Monthly Newsletter Archives

Monthly Costs Law RoundUp | January 2026

Costs Orders, Assessment & Payments on Account

VAT On Costs In Liquidation | Moller & Ors v One Touch Solution Ltd (08/01/2026)

HHJ Pearce held that a receiving party in creditors’ voluntary liquidation could recover VAT on assessed costs, as Regulation 111(5) of the VAT Regulations 1995 permits post-deregistration VAT recovery by the estate via liquidators. However, the paying party was not liable for VAT where no actual loss was suffered, with the court drawing a careful distinction between insured and insurer for input tax purposes.

Reserved Costs of Interim Applications Determined at Trial | Gable Insurance AG v Dewsall & Others (08/01/2026)

Deputy Judge Robin Vos determined the reserved costs of interim applications including freezing orders, search orders and contempt proceedings following trial. Applying the Dos Santos v Unitel principles, the court held that the trial outcome remained a relevant factor when costs had been reserved, awarding indemnity costs where a party had relied on a discredited investigative report and making cross-orders reflecting the differing outcomes on each application.

Summary Assessment | Disproportionate Costs Reduced and Recovery Halved for Aggressive Conduct (15/01/2026)

Mr Justice Pepperall reduced claimed costs of £61,366 related to a strike out application to £12,000 on summary assessment, finding them disproportionate, with recovery further limited to 50% due to the claimants’ aggressive conduct in breach of CPR 1.3. The court warned that the parties’ combined budgets of £12.7 million were “enormous” and should not be expected to receive approval at those levels.

“Extraordinarily High” Costs With “Paucity Of Information” Result In £43 Million Payment On Account (21/01/2026)

Mrs Justice O’Farrell DBE ordered a payment on account of £43 million from a £189 million costs claim in the Fundão dam litigation, adopting a cautious approach given the limited supporting evidence. The court stripped out over £109 million in sign-up and collateral costs, applied a 10% reduction for issues lost and awarded pre-judgment interest on costs under CPR 44.2(6)(g).

Costs Procedure & Case Management

Non-Party Costs Order Against Secured Creditors Who Funded Insolvent Company’s Failed Claim (13/01/2026)

HHJ Stephen Davies made a non-party costs order under s.51 Senior Courts Act 1981 against secured creditors who funded an insolvent company’s failed construction claim. Applying Dymocks and Goknur, the court treated the creditors as the “real parties” to the litigation, ordering them to pay a further £995,000 beyond £583,000 in security already provided, holding that the provision of security for costs does not cap non-party costs liability.

CPR 3.14 | Relief From Sanctions Refused After Late Costs Budget (15/01/2026)

Recorder Singer KC refused relief from sanctions after a limited company failed to file its costs budget by the CPR 3.14 deadline, restricting future recoverable costs to court fees only. Applying the Denton three-stage test, the court held that the solicitors’ withdrawal did not constitute good reason, and that an unrepresented limited company remains subject to budgeting requirements unlike a litigant in person.

Hospira Three-Question Test Applied in Multi-Claim IP Litigation (15/01/2026)

Mrs Justice Joanna Smith DBE applied the Hospira v Novartis three-question framework to determine costs following mixed success in multi-claim IP litigation. The defendant was identified as the overall winner despite the claimants’ partial success on trade mark infringement, with the late abandonment of three substantial claims resulting in a net reduction of 30.6% from the defendant’s costs recovery and payments on account at 90% of budgeted and 70% of incurred costs.

Solicitor-Client Costs & Retainers

Fixed Recoverable Costs Irrelevant to Solicitor-Client Assessment (18/01/2026)

Senior Costs Judge Rowley held that fixed recoverable costs are irrelevant to solicitor-client assessment under the Solicitors Act 1974 and the Non-Contentious Business Remuneration Order 2009. The court endorsed the SGI Legal v Karatysz “step back” methodology, confirming that the “swings and roundabouts” fairness rationale applies only inter partes and that contractual terms govern the solicitor-client relationship.

CFA Termination | Accepting Repudiation Instead Of Using Contractual Rights Left Solicitor With Nothing (19/01/2026)

Mr Justice Marcus Smith upheld a nil assessment of a solicitor’s bill where the firm accepted a client’s repudiatory breach rather than relying on its contractual termination clause. Applying Dargamo Holdings and Barton v Morris, the court held that the contractual risk allocation in CFAs precludes restitutionary claims, and that quantum meruit is available only as a “last resort” where the contract does not already address the scenario.

