Non-Compliant Points Of Dispute Risk Strike Out Or Costs Sanctions | Court Of Appeal Warning In Ward v Rai

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The Court of Appeal (Civil Division)’s decision in Ward v Rai [2026] EWCA Civ 816 restores a Costs Judge’s refusal to strike out non-compliant Points of Dispute and warns paying parties that paragraph 8.2 of PD 47 requires an Ainsworth compliant approach.

Background

Ward v Rai arose from a road traffic accident on 18 September 2019. Mr Paul Ward brought proceedings against Mr Gagandeep Rai, who admitted liability subject to issues of causation and quantum. The underlying claim settled in January 2023 by acceptance of a Part 36 offer in the sum of £546,984.

Detailed assessment proceedings were commenced by the claimant on 3 August 2023. Item 39 of the bill of costs claimed 134.1 hours for work done on documents, supported by a 24-page schedule, at a cost of £38,819.50 plus VAT. Of that time, 126.7 hours were attributed to a Grade A fee earner, with the balance at Grade D. Work on documents represented approximately half of the total profit costs claimed. The total bill, including counsel’s fees and disbursements, came to £129,196.50 including VAT.

The defendant served points of dispute on 30 August 2023. Point 23 of those points of dispute challenged item 39, raising a series of general criticisms about the document time claimed and indicating that the defendant would rely on an annotated documents schedule to support those challenges. No such schedule was served at that stage. The claimant replied on 4 January 2024, taking issue with the adequacy of Point 23 and relying on Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178 in support of an argument that the point lacked the specificity required by paragraph 8.2(b) of Practice Direction 47. The claimant nonetheless responded to the general points raised and indicated a willingness to accept a total of 130 hours.

A two-day detailed assessment hearing was requested on 26 March 2024 and listed for 5 and 6 August 2024. At around 4.45pm on 31 July 2024, after hours in service terms, the defendant filed and served the annotated documents schedule that had been referenced in Point 23. This was the first time individual items in dispute were identified. The schedule offered 58.5 hours as a primary case and 58.8 hours as a fallback, divided into eight categories that did not correspond to the eight points listed in Point 23.

At the hearing, Point 23 was not reached until the latter part of the second day. The claimant applied to Deputy Costs Judge Friston to strike out Point 23 as non-compliant with Ainsworth and to refuse permission to rely on the annotated schedule. In an ex tempore judgment, the Costs Judge declined to do either and adjourned the detailed assessment to a third day.

The adjourned hearing took place on 8 November 2024. The Costs Judge conducted a line-by-line assessment of approximately 10% of the entries in the documents schedule, with the remainder assessed on a broadbrush basis agreed by the parties. The bill was assessed in the sum of £89,032.62 plus interest. On costs of the assessment itself, the outcome was affected by a Part 36 offer made by the defendant. The claimant had offered to settle costs at £105,000 and the defendant had offered £100,000. The assessed figure fell below the defendant’s offer, with the result that the defendant was ordered to pay the claimant’s costs of the detailed assessment up to 3 July 2024, and the claimant was ordered to pay the defendant’s costs thereafter. However, the defendant’s costs were to exclude time spent on 6 August 2024 dealing with the annotated documents schedule, on the basis that part of that afternoon had been wasted. The narrow gap between the offers may provide some explanation for what might otherwise seem an uneconomic appeal.

The claimant appealed to the High Court on five grounds. Mrs Justice Hill, sitting with Costs Judge Leonard, rejected each of the individual grounds but allowed the appeal on the basis of what she described as a residual, overarching argument: that the Costs Judge’s approach was wrong and failed to give proper effect to paragraphs 8.2(b) and 13.10(2) of PD 47. The Judge set aside the order made at the adjourned hearing, struck out Point 23, and refused permission to rely on the annotated documents schedule. The matter was remitted to the Costs Judge to determine consequential issues, including proportionality.

The defendant appealed to the Court of Appeal. Permission was granted by Lewison LJ, who noted the unusual nature of the case and observed that it was well arguable that the Judge had simply disagreed with the Costs Judge, notwithstanding her acknowledgment of the limited bases on which a case management decision can be disturbed on appeal. The Court of Appeal heard the appeal on 17 June 2026 and handed down judgment on 2 July 2026. A Respondent’s Notice contended that, in deciding whether to admit variations to points of dispute, the court should first categorise whether the variation was curative of non-compliance or augmentative.

The Costs Judge’s Decision

The Costs Judge recorded that the parties had been in negotiations around the time the notice of hearing had been sent in May 2024, such that there was a real likelihood of settlement. He noted confusion about bundles and observed that the annotated schedule went beyond the general points raised in the points of dispute, or at least provided significantly greater detail.

The Costs Judge summarised the test approved in Ainsworth as being whether there was sufficient particularity in the points of dispute for the proceedings to proceed fairly. He gave two reasons not to strike out Point 23. First, the original points of dispute would have allowed a fairly broad-brush assessment in any event and would have allowed the claimant to have known the case being made against him and to have responded to it. Secondly, and perhaps more importantly, both parties knew that there should have been a further document. The defendant had taken no steps to provide it until very close to the hearing, but the claimant had also done nothing to chase it. Thus both parties were significantly at fault for having failed to comply with the overriding objective and to assist the court by getting their act together earlier.

The Costs Judge then turned to whether to permit reliance on the annotated schedule, a question he said he had not found easy. While unacceptably late, it was not an ambush: it had been mentioned at the start and both parties were at fault for not ensuring that it was available on a timely basis. There was merit in the argument that the types of points raised would be fairly obvious to a costs practitioner, and indeed many of the points had been anticipated by the claimant. However, the assessment had also been unusual in considering items on a line-by-line basis, which gave rise to concern as to the impact of the delay.

The Costs Judge considered that paragraph 13.10 of PD 47 gave him very wide powers. He took the view that an adjournment was inevitable. It would be unfair to require the claimant to proceed on the basis that he had to respond to the annotated schedule, and even without it the claimant would still be in difficulty, without at least a breakdown from the defendant of which items were referred to in the categories in the points of dispute. Given the inevitability of an adjournment, the Costs Judge concluded that, on balance, the court would be assisted by having the annotated schedule available. Thus, and very reluctantly, the defendant would be permitted to rely on it, and an adjournment would be ordered subject to costs sanctions which would be imposed at the end of the process.

The High Court’s Decision

The Judge sat with Costs Judge Leonard. There were five grounds of appeal, namely that the Costs Judge: (1) did not give proper effect to paragraph 8.2(b) of PD 47 and wrongly applied Ainsworth; (2) wrongly concluded that a broad brush assessment was possible without the annotated schedule; (3) failed to give proper effect to CPR 1.3 (the duty of parties to help the court to further the overriding objective), misapplying Barton v Wright Hassall LLP [2018] UKSC 12; (4) wrongly allowed reliance on the annotated schedule; and (5) failed to give proper effect to paragraph 13.10 of PD 47. The first three grounds related to the refusal to strike out Point 23 and the last two related to permission to rely on the annotated schedule.

The Judge reminded herself of the basis on which an exercise of discretion may be disturbed on appeal. On ground 1, she concluded that Point 23 did not comply with paragraph 8.2(b) of PD 47 or Ainsworth. It made general assertions and failed to identify specific items in dispute or why they were disputed. However, that was insufficient because the Costs Judge had not found that Point 23 was compliant, and the question whether to strike out was a discretionary one linked to the question of whether reliance on the annotated schedule should be allowed.

Ground 2 related to the Costs Judge’s comment that a fairly broad-brush assessment would have been possible without the annotated schedule. The Judge rejected the challenge to that point, noting that the Costs Judge had recognised that it was the parties’ right to descend into further detail. Rather, the Costs Judge was saying that there was enough in Point 23 to gain a broad understanding of the challenge. This was clear from the content of the reply, the preparation of Bundle 2 and the broadbrush approach ultimately taken at the final hearing on 8 November 2024. Ground 2 was therefore dismissed.

