional work generated by the conduct of the litigation, and the wider reputational and public interest considerations. Particular emphasis was placed on the reasonableness of Counsel’s fees, given the nature and duration of the underlying PCC proceedings, the complexity of the appeal, and the need for complete mastery of 46 days of hearings and over 8,500 pages of documents.

The Decision

The Deputy Judge determined that the appropriate exercise of his discretion was to proceed summarily to assess the costs of the appeal, rather than deferring them to detailed assessment in default of agreement. Whilst he recognised that a referral to detailed assessment would be the normal order following a hearing of more than one day, it was not an invariable rule or presumption. Applying the rules and the overriding objective, several factors pointed in favour of summary assessment.

First, the Deputy Judge was well placed, having heard and determined the appeal via a detailed judgment, to conduct a summary assessment. He had considerable experience of costs and summary assessment, both as a Deputy High Court Judge and when sitting as a Deputy King’s Bench Master. The scale of the costs pointed towards summary assessment, given the amount claimed by the Respondent for the appeal was in five figures, not a substantial six-figure sum or more.

Second, whilst the Appellant complained that he had only about one day to review the Respondent’s updated costs schedule dated 12 May 2026, this had to be seen in the context that this was an update to a schedule served in October 2025, when the appeal was previously listed but adjourned. That earlier schedule already particularised almost 90 per cent of the costs claimed. The October 2025 schedule claimed costs totalling £85,853.20 whereas the May 2026 schedule increased that sum to £96,248.48 (before the £10,000 concession). The Appellant had therefore had an appropriate time period to consider the costs and could reasonably have anticipated that the adjourned hearing would produce a modest increase to the sum claimed.

Third, the Deputy Judge did not accept the Appellant’s assertion that there were multiple areas of the Respondent’s costs schedule which required interrogation and the provision of additional detail. The whole ethos of summary assessment is to avoid that sort of process and the attendant costs and delay, when this can fairly be done. Having scrutinised the Respondent’s schedule, it provided the expected detail and breakdown and, subject to certain adjustments, there was nothing in it which the Deputy Judge considered on the face of it to be disproportionate or unreasonable.

Fourth, and most fundamentally, the Deputy Judge bore in mind that these proceedings related to conduct between 2013 and 2019, now between 7 and 13 years ago. It was in accordance with the overriding objective to resolve all consequential matters within the judgment, rather than deferring the resolution of the appeal costs to further negotiation or, more likely, detailed assessment. The parties’ positions on costs were far apart. The Deputy Judge was pessimistic that simply allowing further time would result in an agreement on the amount of costs. It was probable that further costs would be incurred in proceeding at least part way towards a detailed assessment, which would swiftly become disproportionate to the sums involved, generate additional costs, and entrench the parties’ polarised positions further.

The Deputy Judge also noted that, notwithstanding the importance of the matter to the parties and the public interest in professional regulation, the underlying disciplinary proceedings had already taken up more than their fair share of the tribunal and court system’s limited resources. The PCC proceedings had occupied 46 hearing days spread across a two-year period. The Deputy Judge observed that this duration was manifestly disproportionate and that, with hindsight, the PCC should have exercised considerably more active case management, evidential control, and trial timetabling. Whilst the Appellant opposed the court proceeding to a summary assessment, it was in the Appellant’s interests, as much as the Respondent’s, to draw this protracted matter to a close. It would be doing the Appellant no kindness to permit him to spend further time, energy and money in disputing the appeal costs which he was to pay.

Quantum

As for the quantum of costs, with the Respondent’s open concession against the experts’ fees claimed of £10,000, the sum claimed totalled £86,248.48. The Deputy Judge bore in mind the Appellant’s various objections across a range of the amounts claimed. The Appellant had chosen not to file or serve a schedule of his costs and had declined an invitation by the Respondent to do so in order to contextualise the objections made. The Deputy Judge inferred that the Appellant’s costs of the appeal were greater than those claimed by the Respondent (the Appellant’s experts having, as the Deputy Judge understood it, worked pro bono), which would not be surprising assuming he was privately paying and as he was advancing the appeal, rather than responding to it.

The Deputy Judge noted that the Respondent’s solicitors’ blended hourly rate claimed of £138 for all fee earners involved was below the guideline rate, even for a Grade D fee earner of £146 (London Band 3), let alone that for Grade A of £319. This no doubt reflected negotiations around lower agreed panel rates in return for a regular flow of GDC work. This relatively modest hourly rate mitigated areas where, had the rates been significantly higher, the numbers of hours claimed would have pushed the overall costs claimed in differing categories up to amounts which would potentially have been disproportionate and unreasonable.

After making what he considered to be an appropriate further overall adjustment downwards for experts’ fees consequential on the Appellant’s application to admit fresh evidence, as well as reducing somewhat the solicitors’ time costs relating to the experts and producing the costs schedule, the Deputy Judge reached an overall figure of £75,000 (inclusive of VAT), before examining the other categories of costs further.

Nearly half of that amount related to Counsel’s fees for the appeal inclusive of VAT. The Deputy Judge disagreed with the Appellant’s contention that Counsel’s fees of £30,450 before VAT for appearing at this three-day appeal as well as preparing for it and drafting the written documents, even before factoring in the adjournment of the original listing in October 2025, were disproportionate and unreasonable. Those fees consisted of a brief fee of £28,000, plus two refreshers at £1,000 each, with a modest uplift of £450 which, whilst not explicitly broken down, may have reflected the adjournment of the original listing and a modest amount of time reading back in.

The Deputy Judge considered that no realistic objection could be taken to such fees in the circumstances. Counsel for the Respondent was a leading junior of considerable experience specialising in regulatory work. The underlying proceedings were complex, very lengthy, hard fought and document heavy. All of those factors applied to the appeal, save that at three days, it was not particularly lengthy. That said, the parties had suggested that four days of pre-reading time for the court were necessary (although in the event the necessities of listing meant that it only had one day). Extensive and diligent preparation had plainly been carried out by both parties’ Counsel. That had to be seen in the context that it was necessary for Counsel to have a complete mastery of all the issues, the extensive documents and of 46 days of hearings before the PCC. It was also necessary to distil those lengthy proceedings, the wide-ranging grounds of appeal and the Appellant’s painstakingly detailed submissions into a detailed and convincing written and oral response on behalf of the Respondent. Much was at stake for both parties and there were the wider interests of reputation and the public importance in the proper pursuit of regulatory proceedings. Counsel’s fees claimed were eminently reasonable and proportionate.

As for the Respondent’s solicitors’ time costs, a number of the same considerations also applied in justifying detailed and time-intensive preparation. Other than in relation to expert evidence and time on producing the costs schedule, the Deputy Judge did not consider that the sums incurred were disproportionate or unreasonable, whether standing back and looking at the global amount or considering the breakdown.

The Appellant had complained about the 95 separate items detailed in the schedule of work done on documents, as indicative of excess. In the Deputy Judge’s view, one needed to delve beyond the mere number of items to see that this reflected an admirable attempt at transparency in breaking down tasks into individual components, many of which were less than an hour in duration and reflecting appropriate delegation most (but not all) of the time. The overall total number of hours spent on documents by all fee earners combined was 179.5. Given the relevant factors in relation to the appeal, subject to the points around time on expert evidence being somewhat too high, there was nothing notable or objectionable about the time spent. This reflected work over a period of more than a year from the Appellant’s Notice being served to the substantive hearing, with additional work on consequential matters when the draft judgment was received.

The Deputy Judge made a further downward adjustment, beyond the concession of £10,000 made by the Respondent, to the experts’ fees and solicitors’ time costs on dealing with the experts and their reports, as well as a reduction to the time costs in relation to preparation of the costs schedule which, whilst a complex exercise, appeared on the high side.

For all those reasons, the reasonable and proportionate costs of the appeal were summarily assessed at £75,000. This sum included VAT of £6,090 on the Counsel fee element only (VAT was not claimed on any other aspect), with the Counsel fee before VAT being £30,450. The Appellant was ordered to pay to the Respondent the total sum of £75,000 for the appeal costs.