Unless Order Stands | Defendants Fail To Evidence Impecuniosity After Non-Payment Of Interim Costs (26/01/2026)

Costs Judge Nagalingam dismissed an application to discharge an unless order following non-payment of a £741,122.85 interim costs order in solicitor-client proceedings. Applying Tibbles and the Denton principles, the court held that impecuniosity must be supported by “detailed, cogent and proper evidence” per Michael Wilson v Sinclair, with the defendants’ ability to secure €200,000 for legal representation undermining their claim of inability to pay.

Inadequate Estimate Fails To Establish Special Circumstances Under s70(3) (27/01/2026)

Costs Judge Leonard refused an application for assessment of 19 solicitor’s bills totalling £195,954.60, finding no special circumstances under s.70(3) of the Solicitors Act 1974. The initial estimate of £10,000–£15,000 was expressly preliminary and superseded, and the client’s conduct — including seeking £1.3 million in litigation funding and expressing a preference to stay with the firm — demonstrated they would have made the same choices regardless of updated estimates.

Trust & Estate Costs

Executors Lose Estate Indemnity After Hostile Removal Litigation (19/01/2026)

HHJ Paul Matthews held that executors who defended removal proceedings in their own interests rather than for the estate’s benefit lost their entitlement to indemnity under Trustee Act 2000 s.31. Indemnity costs were awarded against the executors personally, the court applying Excelsior for “out of the norm” conduct including self-dealing, delay in administration and accelerating a property exchange to pre-empt an injunction.

Does Removal As Trustee Always Mean Loss Of Indemnity? (29/01/2026)

Deputy Master Holden held that trustees removed on hostility grounds retained their right to indemnity from the trust fund. Applying Price v Saundry, the court found the trustees’ costs were properly incurred through reasonable defence of dismissed misconduct allegations and a good-faith early settlement proposal, whilst making no order as to costs between the parties due to the claimants’ unreasonable conduct in pursuing exaggerated allegations without pre-action correspondence.

Part 36 & Fixed Recoverable Costs

Part 36 Liability Offers | Mundy Overruled by the Court of Appeal (19/01/2026)

The Court of Appeal (Bean LJ, Phillips LJ, Stuart-Smith LJ) overruled Mundy v TUI UK Ltd, holding that CPR 36.17(4) enhanced costs consequences for Part 36 liability-only offers require an actual determination of liability rather than a global settlement. A 90:10 liability split remains valid in principle following Huck v Robson, and a court-approved settlement under CPR 21.10 constitutes “judgment” for Part 36 purposes.

Wrongful Interference With Goods Against Police Mandates Multi-Track Allocation | Part 36 Acceptance Does Not Oust Fixed Costs (31/01/2026)

Costs Judge Whalan held that a claim against the police for wrongful interference with goods fell within CPR 26.9(10)(e)(i) as it included an intentional tort, mandating multi-track allocation and excluding fixed recoverable costs. The court also held (obiter) that Part 8 costs-only proceedings issued after 1 October 2023 trigger FRCs for legacy settlements, and that Part 36 acceptance does not constitute “contracting out” under CPR 45.1(3).

For comprehensive coverage of all costs law developments, visit the
TMC Legal costs law updates archive.

Contact TMC Legal

For expert advice on costs budgeting, detailed assessment representation, or costs negotiation, contact TMC Legal Limited on
01628 526 236 or email
office@tmclegal.co.uk.

Monthly Costs Law RoundUp | December 2025

Monthly Newsletter, New News Article

Detailed Assessment & Procedure

CPR 47.8 | Master Brown Orders Unless Order For Commencement | CPR 47.7 Held To Be Mandatory (20/12/2025)

Master Brown confirmed that CPR 47.7 imposes a mandatory obligation to commence detailed assessment, not an option. The court held that CPR 47.8 discretion cannot be used to convert an interim payment into a final order, ordering the receiving party to serve a bill by way of an unless order despite an eight-year delay.