The Judge also dismissed ground 3, which challenged the Costs Judge’s criticism of the claimant for not chasing the annotated schedule, on the basis that the challenge related to an argument that had not been raised with the Costs Judge at the relevant time. Ground 4 was dismissed for the same reason.

As to ground 5, the authorities did not support the criticism made of the Costs Judge’s comment that his powers under paragraph 13.10 were very wide, such that this aspect of ground 5 failed.

The Judge then went on to consider what she described as the residual, overarching argument from grounds 1 and 5, to the effect that the Costs Judge’s approach was wrong and failed to give effect to paragraphs 8.2(b) and 13.10(2) of PD 47. She accepted the argument by the claimant that the adjournment was necessitated by the defendant’s conduct with regard to Point 23 and the late annotated schedule. If Point 23 had been struck out then the assessment would have concluded on 6 August 2024, without the need for an adjournment. Any issues with the bundles also related to Point 23. The defendant had been on notice since January 2024 that Point 23 was not compliant and had taken no steps to remedy that until two working days before the hearing. The reason given for not serving the schedule, namely a hope to achieve settlement, was circular because a detailed understanding would facilitate settlement. The costs and delay caused by a third day were not consistent with the overriding objective, and the unfairness to the defendant resulting from striking out was of his own making. The Judge stated that she was very conscious of the limited role of an appellant court considering an appeal against a discretionary case management decision, but nonetheless concluded that the decision not to strike out Point 23 and to allow reliance on the annotated schedule was wrong. The Costs Judge had erred in principle by failing to give sufficient weight to the requirements of paragraph 8.2(b) and Ainsworth, and failing to ensure that the power in paragraph 13.10(2) was exercised in accordance with the overriding objective.

The Court of Appeal’s Decision

Lady Justice Falk, with whom Lord Justice Jeremy Baker and Lord Justice Foxton agreed, allowed the appeal and restored the Costs Judge’s decision.

The Court of Appeal emphasised that this was a second appeal against a case management decision. It is well-established that appellate courts should not interfere with such decisions simply because they disagree with them or otherwise consider that they would have taken a different course. Rather, as Lewison LJ reiterated in Broughton v Kop Football (Cayman) Ltd [2012] EWCA Civ 1743, case management decisions are discretionary decisions that often involve an attempt to find the least worst solution where parties have diametrically opposed interests. The discretion involved is entrusted to the first instance judge. An appellate court does not exercise the discretion for itself. It can interfere with the exercise of the discretion by a first instance judge where he has misdirected himself in law, has failed to take relevant factors into account, has taken into account irrelevant factors or has come to a decision that is plainly wrong in the sense of being outside the generous ambit where reasonable decision makers may disagree. The essential question is whether the decision could properly have been made.

The Judge had carefully directed herself as to these principles and reminded herself of them again later in her judgment. However, the Court of Appeal concluded that her decision nonetheless strayed beyond the limits set by them. Despite the efforts of counsel for the claimant to persuade the court otherwise, the Costs Judge’s decision disclosed no error of principle or failure to take relevant matters into account, and did not otherwise fall outside the ambit of his discretion. It should therefore not have been set aside.

Preliminary Observations

The Court of Appeal made a number of preliminary observations. First, one of the reasons why appellate courts must exercise caution when reviewing case management decisions is that it is impossible to recreate the situation before the judge. On an appeal against a case management decision an appellate court is simply not in the same position as the judge. It will not have the same perspective of the circumstances as they appeared to the judge on the ground at the time, it risks being influenced by hindsight, and it also risks being influenced by arguments that were simply not made or at least were not developed before the judge, and which have benefited from a lengthy period of gestation.

Secondly, case management decisions are frequently made under significant pressure. This case provided an excellent example. The Costs Judge had little option but to make an immediate decision at the end of the second day, with an unreserved judgment, because he had to decide whether to complete the assessment on that day or to adjourn.

Thirdly, an ex tempore judgment is just that, unreserved and lacking in the preparation that would go into a reserved judgment. It should be read as a whole, with those points and the circumstances in which it was delivered in mind, rather than picked apart in minute detail.

Fourthly, the points that had arisen in this case included an alleged lack of reasoning on the part of the Costs Judge, as well as some confusion caused by what appeared to have been a mis-recollection on his part at the adjourned hearing as to precisely what his reasoning had been at the earlier hearing. The Court of Appeal reminded the parties of what Munby LJ said in In re A (Children) [2011] EWCA Civ 1205: it is the responsibility of the advocate, whether or not invited to do so by the judge, to raise with the judge and draw to his attention any material omission in the judgment, any genuine query or ambiguity which arises on the judgment, and any perceived lack of reasons or other perceived deficiency in the judge’s reasoning process. In this case the claimant’s failure to do so was all the more marked by the fact that, by the date of the adjourned hearing on 8 November, his legal team had obtained a transcript of the judgment under appeal, but had neither shared it with the defendant nor provided a final version to the Costs Judge. Further, no permission to appeal against the decision on 6 August was sought at any stage from the Costs Judge, which might also have provided an opportunity for clarification, and (relying on CPR 47.14(7)) no appeal was filed in the High Court until after the November hearing.

Finally, the Court of Appeal observed that it does no credit to the justice system for there to be appeals on case management issues which do not, on analysis, raise material points of principle and the cost implications of which must risk outweighing the sums at stake. This reinforces the importance of parties seeking clarification, and where appropriate, reconsideration by the first instance judge. An appeal should be a last resort. This is quite apart from the fact that the very narrow gap between the final Part 36 offers should have given serious pause for thought before embarking on the hearing in the first place.

The Arguments on Appeal

Turning to the arguments on appeal, the focus had to be on the judgment of the Costs Judge, because the question was whether he was entitled to make the decision that he did.

Counsel for the claimant submitted that the Costs Judge had erred in principle by treating the decision-making process as a singular exercise of discretion. What he should have done was, first, decide whether the original points of dispute were Ainsworth compliant, such that they met the requirements of paragraph 8.2 of PD 47. That was a binary question, as demonstrated by O’Sullivan v Holmes and Hills LLP [2023] EWHC 508 (KB). The correct answer to that was that they were not compliant, such that the annotated schedule, which was served very late, was curative rather than augmentative. Secondly, if they were not compliant, the Costs Judge had to decide what to do, both in relation to the points of dispute and the annotated schedule. That second stage was a discretionary decision but, importantly, the fact that the points of dispute had been found to be non-compliant informed how the discretion should be exercised, as did the reasons for the breach, the length of time that had elapsed before an attempt was made to cure it and the proximity of that attempt to the hearing.

The Court of Appeal did not accept that the Costs Judge erred in principle. Although counsel for the claimant sought to argue that he did not conclude that Point 23 was non-compliant, it was sufficiently clear that he proceeded on that basis, as indeed the Judge had also concluded. Most obviously, no question of strike-out would have arisen if Point 23 was compliant. Point 23 was obviously incomplete because it referred to a non-existent annotated schedule. The Costs Judge agreed that Ainsworth applied despite it being a solicitor and client case, and while he observed that the original points of dispute would have allowed for a fairly broad-brush assessment, he made it clear elsewhere in his judgment that it was up to the parties whether they wished to proceed on a more detailed basis (as, the Court of Appeal added, the cross-reference to a schedule indicated that the defendant wished to do). The Costs Judge proceeded to give reasons why he should not strike out Point 23, clearly implying that he considered that he had power to do so.

Further, it was unrealistic to suggest that the Costs Judge did not have the non-compliance in mind, together with the other factors relied on by counsel for the claimant, in making his decisions in respect of Point 23 and the annotated schedule. He referred to the schedule being served at an extremely late stage, leading to not a happy state of affairs, the claimant having already prepared and put together bundles on a different basis. During the course of argument, the Costs Judge asked for an explanation for the delay, and was provided with one by counsel for the defendant, namely that the parties were in discussion and it was hoped that a hearing could be avoided.