Whilst CPR 44.7(1) provides that the standard period for the payment of a costs order is 14 days from the date of the order, the Deputy Judge allowed an additional 14 days (28 days in total) for the Appellant to pay the sum ordered, to ensure fairness to the Appellant in making arrangements to pay. The sum was ordered to be paid by 4pm on 12 June 2026.

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The County Court at Derby’s decision in Maidens v Building Supplies Distribution Limited [2026] EWCC 25 addresses whether the court should entertain interim applications before provisional assessment is conducted.

Background

The underlying claim in Maidens v Building Supplies Distribution Limited [2026] EWCC 25 was a personal injury matter which settled for £43,000 on a Part 36 basis. Following settlement, the Claimant’s costs lawyers served a bill of costs in the sum of £56,460, together with notice of commencement, on 19 February 2025. The Defendant served Points of Dispute on 5 June 2025, and the Claimant served Replies on 26 July 2025. The matter fell within the provisional assessment regime under CPR Part 47, and was transferred to District Judge Davies sitting as Regional Costs Judge at the County Court at Derby from the County Court at Lincoln.

The Defendant’s Points of Dispute were accompanied by an itemised Excel spreadsheet, appended with the intention of rendering the Points of Dispute compliant with the requirements identified in Ainsworth. The Claimant’s Replies took issue with the use of that spreadsheet, contending that it could not properly be relied upon at provisional assessment. The Replies also raised more routine objections concerning the adequacy of Ainsworth particularisation in relation to specific points, including Points 7, 15 and 20.

The Defendant subsequently brought an interim application under Part 23, seeking a declaration that the Points of Dispute were compliant with CPR PD 47 paragraph 8.2, and also seeking to strike out those parts of the Replies which asserted non-compliance with Ainsworth. That application was adjourned and came before District Judge Davies on 15 April 2026, with Mr A Hood (solicitor) of Carter Burnett appearing for the Claimant and Mr P Hughes (counsel) instructed by Kennedys Law appearing for the Defendant, both attending remotely by Cloud Video Platform.

By the time of the hearing, the factual and procedural landscape had narrowed. The Claimant conceded the admissibility of the Excel spreadsheet for the purposes identified in Ainsworth, with the result that the majority of the Replies on the spreadsheet issue fell away, save for the Replies to Points 7, 15 and 20. The Claimant indicated that Amended Points of Reply would be filed and served to reflect that concession.

Costs Issues Before the Court

The application raised two distinct issues for determination. The first was a jurisdictional question: whether the Court had any power to entertain a Part 23 interim application within the provisional assessment regime at all. The Claimant’s position was that no such jurisdiction existed, relying on PD 47 paragraph 14.2(2), which excludes paragraph 13.7 of PD 47 from the provisional assessment process. Paragraph 13.7 would otherwise permit applications under Part 23 in the context of detailed assessment proceedings. The Claimant argued that, absent an express provision permitting such applications, the provisional assessment regime was a self-contained process which did not accommodate preliminary or interim applications of this kind.

The second issue, which arose only if the Court found that jurisdiction existed, was whether it should exercise its discretion to determine the remaining Ainsworth compliance disputes in relation to Points 7, 15 and 20 in advance of the provisional assessment on the papers. The Defendant invited the Court to resolve those issues there and then. The Claimant resisted that course, arguing that Ainsworth compliance is a qualitative matter for the judge conducting the provisional assessment, and that determining such issues in advance would fetter the discretion of the assessing judge and interfere with the streamlined nature of the regime.

A further, subsidiary point arose as to whether the application, or its continued pursuit following the concession on the Excel spreadsheet, amounted to an abuse of process.

The Parties’ Positions

The Claimant’s position was, in the first instance, that the Court simply had no jurisdiction to hear the application. Reliance was placed on PD 47 paragraph 14.2(2), which disapplies paragraph 13.7 within the provisional assessment regime. It was submitted that this exclusion reflected a deliberate policy choice: the provisional assessment process is streamlined and self-contained, and the mechanism for challenging the outcome is an oral review following assessment on the papers. There is, on this analysis, no room for Part 23 applications within that process save where expressly provided for. If the Defendant wished to litigate preliminary issues of this kind, the appropriate course was to apply to remove the matter from the provisional assessment regime and seek a full detailed assessment under CPR 47.15(6).

On that basis, the Claimant submitted that the application was an abuse of process and should be dismissed on that ground alone. In the alternative, if the Court found that jurisdiction existed, it was submitted that the remaining Ainsworth disputes in relation to Points 7, 15 and 20 were matters of evaluation and degree, properly to be addressed by the judge conducting the provisional assessment when considering the individual entries in the bill. It was further submitted that, in any event, alternative submissions and concessions were already contained within the Replies, such that the provisional assessment could proceed on the papers without any preliminary determination. Mr Hood also submitted that the Defendant was, in substance, seeking to censor the Claimant’s criticisms of the Points of Dispute, and that entertaining the application would set an undesirable precedent by encouraging parties to litigate costs disputes by instalments.

The Defendant’s position was that the Court did have jurisdiction to hear the application, notwithstanding the exclusion of paragraph 13.7. Mr Hughes submitted that the exclusion of that paragraph did not operate as a blanket prohibition on all applications; rather, the Court retained its general case management powers under CPR 3.1(2)(k) and (m), which remained available regardless of the assessment regime in play. The provisional assessment regime governed the method of assessment but did not strip the Court of its inherent case management jurisdiction to deal with discrete procedural issues. On the substantive question, the Defendant sought a declaration of compliance with PD 47 paragraph 8.2 and a strike-out of the non-compliant parts of the Replies. Mr Hughes invited the Court to resolve the remaining Ainsworth issues on the basis that the parties were before the Court.

The Court’s Decision

District Judge Davies accepted the Defendant’s submissions on jurisdiction. The exclusion of PD 47 paragraph 13.7 within the provisional assessment regime did not, in the judge’s view, operate as a prohibition on applications as such. The Court’s general case management powers under CPR 3.1(2)(k) and (m) remained available, and the provisional assessment regime governed the method of assessment rather than removing the Court’s broader procedural jurisdiction.

However, the judge declined to exercise that jurisdiction. The application was dismissed on the basis that it was not appropriate, as a matter of discretion, to determine the remaining issues in advance of the provisional assessment. The judge’s reasoning was rooted in the purpose and design of the provisional assessment regime, which was introduced following the recommendations of Sir Rupert Jackson to provide a proportionate and self-contained mechanism for resolving lower-value costs disputes, and to avoid the proliferation of interim hearings and associated expense that had previously characterised detailed assessment proceedings.

The regime proceeds on the basis that disputes as to quantum, reasonableness and proportionality are to be addressed through Points of Dispute and Replies, with the assessing judge well placed to deal with issues concerning the presentation and substance of those documents. The judge held that the Court should approach applications to intervene prior to formal provisional assessment with caution, since permitting such applications risks undermining the very purpose of the regime. The existence of jurisdiction did not mean that it should be exercised.

The Claimant’s concession on the admissibility of the Excel spreadsheet was significant. What remained were specific Ainsworth disputes in relation to Points 7, 15 and 20. Those issues, insofar as they concerned the level of detail or the merits of individual items, were matters for the judge conducting the provisional assessment. The Defendant sought, in substance, to pre-empt that evaluative exercise, which was precisely what the provisional assessment regime was designed to avoid. In light of the spreadsheet concession, there was a structured mechanism available (namely, the provisional assessment process itself) to resolve the remaining issues, and there was no demonstrated necessity for the Court to intervene at that stage.

The judge declined Mr Hughes’s invitation to determine the remaining Ainsworth issues, stating that he declined to do so as a matter of principle. Costs had already been incurred on the application, and they were not insignificant. It was not inevitable that there would be an oral review. The Court was required to have regard to the need to deal with cases at proportionate cost, which applied with particular force in costs litigation.

To entertain the application in circumstances where the dispute was suitable for provisional assessment, particularly in light of the concession made, would set an unwelcome precedent. It would encourage parties to bring interim challenges routinely, seeking to litigate issues by instalments which the rules intend to be resolved in a single, streamlined process. That would undermine the provisional assessment regime, increase costs disproportionately, and place additional burdens on court resources. That would not be consistent with the overriding objective.