CPR PD 47 Para 8.2 | Costs Judge’s “Hands Tied” By Non-Compliant Points Of Dispute (20/12/2025)

Deputy Costs Judge Lightman demonstrated the consequences of Ainsworth-non-compliant points of dispute, allowing items in full where generic objections failed to engage with individual entries. The judge also permitted modest departures from guideline rates and addressed leading counsel instruction where prior involvement existed.

Solicitor Firm Debarred From Detailed Assessment For Failing To Disclose WhatsApp Communications (16/12/2025)

Costs Judge Nagalingam held that WhatsApp communications for which a client has been charged form part of the solicitor’s file for disclosure purposes in Solicitors Act proceedings. The defendant firm was debarred from the detailed assessment for failing to comply with an unless order requiring complete disclosure.

Judicial Review Costs

Costs In Settled Immigration Judicial Reviews | “Will Be Made” Creates A Legal Obligation; “Aims To Issue” Does Not (17/12/2025)

The Court of Appeal distinguished between binding commitments and aspirational targets in SSHD correspondence. Where a letter stated a decision “will be made” by a specified date, breach justified proceedings and costs recovery; an “aims to issue” formulation created no such obligation.

Costs In Discontinued Judicial Review | When A Change Of Government Breaks The Causal Chain (17/12/2025)

The Court of Appeal upheld no order as to costs where a judicial review became academic following a change of government already committed to repealing the challenged legislation. The court found no causal link between proceedings and outcome, precluding costs recovery despite the claimant achieving their substantive objective.

Parties Cannot Be Expected To Second-Guess Their Experts | Planning Inquiry Costs Award Quashed (06/12/2025)

The Court of Appeal quashed a costs award against a council whose expert conceded key points under cross-examination. There is no normal procedural requirement to test expert evidence in advance, and parties cannot be expected to second-guess their experts.

Costs Orders & Discretion

No Order As To Costs Where Neither Party Is The “Successful Party” | Matrix v Musst (07/12/2025)

Sir Clive Freedman held that a money judgment in the claimant’s favour did not make it the successful party where recovery represented less than 5% of the claim and commercially significant claims failed entirely. The paying party test is relevant but not determinative.

Permission To Appeal Costs | When Hopeless Grounds And False Citations Justify A Costs Award Against The Applicant (07/12/2025)

Mr Justice Constable awarded respondent costs at a permission hearing where exceptional circumstances existed, including hopeless grounds, persistent undisciplined submissions, and AI-generated false authorities. A limited civil restraint order was also imposed.

Multi-Party Litigation & Trust Costs

Co-Claimants Pursuing Common Case Face Joint And Several Liability For Adverse Costs (09/12/2025)

Mr Justice Nicklin and Senior Master Cook held that claimants pursuing interconnected claims based on common allegations face joint and several liability for adverse common costs. The court also allowed budget variations for legacy email archive costs as recoverable litigation expenses.

High Court Preserves Indemnity For Unsuccessful But Honest Executor Removal Applicants (17/12/2025)

HHJ Charman confirmed that classification of executor removal proceedings as hostile litigation does not automatically deprive unsuccessful applicants of their trustee indemnity, provided their conduct was honest and reasonable. The claimants could recoup costs paid from the estate.

Part 36

Consent Orders Settling Quantum Constitute ‘Judgment’ For CPR 36.17 Purposes (16/12/2025)

HHJ Freedman held that a consent order requiring payment of an agreed damages sum constitutes a judgment for CPR 36.17 purposes, applying the Vanden Recycling principle that substance prevails over form. Enhanced costs consequences were triggered where the settlement exceeded the claimant’s Part 36 offers.

For comprehensive coverage of all costs law developments, visit the TMC Legal costs law updates archive.

Contact TMC Legal

For expert advice on costs budgeting, detailed assessment representation, or costs negotiation, contact TMC Legal Limited on
01628 526 236 or email office@tmclegal.co.uk.