The Costs Judge must be taken to have had that explanation in mind when he made his decision very shortly afterwards. Its absence from the judgment was a point that should most appropriately have been raised with the judge at the time. Further, although counsel for the claimant criticised that explanation by arguing that the negotiations referred to were negotiations at a later stage, once the hearing date was fixed, that was far from obvious from what was available to the court. Rather, the available chronology was consistent with a more continual process of discussion, as one would expect. And an attempt to rely on an indication in the first appeal hearing that the schedule may also have been overlooked by the defendant’s solicitor suffered from the defect that there was no indication that that point was made to the Costs Judge. In any event, that would not exonerate the claimant from blame for failure to chase it.

The Judge had suggested that the explanation given to the Costs Judge was circular, because settlement would have been much more likely if the annotated schedule was available, such that the claimant understood the case against him in detail. The Court of Appeal was not convinced by that. If it was likely to make a real difference to the discussions, it would surely have been chased for or supplied much earlier. The Costs Judge’s observations about both parties being at fault and the nature of the points raised were relevant in this context.

The Court of Appeal clarified that what it had said about the explanation for the delay should not be read as endorsing it as an acceptable excuse for non-compliance. It was not a good excuse, but it was a relevant part of the circumstances that the explanation was not of an egregious nature. There was no indication of, for example, a tactical move designed to wrongfoot the claimant, which would be a strong factor against allowing relief.

Counsel for the claimant further submitted that the Costs Judge had failed to have regard to the overriding objective, including the changes made to it in 2013 when proportionality of expense and the importance of compliance with rules were prioritised. She relied on two cases relating to late amendments to statements of case under Part 17, Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm) and CIP Properties (AIPT) Ltd v Galliford Try [2015] EWHC 1345 (TCC). These paragraphs recognise the significance of the new, much stricter, approach, such that it is now more readily recognised that costs sanctions for late amendments may not be adequate, and indulgence of failures to comply with procedural obligations can no longer be expected.

Counsel for the claimant submitted that the same principles should be applied to Part 47. Compliance with paragraph 8.2 of PD 47 was of manifest importance. The points of dispute inform the receiving party of the challenges being made and allow a reply to them. This enables the parties and the court to understand the full scope of the dispute, affecting both listing and preparation for the hearing, as well as the parties’ ability properly to make and assess offers.

The Court of Appeal agreed with all of this, but it did not mean that the decision of the Costs Judge was one that he was not entitled to make. The Costs Judge must be taken both to have been aware and to have taken into account the now well-embedded change of culture that followed the 2013 reforms. It is both unrealistic and inappropriate to expect judges to spell out aspects of the overriding objective, in the form that has now been in place for some 13 years, when they make case management decisions, not least because that would lead to a wholly disproportionate exercise in box-ticking.

The gravamen of the claimant’s complaint was that the Costs Judge failed to identify that it was the defendant’s default that had the effect of the hearing going to a third day, which among other things undermined what was intended to be a streamlined process of detailed assessment. As the Judge had observed, that would have been unnecessary if Point 23 had been struck out. But that started from the wrong place. It was uncontroversial that Point 23 would have been compliant if it had been accompanied by the annotated schedule when the points of dispute were first served. It was also apparent that, in that case, a three day hearing would have been required: there was simply insufficient time to deal with all the other matters and a detailed dispute about work on documents in two days. Indeed, the transcript of the hearing on 8 November clearly showed that this was undisputed by counsel for the claimant. So the real question was not whether a third day was required because of the default (because it would have been needed without a default), but what other costs or difficulties arose from the default. Those would have included the fact that the claimant did not have the benefit of the annotated schedule when replying to the points of dispute or when preparing for the hearing (subject of course to the point that it did not chase for the schedule, as it could have done), as well as the inconvenience and some inevitable increase in costs in having a hearing split by an adjournment, rather than being completed over consecutive days.

Potentially, the claimant was also put to a disadvantage in making or assessing offers under Part 36. However, there was more than one answer to that. Most obviously, it would have been a very good reason to chase for the annotated schedule. Alternatively, the claimant could have sought to protect its position in other ways, including through the terms of any Part 36 offer that it made thereafter.

The claimant was not assisted in relation to paragraph 13.10 by the decision in Celtic Bioenergy Ltd v Knowles Ltd [2022] EWHC 1223 (QB). In that case the lower court had refused an application made around a month before the hearing to rely on a supplemental point of dispute in relation to whether the claimant’s conditional fee agreement complied with the indemnity principle. In the course of her judgment dismissing the defendant’s appeal against the decision of Master Campbell, Foster J rejected the proposition that there was any presumption that documents will be accepted however late they are and however many new points they raise, observing that the rules confer a wide discretion to make a decision in accordance with the overriding objective and it cannot be gainsaid that there will come a time when a document will be just too late. The Court of Appeal agreed, but nothing here indicated a restriction on the scope of the discretion, rather the reverse. The point being made was that the Master was entitled to decide as he had, not that he was obliged to do so.

While it would clearly have been open to the Costs Judge to strike out Point 23 and not permit reliance on the annotated schedule, and another judge might have taken that course, he was not obliged to do so. It was open to him to impose a costs sanction instead, as he made clear that he would. As it turned out, the costs sanction actually imposed at the 8 November hearing was very limited, but there was no appeal against that decision.

The Judge’s criticisms of the Costs Judge’s decision proceeded on the basis that the adjournment was necessitated by the late schedule. The Court of Appeal had already addressed that. Beyond that, the primary objections were that insufficient weight was attributed to the importance of compliance with paragraph 8.2(b) and Ainsworth, and that the Costs Judge failed to exercise the power in paragraph 13.10(2) in accordance with the overriding objective. However, questions of weight are pre-eminently ones for the first instance judge, and for the reasons already given the Court of Appeal was not persuaded that the Costs Judge failed to have proper regard to the overriding objective.

Concluding Remarks

The Court of Appeal allowed the appeal and restored the decision of the Costs Judge. It emphasised, however, that this was on the basis that this was a decision that the Costs Judge was entitled to make within the generous ambit of his discretion. It was neither the only decision he could make, nor was it one with which other judges would necessarily agree.

Paying parties should be under no illusion that paragraph 8.2 of PD 47 requires an Ainsworth compliant approach. They should not assume that a lenient approach will be taken if they take a similar approach to the defendant in this case. Those who do not comply on a timely basis risk non-compliant elements of their points of dispute being struck out or, as a minimum, cost sanctions. Similarly, late variations by either party under paragraph 13.10 of PD 47 risk being disallowed or permitted only on conditions, including as to costs.

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Duty To Investigate BTE Insurance | Adequacy Of Enquiries And Recoverability Of Success Fees As Between Solicitor And Client

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The Senior Courts Costs Office’s decision in Evans v Fletchers Solicitors Limited [2026] EWHC 1523 (SCCO) concerned a solicitor and own client assessment under section 70 of the Solicitors Act 1974, in which the central issue was whether the defendant’s approach to investigating the availability of before the event legal expenses insurance had been adequate, and what consequences flowed from any failure in that regard for the recoverability of a success fee of £30,365.13.

Background

The claimant, Mr Peter Evans, had instructed the defendant, Fletchers Solicitors Limited, in connection with a personal injury claim arising from a road traffic accident in 2017. The claim was successfully resolved, with a compromise of £250,000 recorded in an order dated 14 July 2021. The costs as between the claimant’s solicitors and the opposing party were agreed separately, and the defendant then rendered a bill to the claimant in the sum of £61,615.13. That figure included a success fee of £30,365.13, which had been capped at 25% of the relevant damages in accordance with the Jackson Cap.

Mr Evans subsequently sought advice from JG Solicitors regarding the fees he had been charged. Those enquiries led to the issue of proceedings in the Senior Courts Costs Office, with Mr Evans seeking an assessment of the defendant’s bill. The proceedings raised challenges both to individual items in the bill and to the agreement of costs between the parties. However, the central issue before Senior Costs Judge Rowley was whether the case ought to have been funded by legal expenses insurance rather than a conditional fee agreement. The claimant’s position was that, had proper enquiries been made, he would have been able to use before the event legal expenses insurance held under his home insurance policy with Zurich Insurance Company, and that he would therefore not have been charged a success fee or an after the event insurance premium.