The judge added for completeness that he was not persuaded that the application when mooted crossed the line into an abuse of process in the strict sense, given that he had accepted Mr Hughes’s submissions on jurisdiction. The issue over admissibility of the Excel spreadsheet schedule was not plainly unarguable when foreshadowed in correspondence, but its continued pursuit following the concession (before the application was issued, as Mr Hood pointed out) as to admissibility of the Excel spreadsheet schedule rendered it disproportionate.

The Claimant’s costs lawyers were directed to file Amended Points of Reply to reflect the Excel spreadsheet concession by 4.00 p.m. on 6 May 2026, and to re-file the N258 in the County Court at Derby by 4.00 p.m. on 27 May 2026. The Defendant’s application was dismissed. The Defendant was ordered to pay the Claimant’s costs of the application, summarily assessed at £11,220.00, to be paid by 4.00 p.m. on 6 May 2026.

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Costs Of Assessment Where Bill Reduced To Under £75,000

Defendant’s Mediation Refusals And Late Expert Change Of Position Insufficient To Displace The Usual Costs Order

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The Technology and Construction Court’s decision in MJS Projects (March) Limited v RPS Consulting Services Limited [2026] EWHC 884 (TCC) addresses whether a successful defendant’s conduct in refusing mediation and its expert’s late change of evidence justified departing from the usual costs rule.

Background

This costs judgment arose from the dismissal of a professional negligence claim brought by MJS Projects (March) Limited against RPS Consulting Services Limited in the Technology and Construction Court in Leeds. The underlying dispute concerned the design and construction of a container park near Felixstowe Port, with the Claimant alleging that the Defendant’s design fell below the standard of a reasonably competent firm of civil and structural engineers. The court ultimately found in favour of the Defendant, concluding that the cause of the damage was workmanship rather than design.

The pre-action history was protracted. The Defendant’s letter of response, dated 22 May 2019, set out in considerable detail why it considered its design was not negligent and identified eleven workmanship defects, as well as the use of incorrect dowel sizes. The Claimant’s response, dated 5 November 2019, did not engage with those workmanship allegations and instead requested sight of the Defendant’s calculations. Those calculations were provided by letter dated 22 December 2020. No substantive reply was received for nineteen months. When the Claimant wrote again in July 2022, it confirmed that an expert structural engineer had been instructed and that the expert supported the Claimant’s position on design negligence. Proceedings were issued on 14 October 2022. Particulars of Claim were served on or around 10 February 2023, a Defence on or around 14 April 2023, and a Reply on 19 May 2023.

The expert evidence timetable was, as the court described it, “concertina-ed” into a short period before trial. The experts’ joint statement was produced approximately three months before trial, with individual expert reports following thereafter. Supplementary reports were filed in response to points raised in the primary reports, with some material served as late as one week before the trial commenced in February 2024. The claim was dismissed following trial, and the costs and consequential orders hearing took place on 14 May 2025, with judgment handed down on 15 April 2026.

Costs Issues Before the Court

Three distinct costs issues required determination. The first was whether the usual costs order, namely that the unsuccessful Claimant pay the Defendant’s costs, should be departed from on account of the Defendant’s conduct in relation to alternative dispute resolution. The Claimant argued that the Defendant had unreasonably refused to engage in mediation on multiple occasions, both before and after proceedings were issued, and that this conduct justified a departure from the default position under CPR 44.2. The Claimant’s position was that the appropriate order was no order as to costs.

The second issue was whether the Defendant’s expert having changed his position on the mass concrete taper and having produced additional calculations approximately one week before trial constituted conduct that should further influence the costs order in the Claimant’s favour.

The third issue was the Defendant’s cross-application for indemnity costs in respect of the expert evidence phase of the proceedings. The Defendant contended that the conduct of the Claimant and its legal team in relation to the instruction, oversight, and management of the Claimant’s expert was sufficiently outside the norm to justify an order for costs on the indemnity basis for that phase. In the alternative, both parties agreed that a payment on account of costs should be made, with the only dispute being the appropriate percentage reduction to apply to the approved costs budget.

The Parties’ Positions

The Claimant’s position on ADR

The Claimant traced a series of proposals for mediation made from as early as 14 July 2022, when a without prejudice meeting, mediation, or meeting of experts was suggested. That proposal was declined by the Defendant on 30 September 2022 on the basis that mediation was not appropriate until the Claimant had provided its expert report. Further proposals were made on 5 June 2023 and 21 September 2023, the latter suggesting two named mediators and a mediation in late October or November 2023. The Defendant declined that proposal by letter dated 28 September 2023, citing the technical nature of the issues and the fact that liability was denied in full, and suggesting that any mediation should follow the experts’ joint statements due in November 2023.

The Claimant characterised the Defendant’s successive objections as a shifting of the goalposts: first, no mediation until the expert report was provided; then, no mediation until after expert discussions; then, no mediation without the experts present at the mediation itself. The Claimant noted that its expert was based in Singapore, making expert attendance at a mediation impractical. It submitted that, applying the Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002 factors, this was not a case unsuitable for mediation. Professional negligence disputes of this nature were routinely resolved at mediation, the parties’ budgets had each included approximately £25,000 for mediation costs, and the value of the claim at nearly £400,000 justified that expenditure. The Claimant also submitted that the merits were not entirely one-sided, given that the Defendant’s expert had changed his position on the mass concrete taper and that the outcome might have been different but for the late additional calculations.

The Claimant’s position on the expert’s late change of evidence

The Claimant submitted that the Defendant’s expert had stated in his written evidence that the mass concrete taper was part of the design and that the failure to install it was a workmanship defect causing the cracking. At trial, he accepted that the mass concrete taper was not part of the design at the relevant joints. The Claimant argued that it had been entitled to approach trial on the basis that the Defendant’s expert would give evidence consistent with his written report and the joint statement. The Claimant asserted that the expert changed his mind as a result of very late additional calculations produced one week before trial, and that this late change of position had a decisive impact on the outcome. On that basis, it was submitted that it would be unjust for the Defendant to recover all of its costs.

The Claimant’s position on indemnity costs

The Claimant resisted the indemnity costs application on the basis that the threshold was high and had not been met. It submitted that the correct Bolam question had in fact been put to the expert in his letter of instruction and was set out on the face of his report. The fact that the expert appeared under cross-examination not to have applied the test correctly did not amount to conduct unreasonable to a high degree. The Claimant also relied on the compressed expert evidence timetable, noting that reports were served late and that supplementary reports followed in quick succession. It was submitted that the expert’s decision to rerun the FE analysis immediately before trial, without informing anyone, could not be attributed to the Claimant or its lawyers, as everyone was astonished when the expert disclosed this during his evidence. The Claimant argued that the tactical decision to focus on design negligence rather than workmanship, whilst ultimately unsuccessful, was a legitimate forensic choice and did not take the conduct of the litigation outside the norm.

The Defendant’s position on ADR

The Defendant accepted the broad outline of the correspondence but submitted that the full chronology had to be considered. It emphasised that workmanship issues had been raised as the cause of the damage for four years before proceedings were issued, and that the Claimant had never substantively engaged with those allegations. The Defendant had provided detailed calculations when requested, had engaged fully in the pre-action protocol process, and had made Calderbank offers and Part 36 offers in the run-up to trial. It submitted that it was not refusing to engage in ADR but was reasonably requiring some understanding of the Claimant’s expert evidence before committing to a mediation process. It noted that the Claimant had refused to provide its expert report even on a without prejudice basis, and that the Claimant’s own stance immediately before trial, asserting that its Part 36 offer “was not made for negotiation purposes” and that it had “a strong case”, demonstrated that mediation would not have had realistic prospects of success. The Defendant also pointed to the Claimant’s imposition of onerous conditions on any mediation, including that the Defendant would have no say in the identity of the mediator appointed, and argued that the Claimant’s refusal to engage with workmanship allegations throughout the pre-action period made meaningful mediation impossible without expert evidence being available.