Monthly Costs Law RoundUp | November 2025

Monthly Newsletter, New News Article

Indemnity Costs | Unfounded Claims & Dishonest Conduct

Probate Challenger Ordered To Pay Indemnity Costs After Maintaining Baseless Opposition For Eight Years (04/11/2025)

In Burgess v Whittle [2025] EWHC 2829 (Ch), HHJ Paul Matthews held that maintaining a probate challenge without reasonable basis for eight years constituted grossly unreasonable conduct justifying indemnity costs. The court rejected the Spiers v English exception, finding the deceased’s estrangement and beneficiary changes within family provided no grounds for suspecting will invalidity. The first defendant’s last-minute concession only on the eve of trial, requiring the successful claimant to travel from Australia for an unnecessary hearing, compounded the finding of conduct outside the norm.

Are Courts Bound By Summary Assessment Principles When Ordering Pro Bono Costs Under Section 194? (09/11/2025)

In EJW Builders Ltd v Marshall [2025] EWHC 2898 (Ch), HHJ Paul Matthews reduced notional pro bono costs from £393,329 to £117,000 under section 194 of the Legal Services Act 2007, applying a broad brush approach and guideline hourly rates as a benchmark. The court emphasised that pro bono costs orders serve dual purposes—levelling the litigation playing field and funding organisations offering free legal help—and the court should “err on the side of caution” in assessment. Excessive solicitor attendances and disproportionate document work were substantially reduced despite counsel’s fees being allowed in full.

Failed Fraud Allegations Justify Indemnity Costs Order Despite Proper Conduct (09/11/2025)

In Malhotra Leisure Limited v Aviva Insurance Limited [2025] EWHC 2901 (Comm), Nigel Cooper KC ordered indemnity costs despite Aviva’s fraud allegations being properly pleaded and responsibly pursued through experienced counsel. Six factors justified the order: the exceptional seriousness of conspiracy allegations; foreseeable financial and reputational harm to the claimant; pursuit through to trial without settlement discussions; objective weakness apparent from the outset regarding the financial motive; an evolving case theory at trial with unpleaded allegations; and late withdrawal of specific allegations after substantial opposing party costs. The judgment confirms that technical compliance with pleading requirements does not prevent indemnity costs where overall circumstances take the case out of the norm.

Indemnity Costs Awarded Where Defences Were ‘Built On Deliberate Lies’ (13/11/2025)

In JSC Commercial Bank Privatbank v Kolomoisky [2025] EWHC 2909 (Ch), The Honourable Mr Justice Trower awarded the claimant indemnity basis costs on the grounds of defences built on deliberate falsehoods, significant disclosure failures, non-attendance of defendants as witnesses, belated abandonment of key arguments, and unsatisfactory expert evidence viewed in the round. The court ordered an interim payment of £76.4 million and awarded pre-judgment interest at Bank of England base rate plus 3% from payment dates, reflecting commercial borrowing costs and the serious fraud underlying the proceedings.

Indemnity Costs Awarded Where Proprietary Estoppel Claim Pursued As “Anvil For Settlement” Against Elderly Mother (19/11/2025)

In Grijns v Grijns [2025] EWHC 2853 (Ch), Master Bowles (Sitting in Retirement) awarded indemnity costs where the claimant pursued litigation as an “anvil for settlement” through invented assurances, capacity allegations raised solely for pressure, and a tactical committal application issued one month before trial. The court found the proprietary estoppel claim was based on assurances that had been constructed for litigation purposes and were wholly inconsistent with contemporaneous documents. The claimant’s conduct, viewed in the round, was outside the norm despite the defendants’ failure to mediate and rejection of settlement offers.

Detailed Assessment & Bill Defects

CPR 44.11 | 75% Costs Reduction For Egregiously Defective Bill | Solicitors Remain Vicariously Liable For Costs Draftsman Failures (10/11/2025)

In Hyder v Aidat-Sarran [2024] EWHC 3686 (SCCO), Deputy Costs Judge Roy KC refused strikeout but imposed a severe 75% costs reduction under CPR 44.11 where original and subsequent bills contained multiple egregious, persistent, and unrectified defects. The court held that solicitors bear full vicarious responsibility for costs draftsmen’s failures and cannot avoid sanctions by blaming their agents; solicitors must apply proper superintendence and oversight regardless of agent involvement. The draconian sanction of strikeout was declined on a very narrow balance, but the substantial reduction reflected the seriousness of the conduct.