The claimant had signed a CFA on 24 April 2017. As part of that process, a form regarding possible funding options was completed by the claimant’s wife, which confirmed that the claimant had the benefit of family legal expenses insurance as an add-on to his home insurance with Zurich. The legal expenses element of that cover was managed by DAS Legal Expenses Insurance Company Limited.

The defendant’s file contained no record of any enquiries having been made of either Zurich or DAS in 2017. The judge found, on the basis of the absence of any evidence from the defendant’s witnesses on this point, that no such enquiries were made in 2017.

The fee earner who took over the file in May 2019, Ms Charlotte Mackulin, made enquiries at that stage in anticipation of court proceedings. Ms Mackulin asked her assistant to write to several entities identified on the LEI checklist completed in 2017. The response received from Zurich in June 2019 directed the defendant to a policy booklet, which was not in fact received, and provided a telephone number in bold print for further assistance. Ms Mackulin’s assistant sent a follow-up letter on 23 July 2019, the same day Zurich’s response was received, but no telephone contact was made despite the telephone number being prominently displayed in Zurich’s letter. Crucially, no direct contact was ever made with DAS, the actual legal expenses insurer. Ms Mackulin concluded that BTE cover had not been established after reasonable enquiry and wrote to the claimant accordingly. ATE insurance was then incepted.

Following settlement, JG Solicitors made enquiries of both Zurich and DAS. They obtained a copy of a renewal pack confirming that the claimant had held family legal expenses cover managed by DAS at the time of the accident. DAS confirmed by email in February 2022 that it had no record of having been contacted by the defendant at any point, either in 2017 or 2019. The defendant’s Head of Costs, Mr Gary Ratcliffe, then made his own enquiries, including consulting the DAS website via the Wayback Machine. He identified an FAQ entry stating that family legal expenses insurance would not cover motor-related matters. However, DAS declined to provide a definitive answer as to whether cover would have been available, maintaining that a full claim assessment would be required and that such claims needed to be made much closer to the date of the incident.

The defendant declined to refund the success fee and ATE premium on the basis that neither Zurich nor DAS had confirmed that coverage would have been available. The matter proceeded to a hearing on 1 July 2025, with judgment handed down on 19 June 2026.

The Post-2013 Funding Landscape

Challenges by unsuccessful defendant paying parties as to the claimant’s methods of funding had begun in earnest almost as soon as CFAs became prevalent following the introduction of the Access to Justice Act 1999 and the CFA Regulations 2000. These provisions made success fees and ATE premiums recoverable from an opponent and the use of them was therefore a more expensive option from the paying party’s point of view. The requirements of the CFA Regulations overlapped with regulatory requirements for solicitors to consider with their clients the options for funding their case. A failure to comply with the regulations resulted in the CFA being unenforceable by the solicitor against their client and consequently no indemnity against such costs needed to be provided by the opponent. Much of the difficulty with compliance was removed by the revocation of the CFA Regulations in 2005, but the need to advise the client of possible funding options remained as a matter of professional conduct. Arguments by paying parties in between the parties assessments are generally available to clients of solicitors in Solicitors Act assessments.

The proceedings arose in the context of the funding landscape following the reforms introduced by the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which removed the recoverability of success fees and ATE premiums from opposing parties in most personal injury cases with effect from April 2013. Since that change, the use of BTE insurance has generally been regarded as preferable for claimants, as it is not expected to require a success fee or ATE premium. The success fee charged in this case, at £30,365.13, represented a very substantial proportion of the total bill, making the funding question of considerable financial significance to the claimant.

The Five-Step Framework

Senior Costs Judge Rowley structured the analysis around five sequential questions. First, whether the defendant’s approach to enquiries into alternative funding had been unreasonable. Second, whether, if reasonable enquiries had been made, there would in fact have been LEI available for the claimant to use. Third, whether using the LEI would have meant that no deduction from the claimant’s damages would have been required. Fourth, whether the claimant would actually have used the BTE insurance had it been available. Fifth, what the consequences of the court’s findings on those questions should be for the costs payable by the claimant to the defendant.

The Parties’ Positions

The claimant’s position was that the defendant had failed to make any enquiries of the actual LEI provider, DAS, either in 2017 or in 2019. The enquiries that were made in 2019 were directed to Zurich, the home insurer, rather than to DAS, which was the entity responsible for managing legal expenses claims. The claimant argued that, on the balance of probabilities, BTE cover had been available and that, had he been properly advised, he would have used it. In support of that contention, Mr Evans gave evidence that, had he been made aware that using the LEI would have resulted in no deduction from his damages, he would unquestionably have taken that course.

On the question of consequences, the claimant argued that all of the defendant’s base costs, as well as the success fee and ATE premium, should be disallowed. Two strands of argument were advanced in support of that position. The first relied on the approach in McDaniel & Co (a firm) v Clarke [2014] EWHC 3826 (QB), in which all base costs had been assessed at nil following a failure to advise on union funding. The second was that the claimant should receive the benefit of the £50,000 limit of indemnity under the LEI policy, to be set against the bill he now faced.

The defendant’s position was that the enquiries made in 2019 had been reasonable in the circumstances and that, in any event, the BTE policy would not have covered the claimant’s personal injury claim arising from a road traffic accident. Mr Ratcliffe’s evidence pointed to his experience that family legal expenses insurance attached to home policies did not generally cover motor-related claims, and to the DAS FAQ entry to similar effect. The defendant also argued that, even if cover had been available in principle, the £50,000 limit of indemnity would have been insufficient for a claim of this value and complexity, and that the solicitors would not have recommended the policy given its terms.

On the question of causation, Mr Meehan relied on the Supreme Court’s decision in Perry v Raleys Solicitors [2019] UKSC 5, arguing that the claimant was required to prove that, had he received reasonable advice, he would have acted upon it so as to achieve a more beneficial outcome. Mr Meehan submitted that the various uncertainties as to coverage meant that the claimant could not discharge that burden, and that at most the court should apply a loss of chance approach to reduce any award accordingly.

Were the Enquiries Unreasonable?

The judge began by reviewing the authorities on the proper practice for a solicitor enquiring about BTE cover. In Sarwar v Alam [2001] EWCA Civ 1401, the Court of Appeal had considered the position in the context of a very modest injury claim and held that a solicitor was not obliged to embark on a treasure hunt to seek the insurance policies of every member of the client’s family. Nevertheless, even in that modest situation, proper modern practice dictated that a solicitor should normally invite a client to bring to the first interview any relevant motor insurance policy, household insurance policy, or any stand-alone BTE insurance policy belonging to the client and any spouse or partner living in the same household. That practice would enable the solicitor to read through the policy and consider the suitability of the insurance.

Subsequently, in Garrett v Halton Borough Council [2006] EWCA Civ 1017, the Court of Appeal gave guidance that solicitors should generally make enquiries of potential BTE insurers, even where the client was unclear as to whether any such cover was available. This led to the point where a failure to ask suitable questions, even in circumstances where it was later established that there was no LEI available, was found to be inadequate in seeking to establish the availability of any alternative funding.

Against that background, the judge found that the enquiries in this case were lacking in numerous respects. The most obvious deficiency was to fail to make any enquiries at all for more than two years after the accident. Thereafter, the letter from Zurich in response to the enquiry was, in the judge’s view, completely miscategorised as one which simply refused to indicate whether cover was available and which justified a repeat letter being sent. A telephone number in bold print in Zurich’s letter was put forward if any further assistance was required and yet there was no evidence to suggest that any phone call was made to Zurich about the apparent absence of the booklet or to discuss the likely coverage of the LEI in question.

Specialist personal injury solicitors, such as the defendant, are aware, or ought to be, that the company dealing with the LEI is not the same as the company dealing with the home contents insurance, since this was made perfectly plain in Sarwar. The Insurance Companies (Legal Expenses Insurance) Regulations 1990 require the management of claims under legal expense insurer contracts to be carried out by an undertaking having a separate legal personality from the insurer providing the main insurance policy.