The Defendant’s position on the expert’s late change of evidence

The Defendant submitted that the mass concrete taper issue had limited materiality. The Particulars of Claim did not mention a mass concrete taper and did not assert that the failure to specify one was a negligent defect in the design. It was never part of the Claimant’s case that a mass concrete taper was required. The issue was only first mentioned in the experts’ joint statement dated 15 December 2023, and the detail of the Defendant expert’s evidence on this aspect came in his report served on 26 January 2024, just over one week before trial. By this time, the majority of costs were already incurred. The Defendant’s expert had explained that a further check was required after consideration of some of the points raised by the Claimant’s expert, and the court accepted that explanation. The additional calculations did not cause the Claimant to abandon its case and did not result in additional costs being incurred. The Defendant also submitted that it was wrong to assert that the expert simply changed his evidence on the number of dowels engaged by the design when the court accepted his explanation that a further check was required.

The Defendant’s position on indemnity costs

The Defendant asserted that the conduct of the Claimant and its legal team in relation to the instruction, oversight, and management of the Claimant’s expert was sufficiently outside the norm to justify an order for costs on the indemnity basis for the expert phase. The Defendant criticised the fact that the Claimant’s expert did not directly answer the question of whether the Defendant’s design was one that a reasonable body of engineers could have produced. Proceedings were issued, the experts’ joint statement produced, and expert reports exchanged without that question being answered. The Defendant asserted that the Claimant did not properly interrogate the application of the Bolam test, the Defendant’s causation arguments, the significance of the date by which the damage had become manifest, nor provide any evidence about what the correct design would be if the Defendant’s design was negligent. The Defendant also criticised the Claimant’s expert’s decision to use FE analysis to assess the Defendant’s design, his use of an out-of-date edition of a technical publication without disclosing that fact, his changes of position without explanation, and his decision to rerun the FE analysis over the weekend before trial without informing anyone. All of these factors, the Defendant submitted, showed the inadequacy of the Claimant’s expert’s compliance with CPR 35 and his expert duty, and justified a costs sanction.

The Court’s Decision

Costs to follow the event

Her Honour Judge Kelly ordered that the Claimant pay the Defendant’s costs, to be the subject of detailed assessment if not agreed. The judge accepted that the Defendant had declined multiple mediation proposals but held that this could not be assessed in isolation. The full chronology had to be considered, including the Claimant’s failure to engage with workmanship allegations raised in 2019, the 19-month delay in responding to the Defendant’s calculations, and the refusal to provide expert evidence even on a without prejudice basis.

Applying the Halsey factors, the judge found that it was not unreasonable for the Defendant to have refused mediation before having some understanding of the Claimant’s expert evidence. The Defendant had raised workmanship issues in response to the letter of claim, and the Claimant had asked for calculations to justify the Defendant’s design but did not deal with the alleged workmanship issues. The Defendant’s calculations were provided, but the Claimant then did not respond for 19 months. When the Claimant wrote again, it stated it had expert support for its case but once more did not engage with the workmanship issues. The Defendant asked for a copy of the expert report on a without prejudice basis and again raised the lack of response to the issues about workmanship and causation. The Claimant did not provide the expert report and did not engage with workmanship issues in any meaningful way.

The judge accepted that the Defendant did not agree to the continued suggestions of mediation without having some understanding of the expert evidence, but held that this could not be described as unreasonable. Other forms of ADR were proposed by the Defendant throughout, and offers were being made. The nature of the dispute would not prevent a successful mediation, but having actively engaged, provided calculations and justification as to why the Defendant asserted it was not negligent, it was not unreasonable to require a meaningful response to the points made before mediation. Mediation may have cost up to £50,000, which was not an insignificant sum, especially when the Claimant was not providing information which was reasonably requested.

Once the expert evidence was available, the Claimant’s offer to consider mediation was only weeks before the start of the trial and was offered only on potentially disadvantageous terms to the Defendant. The judge held that failure to agree to earlier mediation, nor to the last suggestion of mediation on the terms demanded, could not reasonably be held against the Defendant. The Defendant’s reasoned rejection of one form of ADR, namely mediation, was not unreasonable. The legal issues were clear and largely agreed between the parties. The case would always depend upon the court’s assessment of the expert evidence. The Claimant’s refusal to disclose its expert evidence (even on a without prejudice basis) and its apparent failure to instruct its expert to consider all of the workmanship issues raised by the Defence would inevitably have had a significant impact on the likely success of any mediation.

Even had mediation taken place, the judge did not accept that it would have had reasonable prospects of success. The Claimant had not engaged with the Defendant’s allegations of poor workmanship nor provided its expert evidence. The Defendant’s reasonable wish to understand the case it was meeting was not just going to disappear. Offers were being made both ways in the run up to trial, but the parties remained a vast distance apart.

The expert’s late change of evidence

The judge did not accept the Claimant’s assertions that a “late change” of evidence by the Defendant’s expert supported a decision that no order as to costs was the appropriate costs order. The judge found that the Defendant’s expert was in error in asserting that a mass concrete taper was part of the Defendant’s design. However, as the need for a mass concrete taper was never part of the Claimant’s case that the Defendant’s design was negligent, this did not have a material bearing on the outcome of the litigation. The Claimant’s expert did not assert that a mass concrete taper was needed to make the design work. The first mention of the need for a mass concrete taper was about two months before trial when the experts produced their joint statement. The need for a mass concrete taper was only if adequate compaction could not be achieved under the relevant joint. The detail of the Defendant’s expert opinion on the need for a mass concrete taper came in his report served about one month before trial.

In both the joint statement and the report, the Defendant’s expert made it clear that he knew that the mass concrete taper was shown on the design drawing for a different joint. However, he was of the opinion that the Claimant’s workmen should have inferred that a mass concrete taper was also required under the relevant joint, even though it was not shown on the design drawings, because of the compaction issue. The Claimant’s expert opined that the necessary compaction could be achieved and that was the finding the judge made. The Defendant’s expert also produced some additional calculations shortly before trial. However, as was stated in the judgment, that was done to enable him to consider the evidence of the Claimant’s expert and the criticisms of the design and the conclusions drawn from them. The judge held this was classically an example of the sort of final “sense check testing” the court would expect from an expert, particularly when the expert evidence has been finalised very late in the day before trial. The judge accepted the Defendant’s submission that this was “simply part of the usual cut and thrust of a professional negligence trial”. In those circumstances, it was difficult to see how any additional costs were caused by the late calculations in any event.

Indemnity costs refused

The Defendant’s application for indemnity costs in respect of the expert phase was refused. The judge reminded herself that the question was whether there was something in the conduct of the action or the circumstances of the case which took the case out of the norm in a way which justified an order for indemnity costs. The judge was just persuaded that the answer to that question was no, and costs should be assessed on the standard basis throughout.

The judge had made findings in the substantive judgment that the Claimant’s expert did not properly understand his duties to the court pursuant to CPR 35, that he did not appear to have considered adequately the applicable legal test, and he did not deal with the workmanship issues raised by the Defendant adequately. He used an outdated edition of a technical publication to justify some conclusions without providing any reference to the updated edition. He carried out additional tests and reran the FE analysis immediately before trial without telling anybody he had done this nor providing anyone with the results. The Claimant lost the case because the judge had no confidence in its expert.

The judge agreed with the Defendant’s submission that this was not simply a case of the court preferring one expert’s evidence over another. The reality was that the criticism of this expert went beyond that. However, the judge accepted that the Claimant’s solicitors had put the correct test in the expert’s instructions, and the expert had set out the correct test in his written report and answered questions in a way which would indicate that he was considering the correct test when giving his opinion. When cross-examined, it became apparent that he was not correctly applying the test and had not given consideration to various matters to which the judge found he should have given consideration. The judge accepted that a claimant is responsible for their expert for the purposes of costs. However, she did not accept that there was sufficient material before trial in the expert’s reports to indicate to the Claimant’s legal team that their expert was going to give evidence in the way that he did. Further questions could perhaps have been asked of the expert during the proceedings. That may have been an error or a tactical decision. However, the judge did not accept that the asserted failure to spot the various problems with their expert’s evidence was sufficient to pass the high hurdle before indemnity costs are justified.

The Claimant made various tactical decisions in how to pursue its case against the Defendant for negligent design. Some tactical decisions would always be needed when a company associated with the Claimant has carried out the construction work for the design and that work is criticised by the Defendant as being the cause of the damage. With hindsight, it may have been better expressly to instruct the Claimant’s expert to deal with the various workmanship defects asserted by the Defendant. However, as the Claimant took the view that it only needed to prove that the defective design was “a” cause of the damage, it did not need to deal with all of those workmanship issues. The tactic was unsuccessful, but the judge accepted that deciding on the tactic did not take the Claimant’s lawyers’ conduct “out of the norm”.