Part 36 Consequences In Detailed Assessment | De Minimis Form Errors Will Not Invalidate Offers (24/11/2025)

In Stockler v The Corporation of the Hall of Arts and Sciences [2025] EWHC 3080 (SCCO), Deputy Costs Judge Joseph held that a clerical error misdescribing a defendant’s Part 36 offer as a “claimant’s offer” on form N242A was de minimis and did not invalidate the offer or prevent CPR 36.17 consequences applying. The offer was clear, made shortly after pleadings closed, and provided sufficient information for evaluation; CPR 36.17(4)(c) consequences applied with interest on costs at 8% per annum until offer expiry and 14% thereafter. The court rejected arguments that Ainsworth rulings and disallowance of amendments made it unjust to apply Part 36 consequences.

Security for Costs

Security For Costs Under CPR 3.1(5) Ordered As Alternative Sanction To Debarring For Non-Compliance (05/11/2025)

In Serious Fraud Office v Smith (Thomas debarring application) [2025] EWHC 2876 (Comm), Henshaw J refused to debar Mr Thomas from participating in enforcement proceedings but ordered security for costs of £200,000 as a proportionate sanction for serious non-compliance with procedural orders. The court held that debarring is a draconian remedy of last resort and that security for costs under CPR 3.1(5) can serve as an effective alternative where breach of court orders has occurred, though the judge may consider the defendant’s history of non-payment and the proportionality of any sum ordered.

SCCO Rules That Solicitors Act Proceedings Qualify As “Claims” For CPR 25.26 Purposes But Dismisses Security Application On The Facts (17/11/2025)

In Pickering v Thomas Mansfield Solicitors Limited [2025] EWHC 3021 (SCCO), Costs Judge Nagalingam held that Solicitors Act assessment proceedings constitute a “claim” for CPR 25.26 purposes and security for costs applications are therefore permissible. However, the application failed on the substantive test under CPR 25.27(b)(vi) because the paying party’s financial transactions—including mortgage repayments, property investments, and loan repayments—converted liquid funds into other enforceable assets rather than dissipating them. The court held that the evidential burden rested squarely on the applicant and that the paying party bore no obligation to prove ability to pay.

Proportionate & Appellate Costs Orders

CPR 63.26(2) | IPEC Costs Order Quashed Where ‘Unreasonable Conduct’ Finding Overstated Application’s Lack Of Merit (18/11/2025)

In Costa v Dissociadid Ltd [2025] EWCA Civ 1475, Lord Justice Zacaroli allowed an appeal against an immediate IPEC costs order, holding that findings of “unreasonable behaviour” under CPR 63.26(2) cannot rest on overstated characterisations of applications as “so lacking in merit” where key arguments have real prospects of success. The court found the claimant’s argument regarding scope of the damages claim was arguable and that the judge had erred in failing to address the Part 18 aspect of the application before making the costs order.

Successful Defendant’s Costs In Judicial Review Claim Reduced by 15% for Partial Failure On Discreet Issue (12/11/2025)

In R (on the application of Prestige Social Care Services Ltd) v Secretary of State for the Home Department [2025] EWHC 2860 (Admin), HHJ Tindal dismissed the judicial review claim but reduced the defendant’s costs by 15% to reflect partial failure on the Annex C1 non-genuine vacancy ground. The court applied a broad-brush discretion recognising that most costs in multi-ground judicial review were “common costs” incurred regardless of which ground succeeded, and that the successful party would have won on alternative grounds in any event.

CPR 36.17(4)(c) Interest Calculation

CPR 36.17(4)(c) | How To Calculate Enhanced Interest On Costs — Aggregate Method Applies (26/11/2025)

In Barry v Essex County Council [2025] EWCC 64, Deputy District Judge Rathod held that enhanced interest on costs awarded under CPR 36.17(4)(c) is calculated using the aggregate costs method, applying interest at the enhanced rate to the total sum of all post-offer costs from expiry to the date of the costs order. The court rejected the individual item method as unworkable in practice, particularly in summary assessment contexts where individual dates of incurrence are not examined, and found the aggregate method consistent with the post-Jackson reforms’ “carrot and stick” policy designed to encourage settlement.

For comprehensive coverage of all costs law developments, visit the TMC Legal costs law updates archive. Each month brings significant decisions affecting detailed assessment, budgeting, indemnity costs, and settlement mechanics—sign up for our monthly newsletter to stay informed.