Consequently, making desultory enquiries of Zurich, and without getting to the LEI company at all, could not be said to be making any form of reasonable enquiry. The fact that the enquiry was being made two years after the accident could hardly be said to have helped matters. If anything, a more concerted effort to establish the position was required given the delay in doing so. In fact, the correspondence was, in the judge’s view, drafted in a way which sought to encourage a lacklustre response from any potential LEI insurer so that the existing CFA arrangement was not disturbed by any putative BTE cover. The letters sent by Ms Mackulin’s assistant contained numerous bullet points requesting confirmation on various technical points and attached a schedule of charges, together with a statement that if no response was received within 14 days, ATE insurance would be advised. This structure, combined with the failure to telephone despite a prominent number being provided in Zurich’s response, supported the judge’s finding as to the character of the enquiry.

It was noteworthy that when JG Solicitors made enquiries some years later, they appeared to have had little difficulty in establishing the LEI insurer as distinct from Zurich itself.

Was There LEI Available?

The judge acknowledged that there could be no absolute answer to this question, but concluded that, on the balance of probabilities, there was such insurance available. The plain words of the Zurich home solutions policy provided that personal injury claims were covered by the LEI option.

Mr Ratcliffe’s evidence sought to undermine those plain words by giving evidence of his experience of coverage. It may be the case that not all home policies allow for accidents arising out of road traffic accidents to be covered, but the judge considered that Mr Ratcliffe’s evidence of what would have been the case was inevitably, at this distance from the material events, of only modest weight. If the correspondence to Zurich was anything to go by, the seemingly stock letter enquiring about the possibility of BTE cover was designed to produce a negative response. Whether that was actually by design or not, its impact would be to limit the number of occasions on which the defendant would have ever been instructed by a BTE insurer. Consequently, Mr Ratcliffe’s experience of his firm using such cover would inevitably have been more limited than might otherwise be the case.

It was no criticism of Mr Ratcliffe’s evidence that he was unable to obtain confirmation that the FAQ answer applied at the time of the claimant’s accident. But it left some room for doubt and that doubt was fortified by Mr Hazel’s comments. It would have been simple for him to say that family LEI cover could not be used in motor accidents if there was a blanket exclusion in this respect. But he did not make that statement despite being pressed by solicitors on both sides and maintained the more nuanced position that it would depend upon the policy wording in the individual case. That could only mean, as far as the judge was concerned, that some family legal expenses insurance did cover motor accidents, or at least that Mr Hazel suspected that it might have done.

In order to seek some more disinterested evidence, the judge consulted the preliminary report of Lord Justice Jackson regarding his Review of Civil Litigation Costs in May 2009. At paragraph 2.2 of Volume 1, Lord Justice Jackson described BTE as an optional extra on house and contents insurance policies, typically costing in the region of £15 to £20. He stated that the insured may be insured in respect of legal expenses for certain claims which he brings as claimant, including property disputes with the neighbour, claims regarding goods or services received, employment claims or even, depending upon the terms of the policy, personal injury and clinical negligence claims. In many of these cases the BTE insurers pay the claimant’s solicitors on a conventional hourly rate basis, recovering costs from the other side if they win and paying out adverse costs if they lose.

The terms of the Zurich home solutions policy covered personal injury cases in the manner described by Lord Justice Jackson. In any event, the judge preferred the plain words of the policy to Mr Ratcliffe’s evidence in this respect. Jackson LJ’s description of the market simply reinforced that preference.

A separate point made by Mr Meehan was that, even if LEI was available, the solicitors would not have recommended it, given the policy wording. The judge rejected that argument. The points made by Mr Meehan regarding the alleged constraints imposed by the LEI policy held little weight since they were, in the judge’s experience, no more than the sort of wording generally used in such policies. Furthermore, Mr Meehan’s submissions lacked any evidence on which to base the criticisms given that no evidence was given by either Ms Mackulin or Mr Ratcliffe that any such objection to the terms of the policy would have been raised in the event that enquiries had been made sufficiently to establish that it was available.

Would There Have Been No Deduction?

The judge observed that it had been something of an article of faith in the costs world that if a party was able to use BTE insurance, then they would not suffer any reduction in their damages by way of paying for irrecoverable success fees or ATE insurance premiums. Mr Meehan’s skeleton queried whether that was actually the case.

His first argument was that the claimant had failed to establish that the case would have been taken on without any deduction. The judge considered that there was no evidence on this point that helped either side. The fact that the defendant was claiming a success fee and ATE policy in the bill before the court was merely a reflection of the facts that actually occurred. If BTE insurance had been available which covered the claimant’s solicitors’ costs as well as the opponent’s, then there was no obvious need for either a success fee or an ATE policy.

It was not clear why the claimant was said to have the burden of proving a negative. The claimant’s case was simply that the defendant’s activities, or lack of them, had meant that the claimant could not avail himself of insurance he had purchased before the accident. On the face of it, using such insurance would mean a private paying agreement with the solicitor would be backed by an indemnity from the LEI insurer. That arrangement would not require either a success fee or an ATE premium. It seemed to the judge that the defendant ought to be demonstrating that, in such circumstances, they would use a CFA with a success fee and possibly some ATE insurance which the claimant would be required to meet. But there was no such evidence from the defendant any more than there was evidence from the claimant about the supposed inevitability of deductions.

The judge returned to the passage from paragraph 2.2 of the preliminary report of Lord Justice Jackson, which stated that in many of these cases the BTE insurers pay the claimant’s solicitors on a conventional hourly rate basis. A footnote to that passage, numbered 15 and attached to the phrase “on a conventional hourly rate basis”, expressly stated “Without a CFA”. This express description of retainers which do not involve a CFA and therefore do not contain a success fee demonstrated that there was no certainty of any deduction being claimed by a solicitor.

A subsidiary argument of Mr Meehan’s, which potentially had more weight, was that the level of indemnity of £50,000 for the LEI was insufficient and that therefore it could not have been utilised in the first place. Since the LEI is meant to cover both sides’ costs, its limit of indemnity is conceptually burned through at twice the rate, more or less, of an ATE policy which is only responsible for protecting against the opponent’s costs as well as the insured’s disbursements.

The claimant’s claim settled for £250,000 and was obviously a significant personal injury claim. To that extent, the defendant’s argument was well made in that the BTE cover would not have been sufficient to reach trial and that would have been apparent at the outset. There were, however, two difficulties with the defendant’s argument which meant that ultimately it did not prevail.

The first was that the ATE insurance actually taken out, and whose limit of indemnity was £100,000, was also insufficient to take the case to trial. A simple addition of the disbursements in the claimant’s approved budget of £20,280.40 (incurred) and £57,645 (estimated) together with the defendant’s claimed budgeted costs of £73,464, or even just the claimant’s offer in respect of that figure of £66,714, proved that the £100,000 limit of indemnity would have been insufficient to go to trial. That conclusion could have been drawn at the outset of the case if the appropriate approach would be simply to consider the amount of cover required to reach a trial.

Consequently, it was not an answer simply to look at the limit of indemnity of the LEI to decide whether it was an appropriate funding method. Most cases, in fact, settle much earlier, and therefore within the limit of indemnity.

The second difficulty was the existence of so-called top up ATE insurance which had been available for many years, whether or not the original insurance was BTE or ATE. On the basis that top up cover would have been required, whichever policy was originally used should the case have reached a trial, the lower level of indemnity was not a factor which militated against the use of BTE cover if its availability had been established.

Would the Claimant Have Used It?

The defendant argued that, even if there was BTE insurance which the claimant potentially could have used, this was not sufficient for the claimant to obtain a reduction in the defendant’s bill. As Mr Meehan’s skeleton argument put it, the claimant was required to prove that if he had received reasonable advice as to funding, he would have acted upon this, so as to achieve a more beneficial outcome. In other words, it was a basic requirement that the claimant prove loss.