It may have been that the Claimant’s legal team restricted its frame of reference in respect of the expert evidence required because of the analysis undertaken by John Frith. However, the tactic of concentrating primarily on identifying a negligent design and then establishing the negligent design was a cause of the damage, whilst unsuccessful, could not be said to take the conduct of the case so far out of the norm. The further criticisms of the Claimant’s lawyers, such as refusing to answer Part 18 further information questions, the judge would not find to justify indemnity costs. If the Defendant felt that the refusal to answer the questions was unjustified, it could have made an appropriate application.

The Claimant’s counsel asked for clemency for the Claimant’s expert as his reputation had been tarnished by the judgment, and he would have to live with the consequences of that. The judge did not accept that clemency should form any part of the court’s consideration. The question was whether there was something in the conduct of the action or the circumstances of the case which took the case out of the norm in a way which justified an order for indemnity costs.

The judge did not accept that the combination of the Claimant’s tactics and the Claimant’s expert approaching the case in a more technical rather than practical manner, then effectively going off on a frolic of his own immediately before trial and not giving the evidence expected during his oral evidence, created circumstances to justify an order for indemnity costs. It was of relevance that the expert evidence timetable was “concertina-ed” into a short time frame before trial. The joint expert report became available about three months before trial and the individual expert reports then followed. Supplementary expert reports were filed because of additional factors raised in the various reports which required a reply. The judge did not find in the circumstances of this case that the conduct of the Claimant’s lawyers was such that the action was conducted, or the circumstances were such, that it was out of the norm in a way which justified an order for indemnity costs.

Payment on account

The parties were agreed that a payment on account of costs should be made. Applying the principles in MacInnes v Gross [2017] 4 WLR 49, the Defendant sought £312,700.75, being the approved budget in the sum of £344,082, less 10% bringing that sum down to £309,673.80 and then adding interest at 4% of £12,386.96, payable within 21 days. The Claimant sought a reduction of 20% to take into account the fact that there was not a mediation which had been part of the budgeted costs. The Defendant objected to further reduction as the budgeted figure was for all forms of ADR. There was no justification to consider individual phases to reduce further. Any adjustment could be dealt with at detailed assessment.

The judge held that the starting point for assessment of a reasonable sum was a 10% reduction. She did not accept that it was reasonable or proportionate to increase the percentage reduction further in this case. Mediation did not take place, but other forms of ADR did. Interest would run on the costs payable. The judge accepted that 4% interest on pre-judgment costs was a reasonable percentage. She awarded interim costs in the sum of £309,673.80 plus interest at 4%.

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The High Court’s decision in Bargain Busting Ltd v Shenzhen SKE Technology Company Ltd [2026] EWHC 1146 (Ch) addresses the basis and quantum of costs following dismissal of a contempt application that the court found had been used to weaponise the criminal jurisdiction to pursue the applicant’s private interests.

Background

These proceedings arose from a contempt application brought by Bargain Busting Limited (“BBL”) against Shenzhen SKE Technology Company Limited, Stobbs IP Limited, Wan-Yi Tsai, and Jixuan Si. The contempt application was started in August 2025 and concerned allegations that the respondents had interfered with the administration of justice by writing to the Intellectual Property Office (“IPO”) to request that it delay registration of a trade mark pending the outcome of an application for permission to appeal to the Court of Appeal. The respondents included both the first defendant company and the solicitors and fee earners who had acted on its behalf, namely Stobbs IP Limited and two of its lawyers.

The substantive hearing took place before HHJ Paul Matthews, sitting as a Judge of the High Court in the Business and Property Courts in Bristol. On 23 April 2026, judgment was handed down ([2026] EWHC 933 (Ch)) dismissing the contempt application, together with associated strike out applications and a joinder application. The court commented adversely in that judgment on the use of the contempt jurisdiction in the circumstances of the case.

Following the handing down of the main judgment, written submissions were invited on consequential matters, including the basis of the costs order, the mode of assessment, whether a payment on account should be ordered, and permission to appeal. A clip of correspondence and attendance notes was also placed before the court for the purposes of those consequential matters. The consequential judgment was handed down on 13 May 2026.

BBL was represented by Aidan Eardley KC, instructed by Brandsmiths. The respondents were represented by Fiona Horlick KC and Charlotte Elves, with Kingsley Napley LLP acting for the first respondent and Hickman and Rose acting for the remaining respondents.

Costs Issues Before the Court

BBL accepted that it had been unsuccessful in the strike out applications, the contempt application, and the joinder application, and did not resist an order that it pay the respondents’ costs. The live issues before the court on consequential matters were therefore: first, whether those costs should be assessed on the standard basis or the indemnity basis; second, whether the costs should be subject to summary assessment or detailed assessment; and third, whether a payment on account should be ordered and, if so, in what amount. A fourth issue, namely permission to appeal, was also addressed.

The claimant calculated the total costs claimed by the respondents across their costs schedules as some £293,460. The court corrected this to £296,099.61 plus applicable VAT on the costs of Hickman and Rose, producing a total of £322,628.77. The respondents sought indemnity costs, relying on the conduct of BBL and its solicitors during the course of the litigation. BBL resisted the indemnity basis and submitted that, in any event, the costs should be subject to detailed assessment rather than summary assessment, and that no payment on account was appropriate.

The Parties’ Positions

The respondents’ position on the basis of assessment

The respondents argued that costs should be assessed on the indemnity basis. They contended that BBL by these proceedings had sought to weaponise the contempt jurisdiction against the defendants, to drive a wedge between the defendants and their lawyers, to strike fear and loss of professional status amongst the defendants’ lawyers, and to boast to the IP legal market.

The respondents relied on a number of features of BBL’s conduct during the litigation. First, an open offer of settlement had been made in August 2025, on the basis that BBL would discontinue and pay the respondents’ costs on the indemnity basis. That offer was maintained at various points and was not withdrawn until January 2026. Second, at a directions hearing on 16 January 2026, Trower J had remarked that the weaponisation of the contempt jurisdiction was a problem and that the application appeared to fall squarely into that category. Third, a letter dated 23 January 2026 from BBL’s solicitors had, in the respondents’ submission, threatened to report the second to fourth respondents to the Solicitors Regulation Authority unless the defendants agreed to pay BBL’s costs incurred in connection with the trade mark applications. Fourth, a without prejudice save as to costs telephone call on 11 March 2026 had, in the respondents’ submission, revealed that the contempt proceedings had been issued as a form of pressure on the defendants to cease attempting to persuade the IPO to delay registration of the trade mark.

BBL’s position on the basis of assessment

BBL submitted that the court had made no findings in the main judgment that its applications were abusive, or any other findings capable of taking the case out of the norm. It argued that the August 2025 offer was not a genuine offer to settle, as it required BBL to discontinue and pay costs on the indemnity basis. It also submitted that the respondents had not referred in correspondence to the points which ultimately succeeded, and had not made strike out applications until January 2026. As to the January 2026 letter, BBL submitted that it did not contain a threat to report the respondents to the SRA; rather, it explained that the conduct alleged would, if well-founded, amount to breaches of the SRA Code, and provided reassurance that BBL would not raise those matters in another forum if the contempt application were settled. BBL further submitted that the telephone call of 11 March 2026 had been mischaracterised, and that it represented a genuine attempt to resolve the proceedings.

Mode of assessment

The respondents submitted that summary assessment was appropriate, relying on paragraph 9.2 of CPR PD44, which provides that the court should make a summary assessment at the conclusion of a hearing lasting not more than one day. The hearing had lasted less than one day. BBL submitted that detailed assessment was appropriate, primarily because of the size of the costs claimed.

Payment on account

BBL submitted that a lack of clarity about the respondents’ costs made a payment on account inappropriate. The respondents sought a payment on account. BBL also raised points about duplication of effort between Stobbs IP and Kingsley Napley, both of whom had acted for the first respondent, and about the rates claimed in the costs schedules.