Contact TMC Legal

For expert advice on costs budgeting, detailed assessment representation, or costs negotiation, contact TMC Legal Limited on 01628 526 236 or email office@tmclegal.co.uk. Our experienced costs lawyers provide nationwide representation and specialist support across all aspects of civil costs law.

Monthly Costs Law RoundUp – October 2025

Monthly Newsletter, New News Article

Appellate Costs

Variation Of Costs Orders After Successful Appeal | When Previous Orders Should Stand (05/10/2025)
The Court of Appeal (Moylan LJ, Falk LJ, Cobb LJ) refused to vary a 2021 costs order in Potanina v Potanin (No.2) (Costs) [2025] EWCA Civ 1223 despite the husband’s subsequent Supreme Court success, holding that where the fundamental basis of earlier success remains undisturbed by appellate decision on different grounds, the original costs order should stand. Payment on account ordered at £350,000 (approximately 72% of costs claimed) within 60 days, but set-off against Supreme Court costs liability rejected.

Costs Cross-Appeal Fails Where Challenge Arose From Applicant’s Own Default (09/10/2025)
Lord Justice Coulson upheld costs orders against a relief from sanctions applicant in Google LLC v Robertson [2025] EWCA Civ 1262, finding the respondent’s jurisdictional challenge—though unsuccessful—arose directly from the applicant’s service default. The high threshold for overturning discretionary costs orders on appeal (SCT Finance v Bolton) meant reduction might have been appropriate but the judge’s decision wasn’t wrong.

Section 51 Jurisdiction

High Court Removes The “Murphy” Exceptionality Test For Inter Partes Costs In Criminal Judicial Reviews (06/10/2025)
The Divisional Court (Lady Justice Whipple and Lady Justice Yip) overturned Murphy v Media Protection Services in R (Bates) v Highbury Corner Magistrates’ Court [2025] EWHC 2532 (Admin), restoring full s.51(1) Senior Courts Act 1981 discretion for costs in criminal judicial reviews. No “exceptionality” requirement applies—CPR 44.2’s general rule governs, with unsuccessful parties ordinarily paying costs.

Supreme Court

When Should Costs Be Awarded In A Foreign Currency? Supreme Court Rejects ‘Loss Reflection’ Test (23/10/2025)
Lord Hodge and Lady Simler held in Process & Industrial Developments Limited v The Federal Republic of Nigeria [2025] UKSC 36 that costs orders should ordinarily be awarded in the currency of invoicing and payment, rejecting the “loss reflection” test from Cathay Pacific. The court distinguished costs awards from compensatory damages, emphasising costs are discretionary contributions under s.51 Senior Courts Act 1981 and CPR 44.2, not full indemnities for loss. No inquiry into funding arrangements required to avoid disproportionate satellite litigation. The default rule is currency of invoicing and payment; exception only where the currency choice is abusive or speculative.

Indemnity Costs & Dishonest Conduct

Can Unreasonable Refusal To Mediate Lead To Indemnity Costs On Appeal Even Where Permission Is Granted? (06/10/2025)
HHJ Paul Matthews held in Fernandez v Fernandez [2025] EWHC 2530 (Ch) that a 10-week delay coupled with rejecting all 26 mediation dates constituted “out of the norm” conduct justifying indemnity costs on appeal. Permission to appeal doesn’t immunise parties from costs sanctions, and the executor lost estate indemnity for pursuing the appeal in their own interest rather than the estate’s benefit.

Dishonest Evidence And Baseless Allegations Justify Indemnity Costs Order (16/10/2025)
Mrs Justice Steyn awarded indemnity costs and a £3 million payment on account in Clarke v Guardian News & Media Ltd [2025] EWHC 2575 (KB) where the claimant made dishonest pleaded statements, advanced baseless allegations against witnesses, and made unfounded allegations against professional journalists in a failed defamation claim. The court applied Esure Services v Quarcoo, confirming that inability to pay is irrelevant at the costs order stage (Bank St Petersburg principle).