Mr Meehan relied upon dicta approved by the Supreme Court in Perry v Raleys Solicitors [2019] UKSC 5 in support of this proposition. That case dealt with a claim in negligence against the defendant solicitors by the claimant and Mr Meehan particularly relied upon paragraphs 19 and 20 of that decision which fell under the heading “the law about causation in professional negligence cases.”

These paragraphs of the judgment discussed a regular problem of the claimant in establishing what he or she would have done but for the negligent act of their solicitor. It is a counterfactual situation in that the claimant has already had to prove successfully that their solicitor was negligent in order to consider what might have been. It is therefore likely that the situation will be uncertain in terms of proof. Consequently, rather than the court deciding a binary yes or no conclusion on the balance of probabilities, it is often the case that the claimant will receive some but not all of the damages that might flow from the negligence on the basis of a loss of chance.

The thrust of Mr Meehan’s various arguments about whether the policy actually covered the claimant’s personal injury claim, whether it would have been recommended given its terms, and whether, in fact, it would have avoided the claimant having any deduction from his damages were all aimed, to some extent, at reducing the extent of the loss of chance element.

By contrast, Mr Carlisle submitted that all the claimant needed to show was that, on the balance of probabilities, if the claimant had been properly advised he would have taken a different option, that is, he would have used the BTE insurance. In support of this, Mr Carlisle relied upon several paragraphs in the claimant’s witness statement, for example, paragraph 61, in which he said that if he had been made aware that instructing a solicitor associated with his legal expenses policy through Zurich would have resulted in no money, or less money, being deducted from his damages than instructing Fletchers, there was no doubt in his mind that he would have taken that course of action.

The judge acknowledged that it was inevitably the case that any such statement was likely to appear to be self-serving. After all, there was now no prospect of the claimant actually using the BTE policy and so he could safely say that he would have used it in any event. Nevertheless, the judge had no reason to doubt Mr Evans’ evidence and there was no evidence which could be put forward by the defendant to contradict his evidence.

This was not a professional negligence case and it seemed to the judge that the so-called Kitchen discount, from the case of Kitchen v RAF [1958] 1 WLR 563, regarding the use of a loss of chance to reflect the vagaries of a counterfactual situation in professional negligence cases simply did not apply. The attraction of using BTE policies had waxed and waned over the last 25 years depending upon other funding options. But since 2013, and the general elimination of the recoverability of success fees, the use of BTE as a method which would not be expected to require a success fee and ATE insurance to be taken out was something which weighed heavily in the balance. It did not seem to the judge that it took much to persuade the court that if that option were available, then the claimant was likely to avail himself of it. After all, he had paid a fee for that insurance and could be expected to use it unless he was unable to do so.

Consequently, the judge was satisfied on the balance of probabilities that the claimant would have used the BTE insurance policy, whether that was by requiring Fletchers to do so or by instructing another firm who would have been willing to do so.

What Are the Consequences?

Having decided on the balance of probabilities that there was BTE insurance available which the claimant would have used, the judge turned to the question of what effect that had on the costs payable by the claimant to the defendant.

The claimant contended that all of the defendant’s base costs as well as the success fee and the ATE premium should be disallowed. There were two strands to the claimant’s argument regarding the reduction in the base costs. The first was that the judge should follow the approach of Hickinbottom J, when upholding Senior Costs Judge Gordon-Saker’s disallowance of all base costs in the case of McDaniel & Co (a firm) v Clarke [2014] EWHC 3826 (QB). The second strand was that the claimant ought to receive some benefit from the £50,000 limit of indemnity in the LEI by having that sum deducted from the bill which he now faced.

In McDaniel, the solicitors accepted that they had not advised the claimant properly as to alternative methods of funding. In particular, Ms Clarke was a member of a trade union and there was evidence to confirm that the trade union would have backed her claim. On that basis, the judge decided that none of the costs claimed against Ms Clarke were reasonably incurred and so assessed the bill at nil.

The judge did not accept that there was any direct comparison between this case and McDaniel. If the claimant had been able to use the BTE insurance, then he would still have been liable for the solicitors’ base costs: the LEI simply providing an indemnity. That was a very different situation from where a trade union backs its member and the member has, in effect, no direct responsibility. The judge saw no scope for the argument that the base costs were not recoverable in principle by the solicitor based on McDaniel.

Nor did the judge think there was any weight to the second argument regarding the use of the LEI’s limit of indemnity. The claimant had been successful in his case and therefore would expect to recover costs from his opponent. All of the costs reasonably incurred would be recoverable. Only those costs which were unreasonable either in the manner in which they were incurred or in their amount would not be recoverable from the opponent. Such unreasonable costs would also not be recoverable under the LEI policy. There might arguably be a reasonably incurred disbursement which was not recoverable, but there was certainly nothing to suggest that the entire limit of indemnity ought to be set against the costs incurred by the claimant in the manner contended for by Mr Carlisle.

Nevertheless, based on the reasoning throughout the judgment, it was clearly the judge’s view that the success fee would not have been incurred if the BTE policy had been utilised. On that basis, the judge disallowed the success fee in its entirety. The same reasoning would apply to the ATE policy, though the judge noted that this item did not strictly fall for assessment within these proceedings and accordingly made no formal ruling on it.

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Application To Reinstate Two Appeals Struck Out At 4.01 pm Fails In The High Court As Their “Very Weak” Merits Weigh Against Relief At Denton Stage Three

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The High Court’s decision in Szwed v Aviva Insurance Ltd [2026] EWHC 1425 (KB) confirms that the merits of an appeal may be a material factor at the third stage of the Denton framework when the court can see without much investigation that the grounds are very weak, and that costs budget decisions attract a high threshold for appellate intervention.

Background

This matter arose from a personal injury claim brought in the Central London County Court by Mr Pawel Szwed against Aviva Insurance Limited. The underlying claim related to a road traffic accident on 30 January 2018, in which the Appellant was knocked from his bicycle after the Respondent’s insured opened a van door into his path. Liability was admitted, and allegations of contributory negligence were subsequently abandoned. The Appellant valued his claim at up to £100,000 in his original claim form, though his final schedule of loss dated 16 August 2024 sought a total of £960,504.75 for past and future losses. The Respondent’s counter-schedule contended that the Appellant was entitled to no more than £919.22 for past losses, with nothing for future losses. The parties instructed psychiatric, orthopaedic surgery, and ENT experts, with directions given in the usual way for the preparation of joint statements.

The procedural history of the claim was protracted. In November 2022, the Respondent served surveillance evidence on the Appellant, following which his solicitors came off the record. He has represented himself, with the assistance of a court interpreter, ever since. The first trial window in April to May 2023 was vacated because the Appellant was unable to comply with the court’s directions.

By the time the matter came before Recorder Glancy KC on 28 July 2023, only the joint statement of the psychiatry experts had been prepared. The orthopaedic and ENT joint statements remained outstanding. The Respondent had applied on 24 May 2023 for the claim to be struck out, or in the alternative for an unless order to secure the outstanding joint statements. The Recorder declined to strike out the claim but made an unless order at paragraph 2(a) of his order, to the effect that the claim would be struck out unless by 4.00 pm on 20 September 2023 the Appellant provided evidence that his orthopaedic and ENT experts were willing and able to engage in joint discussions and prepare joint statements. Directions were given to a new trial window from 1 March to 30 June 2024.

The Costs Budget Decisions

The Recorder also permitted the Respondent to vary its costs budget by adding £27,000 to the previously approved figure, against a sought increase of £31,611.11. The reasons for the increase related to the Appellant’s travel from Poland to attend medico-legal examinations, the obtaining and disclosure of surveillance evidence, and the costs of instructing interpreters to attend hearings.

The ENT joint statement was provided on 14 September 2023. However, by the time the matter came before HHJ Hellman on 22 December 2023, the orthopaedic joint statement remained outstanding. The Judge granted the Appellant relief from sanctions in relation to paragraph 2(a) of the Recorder’s order and directed that the orthopaedic joint statement be provided by 22 June 2024.