The Court’s Decision

Indemnity costs

The court ordered costs on the indemnity basis. HHJ Matthews confirmed that it was not necessary for the main judgment to have made findings on all matters relevant to the costs decision. The general conduct of the parties in litigation is not ordinarily an issue for determination in the substantive judgment, and the court may make supplementary findings for the purpose of consequential matters after giving the parties an opportunity to be heard. The court noted that it had, in any event, commented adversely on the weaponisation of the contempt jurisdiction in paragraphs 33 to 34 of the earlier judgment.

The court applied the well-established principle that an award of indemnity costs is appropriate where the conduct of the paying party or the circumstances of the case take it out of the norm: Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hammer Aspden and Johnson [2002] EWCA Civ 879; Hosking v Apax Partners Ltd [2019] 1 WLR 3347, [42]. The court also noted the range of factors that may be taken into account in such an assessment, as set out in Three Rivers DC v Bank of England [2006] EWHC 816 (Comm), [25].

The court observed that the proceedings themselves were of an unusual nature, making very serious allegations against officers of the court, and potentially having far-reaching professional consequences for those officers. In terms of seriousness, the court put the allegations in the contempt application on the same level as allegations of dishonesty. The court noted that there is no presumption that a failure to make good allegations of dishonesty should normally lead to an order for costs on the indemnity basis; instead, it is a factor to take into account, and may be a reason for making such an order: Thakkar v Mican [2024] EWCA Civ 552.

Three factors were identified as particularly significant. First, the nature of the alleged contempt: writing to the IPO to request a delay in registration pending an application for permission to appeal was described as the kind of thing solicitors do routinely, and was supported by the IPO’s own published practice and decisions. The court found it difficult to understand how BBL’s solicitors could have formed the view that such conduct amounted to a criminal offence. Second, the January 2026 letter: notwithstanding BBL’s submissions, the court found, to the civil standard, that the letter was intended to be read as a threat to report the respondents to the SRA unless they agreed to BBL’s terms. Even if that intention could not be established, the letter fell to be judged by its effect on the reasonable addressee, and any reasonable addressee would have understood it as such a threat. Third, the without prejudice save as to costs telephone call of 11 March 2026: the court found that the call made clear that the claimant justified the issue of criminal contempt proceedings in August 2025 as a form of pressure on the defendants to cease trying to persuade the IPO to delay registration of their client’s trade mark. Criminal proceedings should not be used for such a purpose.

The court held that, whether or not these various factors would each individually justify an award of costs on the indemnity basis, taken together they did so overwhelmingly. The claimant made very serious allegations against the defendants, and lost. It was wrong and out of the norm for the claimant’s solicitors opportunistically to seek to use criminal contempt proceedings, in which the touchstone is the public interest in the administration of justice, in order to pursue their client’s private interests. It was wrong and out of the norm for the claimant’s solicitors to threaten the defendants with being reported to the SRA in order to persuade them to agree to their client’s terms.

Mode of assessment

The court ordered that the costs should be subject to detailed assessment. This was not simply because the amount of money involved was significant. It was because these were complex and hard-fought multi-party proceedings which had lasted about eight months. On any view, a lot of work had been done by all those involved. The fact that the hearing which put an end to these proceedings lasted less than one day did not tell the full story. Justice to both sides required a detailed assessment.

Payment on account

The court ordered a payment on account of £215,000 under CPR rule 44.8, which provides that where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so. The court applied the guidance in Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm), in which Christopher Clarke LJ stated that what is a reasonable amount will depend on the circumstances, the chief of which is that there will, by definition, have been no detailed assessment and thus an element of uncertainty. Any sum will have to be an estimate. A reasonable sum would often be one that was an estimate of the likely level of recovery subject to an appropriate margin to allow for error in the estimation.

The court noted that this was complex, high-value work carried out by specialists on both sides, which would amply justify the London 1 guideline hourly rate. The claimant’s solicitors claimed rates in their costs schedules of £1,100 and £605 for grade A, £550 and £500 for grade B, £380 and £370 for grade C, and £240 for grade D, all of which considerably exceeded the London 1 rate. In contrast, those claimed by the defendants’ and Mr Rebling’s solicitors fell partly within and partly outside the London 1 rates, whilst those for Stobbs IP itself (when acting for the first defendant) were all within the London 1 rates. The claimant made a point about duplication of effort between Stobbs IP and Kingsley Napley, both of whom acted for the first defendant. The claimant also made a point about VAT on Kingsley Napley’s costs schedule, but this had been corrected.

The court referred to Thomas Pink Ltd v Victoria’s Secret UK Ltd [2014] EWHC 3258 (Ch), in which the judge made an order for a payment on account equal to 90% of the approved budget. Given that there was no approved costs budget for these proceedings, the court considered it should be more cautious. Overall, the court considered it should build in a margin of about one third, and ordered the claimant to pay £215,000 on account of costs, to be paid to the three solicitors’ firms pro rata to their schedules of costs.

Permission to appeal

The court refused permission to appeal. Under CPR rule 52.6, in a first appeal the court may not grant permission to appeal unless either there is a real prospect of a successful appeal or there is some other compelling reason why an appeal should be heard. The phrase ‘real prospect’ does not require a probability of success (that is, more likely than not), but merely means a prospect which is ‘not unreal’: Tanfern v Cameron-MacDonald [2001] 1 WLR 1311, [21]; Re R (A Child) [2019] EWCA Civ 895, [31]. If the application passes that threshold test, however, the court is not obliged to give permission to appeal; instead it has a discretion to exercise.

The claimant put forward five grounds of appeal, each containing multiple sub-points.

First ground: public interest. This ground contained three points. The first was that the court had wrongly directed itself that the presence of a private interest rules out the possibility of a party invoking the law of criminal contempt. The court rejected this, clarifying that what it had sought to express was that it was impermissible to use criminal contempt proceedings simply for the purpose of pursuing private interests. The second point was that the court had misunderstood the significance of BBL’s submission that there is no requirement for a person who brings a contempt application as of right to demonstrate some wider public interest. The court held that even if it had misunderstood the “significance” of the submission, the claimant did not say the court was wrong to say that a wider public interest must be shown. The third point was that the court was wrong to hold that BBL could not show any sufficient public interest in prosecuting these allegations of criminal contempt. The court held that this was an evaluative judgment, essentially part of fact finding, and that appellate courts will not interfere with evaluative judgments unless compelled to do so.

Second ground: the ‘Representations’. The claimant argued that the court was wrong to break down the ‘Representations’ into indicative and subjunctive/imperative statements and to disregard the latter. The court held that this missed the point: the complaint was that the solicitors had said things that they knew to be untrue, but you cannot tell lies in making a request or issuing a command. Moreover, the court had expressly gone on to deal with the position if it were wrong to break down the ‘Representations’ in this way.

Third ground: ‘interference’. This ground contained two points. The first was that the court’s finding that there could be no arguable ‘interference’ with the administration of justice was vitiated by mischaracterisation of the claimant’s case and failure to take into account the entirety of the statements complained of in the three emails. The court held that the allegation of “mischaracterisation” was not understood, and that it could not give permission for a ground which it did not understand. To the extent that this point depended upon the second ground, it must fail. The second point was that the court was wrong to hold that there could be no interference in circumstances where the IPO alone had the power to decide to register, it knew exactly what the legal position was, and acted in accordance with its own internal guidance at the time. The court held that this was an attempt to appeal against findings of fact, but that the appellant court will not interfere with that unless it is satisfied that the judge was plainly wrong, that is, that the decision was one that no reasonable judge could have reached.

Fourth ground: ‘impropriety’. This ground contained two main points. The first was that the court had mischaracterised the impugned communications as submissions about the meaning and effect of the order of the High Court. The court rejected this, clarifying that its view was that submissions that an order of the court should not yet be implemented for some reason or another were, in this context at least, not improper. There was nothing about “submissions about the meaning and effect” of an order. The second point was that the court’s rejection of the claimant’s case on impropriety was vitiated by its finding that there was simply no real prospect of showing at the hearing of the contempt application that the third and fourth defendants were doing otherwise than asking the IPO to implement its own guidance. The claimant argued that the court was wrong to make that finding because the emails made no reference to the guidance or to the practices of the IPO, and the third and fourth defendants did not give evidence. The court held that the third and fourth defendants could not be obliged to give evidence, and had chosen not to. Realistically, the court was never going to hear from them. Accordingly, the only material before the court on which it could make a finding was the emails, the manual, the decisions of Dr Porter and their own experience as IP lawyers. On that basis the court was entitled to make its finding. Once again, the claimant was simply challenging the court’s finding of fact, and the court saw no real prospect of an appellant court overturning it.