Director Ordered To Pay Creditor’s Costs Personally Despite Rule 3.4 In Failed Administration Application (30/10/2025)
ICC Judge Barber held in Settle v Sandstone Legal Ltd [2025] EWHC 2771 (Ch) that rule 3.4 IR 2016 doesn’t shield directors from personal costs orders under s.51 Senior Courts Act 1981 where they are the “real party” pursuing litigation for personal benefit with knowingly false evidence. The director’s costs as applicant were capped at the issue fee only, as rule 3.12(2) IR 2016 must be read subject to s.51 and CPR 44.2. Pre-administration expenses require “sufficiently direct and appropriate connection” to the eventual administration.

Detailed Assessment

Default Costs Certificate Set Aside Due To Unexplained 300% Costs Increase Despite Defective Application (06/10/2025)
Deputy Costs Judge Erwin-Jones set aside a Default Costs Certificate under CPR 47.12 in Akhtar v Bashir [2025] EWHC 2218 (SCCO) where costs jumped 300% between the statement of costs (N260) and bill without explanation. The difference between legal aid rates and inter partes billing proved insufficient justification, though the applicant’s conduct was “only very slightly short of opportunistic.” The court made no costs order, finding neither party had furthered the overriding objective.

Multi-Party Litigation

Sanderson Orders Appropriate Where Claimant Aligns With Successful Defendant On Key Issue (06/10/2025)
Mr Justice Butcher awarded 100% Sanderson orders in the Russian Aircraft Lessor Policy Claims [2025] EWHC 2529 (Comm) where claimants supported the successful defendant’s case on coverage issues. However, claimants who failed on their primary case recovered only 65% of costs. Compound interest and US Prime rate challenges failed absent proper pleading, with payments on account ordered accordingly.

Apportioning Defendants’ Costs By Time | When Evolving Claims Engage Separate Interests (23/10/2025)
Jonathan Hilliard KC sitting as Deputy Judge held in Jon Flowith & Partners v Greaves & Ors [2025] EWHC 2738 (Ch) that separately represented defendants with distinct interests were entitled to costs from the date the claimant’s skeleton argument engaged those interests, but earlier costs were reserved pending final hearing. The court applied Bolton MDC, finding the “interest which requires separate representation” test satisfied where competing constructions of a Promotion Agreement clause directly implicated D1/D2’s liability position.

Security for Costs

Security For Costs Application Under CPR 25 | Financial Difficulties and Late Claims (13/10/2025)
David Elvin KC ordered security for costs of £1,500,000 (75% of estimated costs) in Baker Botts (UK) LLP v Carbon Holdings Ltd & Ors [2025] EWHC 2225 (Comm), finding compelling evidence of the Part 20 claimant’s financial difficulties despite claimed “transformation” through debt restructuring. The court rejected arguments that recent working capital facilities and debt settlement addendums represented genuine improvement, noting the arrangements likely reflected banks protecting their position. The 75% award (higher than the typical 60-70% discount) reflected the late and tactical nature of a professional negligence counterclaim brought four years after the alleged breach with no prior complaint.

Part 36 Offers

Part 36 Consequentials | Enhanced Interest, Indemnity Costs And 100% Payment On Account (06/10/2025)
HHJ Russen KC awarded full CPR 36.17(4) consequences in Learning Curve (NE) Group Limited v Lewis [2025] EWHC 2491 (Comm) after claimants recovered exactly the sum offered pre-trial, including enhanced interest at 8% above base rate, the £75,000 additional amount, and 100% payment on account (not the usual 90%) due to the indemnity basis element. Five challenges to Part 36 consequences all failed, with the court confirming that arguments about avoidable expense typically reinforce rather than undermine the regime.

Part 36 Validity, Protocol Breaches And Mediation Timing In Probate Disputes (14/10/2025)
HHJ Michael Berkley held in Ellis v Ellis Re: Care (Decd) [2025] EWHC 2609 (Ch) that Part 36 offers remain valid even where offerors don’t yet own the assets being offered, and that delaying mediation pending disclosure from opposing parties is reasonable. Full CPR 36.17(4) consequences applied with enhanced interest at 5% above base on costs (reduced from the typical higher rate), executors recovered litigation costs against the unsuccessful challenger, and payment on account ordered at 90% of budgeted costs.