The Judge also considered three applications made by the Appellant, dated 1 September, 1 October, and 9 December 2023, which were in substance a single application seeking to have the Respondent’s costs budget reduced, or “cut entirely”, on the basis that the Respondent had been behaving oppressively by causing the Appellant to spend money disproportionately on costs. The Judge dismissed those applications, accepting the evidence of the Respondent’s solicitor, Jacob Wright, that the delay in the joint expert process had been caused by the Appellant’s own conduct rather than that of the Respondent. The Judge also noted that it was far from clear that any power existed to make the order sought in any event. The orthopaedic joint statement was ultimately provided on 21 July 2024, and the trial was listed to commence on 29 June 2026, being the fifth attempt to list the matter for trial.

The Appeals and Strike Out

The Appellant filed his Appellant’s Notice in appeal KA-2023-000166 on 21 August 2023, challenging the Recorder’s unless order and the decision to permit the Respondent to extend its costs budget. He filed his Appellant’s Notice in appeal KA-2024-000012 on 17 January 2024, challenging the Judge’s dismissal of his applications to reduce the Respondent’s costs budget. Both appeals were subject to significant procedural difficulties, including the absence of CPR-compliant appeal bundles, the absence of transcripts of the relevant judgments, and a failure to provide properly formulated grounds of appeal.

On 19 February 2025, Martin Spencer J directed the Appellant to file a witness statement addressing the continuing relevance of the appeals in light of the progress of the underlying proceedings. The statement provided on 13 March 2025 was considered by Sir Stephen Stewart on 26 March 2025, who concluded that it did not meet the requirements of Martin Spencer J’s order. Sir Stephen made an unless order requiring the Appellant to file a further witness statement by 4.00 pm on 17 April 2025 explaining clearly the continuing relevance of the appeals. The Appellant did not comply, and both appeals were automatically struck out at 4.01 pm on 17 April 2025.

The Appellant applied on 24 April 2025 for a retrospective extension of time to comply with Sir Stephen Stewart’s order in appeal KA-2023-000166, but made no such application in KA-2024-000012. On 23 March 2026, Ritchie J refused the application and confirmed that KA-2023-000166 remained struck out. By a further application dated 23 March 2026, the Appellant sought to set aside Ritchie J’s order, and also sought to set aside the automatic strike out of KA-2024-000012. The Respondent agreed that it was consistent with the overriding objective to treat that application as relating to the strike out of both appeals. The application came before Mrs Justice Hill, who delivered judgment on 11 June 2026.

Before the hearing, the Appellant applied on 20 March 2026 to vacate the trial listing to allow for the proper disposal of his two appeals. On 8 May 2026, HHJ Holmes dismissed that application, observing that the determination of the appeals did not prevent a fair trial taking place as currently listed.

The Legal Framework

Mrs Justice Hill noted that in accordance with R (Hysaj) v SSHD [2014] EWCA Civ 1633 at [38] and Lakatamia v Su [2019] EWCA Civ 1626 at [3], the guidance given by the Court of Appeal in Denton v TH White Ltd [2014] EWCA Civ 906 applies to applications for extensions of time. The Denton guidance requires a judge to address an application for relief from sanctions in three stages: first, to identify and assess the seriousness and significance of the failure to comply; second, to consider why the default occurred; and third, to evaluate all the circumstances of the case, so as to enable the court to deal justly with the application, including the matters set out in CPR 3.9.

The court also noted that in Hysaj at [46], the Court of Appeal held that in most cases the merits of an appeal will have little to do with whether it is appropriate to grant an extension of time: it is only in those cases where the court can “see without much investigation that the grounds of appeal are either very strong or very weak” that the merits will have a significant part to play when it comes to balancing the various factors that have to be considered at stage (3) of the Denton process.

The Appellant sought to rely on fresh evidence on appeal, said to provide further proof that he was not responsible for the breakdown of the joint expert process. However, the Appellant did not identify which documents were new, nor did he explain why those documents could not have been obtained with reasonable diligence for use before the Recorder or the Judge. This would have been necessary to meet the first criterion for the admission of such evidence on appeal set out in Ladd v Marshall [1954] 1 WLR 1489.

Application of the Denton Framework

At stage one, Mrs Justice Hill held that the Appellant’s failure to comply was significant and serious. The appeals had a protracted history, relating to two orders made in 2023, in the context of County Court proceedings that remained live, and where permission had not yet been granted. By the time of Sir Stephen Stewart’s order, the Appellant had already been afforded significant latitude, both in terms of the extensions of time he had been granted and the fact that there was (and still is) no CPR-compliant appeal bundle before the court on either appeal. Martin Spencer J had ordered the Appellant to provide a witness statement addressing the “potentially academic” issue, but he had failed to do so. The order made by Sir Stephen Stewart was therefore giving the Appellant a further opportunity to do something which he had already been directed to do. Against this background, the Appellant’s failure to comply was significant and serious as it had led to yet further delay in the appeals being progressed and yet further court resources being deployed on the appeals.

At stage two, the court considered why the default occurred. Although the Appellant contended that his mobile telephone was stolen on 28 March 2025, he provided no corroborating evidence of this, such as a police report. Even if the Appellant was without access to his mobile phone, he could have tried to access his email via another device. The Appellant asserted that he regained access to his email account on 14 April 2025, but again no proof of this was provided. If the Appellant had immediately checked his email on that date, he would have seen the order and would have still had time to comply as the deadline was not until 4.00 pm on 17 April 2025. The Appellant contended that even when he regained access to his email on 14 April 2025, he did not see the 31 March 2025 email from the court enclosing the Sir Stephen Stewart order because he needed the assistance of a friend who reads English, and that friend had not been available since 14 March 2025. No evidence from the friend was provided to support this assertion. The number of documents the Appellant had filed in these appeals, and the volume of material provided by the Appellant ahead of the hearing, suggested that he was able to deploy assistance in enabling him to fully participate in the litigation process. For these reasons the court did not find the reason the default occurred very persuasive.

At stage three, the court evaluated all the circumstances of the case, so as to deal justly with the application, including having regard to the matters set out in CPR 3.9, namely the need for litigation to be conducted efficiently and at proportionate cost, and the need to enforce compliance with rules, practice directions and orders. This evaluation encompassed the academic nature of the appeals, the merits of the appeals, and the broader conduct of the litigation.

The Academic Nature of the Appeals

The court agreed with the Respondent that the appeal against the Recorder’s 28 July 2023 unless order relating to the orthopaedic and ENT experts was entirely academic. The unless order had been completely overtaken by events in that on 22 December 2023 HHJ Hellman granted the Appellant relief from sanctions for the remaining element of non-compliance with it. The unless order was therefore superseded within the County Court proceedings on that date. The lack of ongoing relevance of the unless order was underscored by the fact that the joint expert process had now been completed, and by the fact that the trial could now fairly proceed. Indeed, in his 14 May 2025 statement addressing the “potentially academic” issue, the Appellant himself did not refer to the joint expert issues but rather the “financial result of the costs of the parties”, which the court took to relate to the costs budget issues alone.

There was also an element to which both the appeals relating to the costs budget were academic. This was because at present the Appellant had the benefit of Qualified One Way Costs Shifting, meaning that no cost orders made against him in the Respondent’s favour could be enforced without the permission of the court, and to the extent that there was in the future an argument about the Respondent’s costs, the Appellant may well be able to take some of these points then.

The Appellant was correct to highlight that the Recorder’s order and the Judge’s judgment included findings about his conduct with which he disagreed. However, it was plain that his credibility was much more widely in issue in the County Court claim, not least given the surveillance evidence. Insofar as there was any attempt to cross-examine the Appellant at trial on these issues, it would be open to him to contend that these findings were not properly made, but the Respondent’s counsel conceded in open court during the hearing that he had no intention of questioning the Appellant at trial about whether he had paid his experts or about why the joint expert process broke down.

The Merits of the Appeals

Mrs Justice Hill was satisfied that the merits of both KA-2023-000166 and KA-2024-000012 were in fact “very weak”, for the following reasons.