Fifth ground: mens rea. The claimant argued that the court’s conclusion that there was no real prospect of showing that the third and fourth defendants acted with the relevant mens rea was vitiated by its finding that there was simply no real prospect of showing that they were doing otherwise than asking the IPO to implement its own guidance. The claimant argued that that finding was not open to the court, for the reasons given under the fourth ground. The court held that since the fourth ground failed, so did the fifth. The court also noted that the mens rea point was strictly unnecessary anyway.

Since none of these five grounds had any real prospect of success, the court could not give permission to appeal on any of them. The claimant did not suggest that there was any other compelling reason for an appeal, and the application was therefore dismissed.

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And The Winner Is? Defendant Who Beat Both Strike Out and Summary Judgment Recovers 75% of Her Costs After 80% Costs Order Against Her Reversed on Appeal

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The High Court’s decision in Cook v Skeggs [2026] EWHC 1132 (KB) addresses the proper approach to costs where a defendant successfully resists both strike out and summary judgment applications but makes a late amendment application at the hearing.

Background

The underlying proceedings concern a possession claim brought by the Respondent, Leonard Cook, following his 2022 purchase of a property from the Appellant, Charlotte Skeggs. The property had been sold to Mr Cook for £250,000, having been purchased by Ms Skeggs in 2017 for £560,000. Mr Cook maintained that the transaction was voluntarily entered into. Ms Skeggs, who described herself as a vulnerable woman, alleged fraud and conspiracy, which Mr Cook denied.

The costs appeal before Mr Justice Sweeting arose from an order made by HHJ Parker on 12 March 2025, requiring Ms Skeggs to pay 80% of Mr Cook’s assessed costs of his strike out and summary judgment application. That application had been issued on 1 May 2024 and was listed for hearing in May 2024, but was not determined until 2 January 2025. At the January hearing, the application was dismissed following amendments proposed on behalf of Ms Skeggs at or shortly before the hearing.

The procedural history leading to the costs determination was somewhat involved. Mr Cook had issued his application for strike out and summary judgment shortly before the first costs and case management conference, which had been listed for 9 April 2024. The application notice did not identify the basis upon which either form of relief was sought and was unsupported by any evidence in support of the summary judgment limb. By an order dated 9 May 2024, HHJ Brown recorded that the CCMC had to be adjourned because the application did not comply with CPR 24.5(1) and had been issued too late to afford Ms Skeggs the 14 days’ notice required by CPR 24.4(5). Mr Cook was directed to amend the application.

The amended application notice remained expressed in generic terms, again failing to articulate the grounds relied upon for strike out or to provide any evidential basis for summary judgment, asserting only that both applications should succeed “as a matter of fact and law”. There then followed a period of procedural uncertainty arising from issues concerning capacity, which were addressed by HHJ Parker at a hearing on 25 October 2024. At that hearing, the court accepted that Ms Skeggs had insufficient material to understand the case advanced in support of Mr Cook’s application, and Mr Cook was granted permission to serve further evidence.

On 8 November 2024, Mr Cook served a witness statement in support of the application. That statement was substantially directed to disputing the factual merits of Ms Skeggs’ case and was therefore concerned principally, although not exclusively, with the summary judgment limb. Ms Skeggs served a re-amended Defence and Part 20 Claim on 6 December 2024, though the accompanying application notice was filed late on 9 December 2024. Mr Cook’s solicitors wrote on 16 December 2024 by way of without prejudice save as to costs correspondence, proposing that if Ms Skeggs confirmed by 4pm on 18 December 2024 that she would serve a further re-amended defence limited to the conspiracy allegation and properly particularised by 4pm on 31 December 2024, Mr Cook would consider consenting to the re-amended pleading and propose that the 2 January 2025 hearing be used for costs and case management directions. That offer also required Ms Skeggs to pay Mr Cook’s costs. No agreement was reached.

On 20 December 2024, Mr Cook served two further witness statements dealing with the factual merits of the case. Skeleton arguments were exchanged on 31 December 2024, at which point it became apparent that Ms Skeggs was abandoning her December application and advancing new proposed amendments relating to the conspiracy allegation, presented in the form of an annex to counsel’s skeleton argument rather than as a formal draft.

At the 2 January 2025 hearing, HHJ Parker dismissed both the strike out and summary judgment applications. In relation to summary judgment, the Judge found that the application would have failed irrespective of the amendments, concluding that Mr Cook had not come close to showing that Ms Skeggs’ factual case was merely fanciful. In relation to the strike out, the Judge permitted re-amendment of the defence, with the exception of references to Mr and Mrs Thorpe at proposed paragraphs 21A and 21B, which were not supported by sufficient pleaded facts. The issue of costs was adjourned to a further hearing on 12 March 2025.

At the 12 March 2025 hearing, HHJ Parker considered five categories of costs. In relation to the strike out and summary judgment application, the Judge ordered Ms Skeggs to pay 80% of Mr Cook’s assessed costs. The Judge also awarded Mr Cook his costs of the 12 March 2025 hearing, summarily assessed at £5,980.44, on the basis that the hearing had been necessitated by the late amendment application made on 2 January 2025. Mr Cook’s costs schedule for the half-day application totalled approximately £123,000, a figure which the Judge described as “fairly stunning”. Given the size of that figure, the Judge declined to embark on summary assessment and directed detailed assessment instead.

Ms Skeggs appealed the costs order with the permission of Sir Stephen Stewart. The appeal was heard by Mr Justice Sweeting on 31 March 2026. In advance of that hearing, Mr Anthony Ashley Wilson, the solicitor with conduct of the proceedings on behalf of Ms Skeggs, provided a witness statement dated 27 March 2026 in support of an application to amend the appeal notice and grounds of appeal. That application arose from a “Costs Breakdown” document attached to Mr Cook’s skeleton argument for the appeal, served after 4pm on 25 March 2026, which Mr Wilson stated he had not previously seen and which gave a total (after deducting draftsman’s fees and applying the 20% deduction in HHJ Parker’s order) of £29,254.56 for the costs of the application — substantially lower than the £123,464.60 figure that had been placed before HHJ Parker. Mr Justice Sweeting permitted Ms Skeggs to rely on Mr Wilson’s evidence and to amend her grounds of appeal accordingly.

Costs Issues Before the Court

The central costs issue on appeal was whether HHJ Parker’s order requiring Ms Skeggs to pay 80% of Mr Cook’s assessed costs of the strike out and summary judgment application was wrong within the meaning of CPR 52.21(3)(a). The appeal raised a number of discrete but related questions.

The first and most fundamental question was whether the Judge had properly identified the successful party on the application. Ms Skeggs had resisted both the strike out and the summary judgment application. The summary judgment application had been dismissed, and the Judge had found that it would have failed even absent the late amendments. The strike out application had also been dismissed, with the Judge permitting re-amendment of the defence in substantially the terms proposed by Ms Skeggs’ counsel. The question was therefore whether, in those circumstances, the Judge had been correct to order Ms Skeggs to pay a substantial proportion of Mr Cook’s costs rather than the other way around.

The second question was whether the Judge had properly distinguished between the two discrete elements of Mr Cook’s application — strike out and summary judgment — when determining the appropriate costs order. Ms Skeggs submitted that the summary judgment application had failed entirely and by a considerable margin, and that the Judge had not given proper effect to that finding. She argued that the Judge had treated the late amendment as having “completely changed the picture” in a way that was inconsistent with his own finding that summary judgment would have failed irrespective of the amendments.

The third question was whether the Judge should have made an issues-based costs order rather than applying a single percentage reduction. Ms Skeggs’ primary position was that she should recover her costs of the summary judgment issue and that Mr Cook should recover his costs of the strike out issue, or alternatively that there should be no order for costs. Mr Cook’s position was that the two applications were closely intertwined and that the Judge had properly exercised his discretion in applying a 20% reduction.