Can A Vulnerable Party’s Change Of Mind Justify Part 36 Withdrawal Of An Accepted Part 36 Offer? (27/10/2025)
Senior Master Cook refused permission to withdraw an accepted Part 36 offer in Chinda v Cardiff & Vale University Health Board [2025] EWHC 2692 (KB), holding that client vulnerability and medical conditions affecting concentration do not constitute a “change of circumstances” under CPR 36.10(3) where no objective change occurred. The court distinguished between change of mind and change of circumstances (Cumper v Pothecary), emphasising Part 36’s certainty and predictability. Overriding objective vulnerability provisions relate to participation and evidence-giving, not settlement decisions.

Fundamental Dishonesty

Can Defendants Be Ordered To Pay Costs When Fundamental Dishonesty Allegations Fail? (14/10/2025)
Deputy High Court Judge David Pittaway KC ordered defendants to pay 15% of the claimant’s costs from the date fundamental dishonesty allegations were raised in Hakmi v East & North Hertfordshire NHS Trust [2025] EWHC 2597 (KB). Rejecting the “free tilt” argument under s.57 Criminal Justice and Courts Act 2015, the court held that failing to make an order would give defendants a free tilt at reputational damage despite the claimant losing the underlying clinical negligence claim on fundamental dishonesty grounds.

Discontinuance & Contempt

When Interlocutory Costs Orders Survive Discontinuance But Underlying Conduct Is Penalised (19/10/2025)
Mr Justice Freedman held in MEX Group Worldwide Limited v Ford & Ors [2025] EWHC 2689 (KB) that CPR 38.6 discontinuance principles generally prevail even where contempt has been proven, particularly where the underlying freezing order was wrongly obtained through material non-disclosure. Interim costs orders totalling £50,000 survived discontinuance (Dar El Arkan principle), but contempt costs were reduced to 50% on standard basis (not indemnity) reflecting the WFO should never have been granted. Inquiry as to damages ordered despite proven contempt.

Costs Orders & Judicial Discretion

Percentage-Based Costs Order Upheld For Litigation With Mixed Outcomes (20/10/2025)
Mr Justice Cawson upheld a 50/50 percentage-based costs order on appeal in Daniel Family Homes Limited v Gold [2025] EWHC 2697 (Ch), emphasising the “formidable obstacle” and “great deal of persuading” required to interfere with a trial judge’s costs discretion. The court held trial judges have a wide margin of appreciation in mixed-outcome litigation and are best positioned to assess overall success and conduct. Ground 2 of the appeal succeeded (£84,000 trespass damages awarded) but the costs order remained unchanged.

When Can “Neutral” Defendants Face Costs Orders In Judicial Review? (21/10/2025)
Deputy High Court Judge David Pievsky KC refused to vary a “costs in case” order to “no costs” in Medis Pharma Ltd v NHS Resolution [2025] EWHC 2616 (Admin), finding the defendant’s Summary Grounds had “pushed back” on factual and error points, preventing it from attaining truly neutral status under the Davies principle. The court refused relief from sanctions for a skeleton argument filed the day before hearing (13 days late), forcing the claimant to rely on its original Statement of Facts and Grounds instead.

Costs Capping

Costs Capping Inappropriate Where Unrecovered Costs Shift To Non-Party Tenants (17/10/2025)
Lord Justice Birss (with Lord Justice Nugee concurring) refused a CPR r52.19 costs capping order in Spender v FIT Nominee Ltd [2025] EWCA Civ 1319, finding the effect would shift unrecovered costs from 70 appellant tenants to 366 non-participating tenants through Landlord and Tenant Act 1985 service charge recovery provisions. The court identified the “real contest” as between participating and non-participating tenants, not landlord versus tenants, making costs capping unjust despite access to justice concerns.

CPR 46.27 Variation Refused Despite Financial Resources | Objective Unreasonableness Test Applied (28/10/2025)
Fordham J refused to vary Aarhus Convention costs caps in R (The Badger Trust and Wild Justice) v Natural England [2025] EWHC 2761 (Admin), holding that CPR 46.27’s “prohibitively expensive” test comprises two independent limbs: real-world affordability and objective unreasonableness. The court found variation objectively unreasonable despite claimants’ financial resources, emphasising default Rule 26 caps represent a “soft presumption” and that paradigm environmental protection cases require “space to be a repeat player.” The decision warned of the chilling effect financial scrutiny has on environmental NGOs’ access to justice.