A further issue arose from the amendment application brought by Ms Skeggs in advance of the appeal hearing. That application raised questions about the accuracy of the costs information placed before HHJ Parker at the 12 March 2025 hearing, and whether the presentation of the £123,000 figure as the costs of the application had misled the Judge as to the scale of costs attributable to the strike out and summary judgment elements. Ms Skeggs sought to rely on CPR 44.11, which concerns unreasonable or improper conduct in relation to costs, submitting that Mr Cook’s failure to provide an accurate costs figure until shortly before the appeal hearing may fall within the circumstances covered by that provision.

The Legal Framework

The test on appeal is set out in CPR 52.21(3): the appeal court will allow an appeal where the decision of the lower court was wrong, or unjust because of a serious procedural or other irregularity in the proceedings in the lower court.

In Johnsey Estates v Secretary of State for the Environment, Transport and the Regions [2001] EWCA Civ 535, the Court of Appeal allowed an appeal against the original costs order. Chadwick LJ summarised the applicable principles: costs cannot be recovered except under an order of the court; the question whether to make any order as to costs is a matter entrusted to the discretion of the trial judge; the starting point for the exercise of discretion is that costs should follow the event; the judge may make different orders for costs in relation to discrete issues and should consider doing so where a party has been successful on one issue but unsuccessful on another; the judge may deprive a party of costs on an issue on which he has been successful if satisfied that the party has acted unreasonably in relation to that issue; and an appellate court should not interfere with the judge’s exercise of discretion merely because it takes the view that it would have exercised that discretion differently.

The last of those principles requires an appellate court to exercise a degree of self-restraint. It is not for an appellate court even to consider whether it would have exercised the discretion differently unless it has first reached the conclusion that the judge’s exercise of his discretion is flawed — that is to say, that he has erred in principle, taken into account matters which should have been left out of account, left out of account matters which should have been taken into account, or reached a conclusion which is so plainly wrong that it can be described as perverse.

Whilst the appeal in that case was heard just before the introduction of the Civil Procedure Rules, the general principles set out hold good and it remains the position that appeals against costs involve a high threshold. In particular, an appellate court must not dissect or reinterpret extempore judgments with undue textual scrutiny; the Judge is presumed to have known and applied the correct principles in exercising their discretion unless the contrary is demonstrated.

The Appeal Court’s Analysis

Mr Justice Sweeting concluded that HHJ Parker’s costs order was wrong within the meaning of CPR 52.21(3)(a). The Judge identified several fundamental flaws in the reasoning below.

First, the starting position was that Ms Skeggs was the successful party, having resisted both the strike out on pleading points and summary judgment on the merits of the defence. HHJ Parker had acknowledged that the summary judgment application was “distinctly different” from the strikeout application and would have failed even prior to amendment. The Judge had found that Mr Cook had not come close to showing that Ms Skeggs’ factual case was merely fanciful. Ms Skeggs had therefore demonstrated that she had a sufficient prospect of success, which alone militated against depriving her of her costs.

Second, Mr Justice Sweeting did not consider that it was possible in the circumstances of this case to regard the summary judgment application as merely ancillary to the strikeout or as representing just another way of articulating the same shortcomings in Ms Skeggs’ case. The summary judgment application was advanced on the basis of an assertion that there was no merit in the defence, supported by evidence dealing with the underlying factual matrix, and an invitation to the court to conclude that a conspiracy could not be made out, not simply that the particular species of conspiracy had not been properly identified or was insufficiently particularised. There was plainly a risk, if not a probability, that a substantial amount of work had been carried out in relation to summary judgment rather than the more narrowly defined pleading issue.

Third, HHJ Parker’s conclusion that “the picture had completely changed at the hearing” did not stand up to analysis and was difficult to reconcile with his findings in relation to summary judgment. The Judge had gone no further than saying that there “might” have been a different result on the strike out absent the amendments. It was always apparent that any deficiencies in the pleading could be cured by amendment. Mr Justice Sweeting found it difficult to see how the predictable legal result could have been that Mr Cook could embark upon the hearing on the basis that he would receive his costs irrespective of the outcome.

Fourth, there would have to be a significant reason, grounded in Ms Skeggs’ conduct, for reversing the usual order as to the incidence of costs on interlocutory applications. The relevant conduct in this case was the application for amendment made at the hearing which, while necessary, should have been made earlier in a proper form in accordance with the court’s directions. However, the appropriate way to reflect that conduct was to deprive Ms Skeggs of part of her costs, not to reverse the costs order entirely.

In Matrix Receivables v Must Holdings Limited [2024] EWHC 2167 (Ch), Freedman J observed that the usual order on a summary judgment or strike out application is that the unsuccessful party should pay the costs, in part because of the regime within CPR 44.2(2) and also because of a symmetry: if the applicant is successful, the action comes to an end and the applicant generally recovers the costs of the action; if the strategy does not pay off and the applicant loses, the applicant stands to bear the costs. It is a disincentive to interlocutory applications to know that this starting point exists and operates in practice.

Mr Justice Sweeting noted the practical difficulties in making a costs order on an issues basis, observing that in many cases the judge can and should reflect on the relative success of the parties on different issues by making a proportionate costs order (see Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd [2009] 1 Costs LR 155). Those difficulties are multiplied where the question is whether the winning party on the issue ought to be deprived of costs. The Judge could not see a proper basis on which to make different orders by reference to issues in the circumstances of this case.

Applying the principles in Johnsey Estates, Mr Justice Sweeting concluded that the correct approach was not to seek to recast HHJ Parker’s order but to exercise the discretion afresh. Ms Skeggs was entitled to her costs as the successful party. The appropriate reflection of her late amendment, which related only to the strike out limb, was a proportionate reduction rather than a reversal of the costs order.

The Costs Breakdown Issue

Mr Justice Sweeting also addressed the issue arising from the revised costs breakdown served with Mr Cook’s skeleton argument for the appeal. That document gave a total of £29,254.56 for the costs of the application (after deducting draftsman’s fees and applying the 20% deduction in HHJ Parker’s order), substantially lower than the £123,464.60 figure referred to at the hearing below. The status of the revised schedule was opaque, and it appeared to have been advanced for a tactical purpose shortly before the appeal hearing.

The Judge noted that there was only one verified costs schedule in relation to the summary judgment and strike out application, and that Mr Cook would have to explain a departure from that costs schedule if he asserted in future that the information given to HHJ Parker was inaccurate. However, Mr Justice Sweeting concluded that it was not appropriate or possible to make any findings in relation to conduct on the material before him, particularly in relation to the CPR 44.11 misconduct issue raised by Ms Skeggs.

The Judge expressed sympathy for HHJ Parker given the circumstances in which he had to decide issues of costs. He did not receive Ms Skeggs’ skeleton prior to the hearing and did not appear, initially, to have had the N260. The matter overran so that he had to see whether the court could sit beyond 4:30pm. He candidly accepted that he did not entirely recollect the basis of his earlier order and had to deal with costs at a hearing separate from the hearing to which they related. It appeared he may not have received the assistance that he should have done in relation to the nature of the costs which were being claimed.

Conclusion

Mr Justice Sweeting allowed the appeal and substituted an order under CPR 44.2(2) that Mr Cook pay Ms Skeggs’ costs of the contested strikeout and summary judgment application on the standard basis, subject to a reduction of 25%. The reduction reflected Ms Skeggs’ late amendment application, which related only to the strike out application and should have been made earlier in accordance with the court’s directions.

The Judge also ordered Mr Cook to pay Ms Skeggs’ costs of the appeal, to be summarily assessed. He gave the parties additional time to make written submissions in relation to those costs, noting that Ms Skeggs’ cost schedules appeared to show that all work was done at Grade A rates, which would require an explanation.

The decision reinforces the principle that the starting point for costs orders on interlocutory applications is that the unsuccessful party should pay the costs of the successful party. Where a defendant successfully resists both strike out and summary judgment applications, there must be a significant reason grounded in the defendant’s conduct to justify reversing that usual order. Late amendment may justify a proportionate reduction in the successful party’s costs recovery, but does not ordinarily warrant a complete reversal of costs liability, particularly where the first instance judge has found that one limb of the application would have failed irrespective of the amendment.

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