First, the Recorder’s decision to impose an unless order was based on his interpretation of the material placed before him as to why the joint expert process had broken down. The parties had different accounts for this and the Recorder opted to accept the Respondent’s position. Accordingly, this was very far from a material mistake of fact of the kind considered in E v SSHD [2004] EWCA Civ 49 at [66], where such mistakes need to be “established” in that they are “uncontentious and objectively verifiable”.

Second, the Recorder’s decision to permit the Respondent to extend its cost budget was a case management decision. It is well recognised that an appeal court should be slow to intervene with such a decision. As the White Book 2026 explains at paragraph 52.3.11, a party applying for permission to appeal to overturn a case management decision made within the judge’s discretion must cross a high threshold (Royal & Sun Alliance Insurance Plc v T & N Ltd [2002] EWCA Civ 1964 at [38]; Walbrook Trustees (Jersey) Ltd v Fattal [2008] EWCA Civ 427 at [33]). In Abdulle v Commissioner of Police of the Metropolis (Practice Note) [2015] EWCA Civ 1260, the Court of Appeal re-affirmed that it would not lightly interfere with case management decisions of lower courts. The reasons the Recorder agreed to extend the budget related to the Appellant’s travel from Poland to attend medico-legal examinations, the obtaining and disclosure of surveillance evidence, and the costs of instructing interpreters to attend hearings. While it was plain that the Appellant disagreed with those reasons, they were plainly reasonable. They were also unrelated to the alleged mistake of fact relating to the joint expert process.

Third, the Judge’s dismissal of the Appellant’s applications to have the Respondent’s cost budget reduced, ideally to nil, on grounds of its “oppressive” conduct, was again a case management decision. It was a highly unusual application. As the Judge identified it was far from clear that there was a power to make such an order. In any event the Judge was entitled to accept Mr Wright’s evidence, not that relied on by the Appellant, which sought to explain the delays in the joint expert process, so as to refuse the application.

Fourth, PD52A, paragraph 4.6 makes special provision for applications for permission to appeal from case management decisions. When considering such an application, the court may take into account whether “(a) the issue is of sufficient significance to justify the costs of an appeal” and whether “it would be more convenient to determine the issue at or after trial”. For the reasons given above, both of those questions would be answered in the negative in respect of both these applications for permission to appeal, which would provide a further basis for refusing permission.

Fifth, the factors relied on by the Appellant in support of his argument that the CPR 52.6(b) test applies, were generic factors that apply in very many cases: there was nothing particularly “compelling” about them.

Conclusion

Mrs Justice Hill held that there had already been very substantial delay in the underlying County Court claim and in both appeals, which had not therefore been conducted efficiently and at proportionate cost. It was also material that the Sir Stephen Stewart order was not the only occasion in the County Court or in this court when the Appellant had not complied with rules, practice directions and orders and there was a need to enforce such compliance.

For all these reasons, having applied the Denton criteria, the court dismissed the Appellant’s application. Both appeals therefore remained struck out.

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Court Deprecates Paying Party’s Opportunistic Conduct In Detailed Assessment Proceedings

The Court Retains Jurisdiction To Hear Part 23 Applications In Provisional Assessment Proceedings, But Will Ordinarily Decline To Exercise It

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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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Success Fee Reduced From 100% (£2,500) To 11% (£330) And ATE Premium Disallowed In Child Personal Injury Claim

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The County Court sitting at Oxford’s decision in Spicer v Greene King Brewing and Retailing Limited [2026] EWCC 18 concerned the deduction of CFA success fees and ATE insurance premiums from a child claimant’s damages in a “straightforward” personal injury claim where liability was never in dispute.

Background

This judgment by District Judge Lumb in the County Court sitting at Oxford carries the neutral citation [2026] EWCC 18, though the internal hand-down notice records the date as 17 April 2024. The judgment arose from a personal injury claim brought on behalf of Bradley Spicer, a child, by his mother and litigation friend, Jessica Lewington, against Greene King Brewing and Retailing Limited.

On 4 August 2022, Bradley, then aged four, was visiting The Rowing Machine public house in Witney, Oxfordshire — a pub owned by the defendant — with his family. While playing in the pub garden with his elder sister, he tripped on uneven paving slabs and suffered a laceration to his forehead. He was taken to Witney Community Hospital, where the wound was closed with steristrips and he was discharged. The wound healed fully within two months, leaving a faint scar below the hairline visible only on close inspection.

Liability was never in dispute. The pub manager admitted liability at the scene and offered Ms Lewington vouchers as compensation. Ms Lewington considered the vouchers insufficient and contacted Greene King directly, whose claims handling agents, Gallagher Bassett, advised her that as Bradley was a child, any damages would require court approval, and asked her to instruct solicitors to obtain a medical report. Following a recommendation from a local solicitor, Ms Lewington instructed Express Solicitors, based in Manchester, in June 2023.

Express Solicitors advised Ms Lewington to enter into a Conditional Fee Agreement and to take out an After the Event insurance policy. A medical report was obtained through On Time Reports Limited — described in the judgment as a wholly owned subsidiary medical reporting agency of Express Solicitors — with Mr Asif Malik FRCEM, Consultant in Emergency Medicine, producing a report dated 11 March 2024. The Stage 2 settlement pack was provided to the defendant on 19 March 2024 with an offer to settle of £10,031.66. The defendant responded with an all-inclusive counter-offer of £10,000, which was formally accepted approximately two weeks later. Part 8 proceedings were issued and the matter was listed for an infant approval hearing.

At the infant approval hearing on 15 August 2024, District Judge Lumb had no difficulty approving the proposed settlement of £10,000. The between-the-parties fixed costs, including disbursements, had been agreed prior to the hearing. The remaining issue was the proposed deduction from Bradley’s damages of a success fee under the CFA and an ATE insurance premium.

A schedule of solicitor and own client costs was produced claiming £13,316 in profit costs, based on 73.1 hours of recorded time across 18 different fee earners. The CFA and risk assessment assessed the success fee percentage at the maximum 100%. As 100% of £13,316 would exceed 25% of the damages (25% of £10,000 being £2,500), a success fee of £2,500 was sought, together with an ATE premium including Insurance Premium Tax of £1,120, producing total proposed deductions of £3,620 — equivalent to 36.2% of the recovered damages.

District Judge Lumb was sceptical that £13,316 in profit costs could have been reasonably incurred or reasonable in amount on even an indemnity basis, and considered the 100% success fee percentage to be obviously too high. In exercise of the court’s duty to safeguard the interests of the child, the solicitors were directed to file the complete file of papers for inspection and assessment. Following receipt of the file, a paper hearing was conducted to consider the solicitor and own client costs and the ATE premium.

Costs Issues Before the Court

The judgment addressed two discrete costs issues arising in the context of the court’s approval of a settlement on behalf of a child claimant under CPR Part 21: first, the appropriate level of the success fee deductible from the child’s damages under the CFA; and second, whether the ATE insurance premium was a reasonably incurred expense that could properly be deducted from those damages.

The broader context, as District Judge Lumb noted at the outset, was a pattern of apparent error — both by practitioners and the judiciary — in the application of the correct tests when assessing additional liabilities in children’s personal injury claims. The judgment set out the correct analytical framework in some detail. In relation to ATE premiums, the question is whether taking out the policy was a reasonably incurred expense; absent actuarial or underwriting evidence as to the appropriate level of premium, the premium should either be allowed in full or disallowed. In relation to success fees, the correct approach requires the court first to assess the reasonable base profit costs (the multiplicand), then to apply the appropriate success fee percentage assessed by reference to the risk of losing the case (not as a percentage of damages), and finally to compare the resulting figure against 25% of the general damages for pain, suffering and loss of amenity and any past special damages — capping the deduction at that figure if the calculated success fee exceeds it.

District Judge Lumb, who has maintained a keen interest in this area since his own judgments in A & M v Royal Mail [2015] EW Misc B24 and B30, also identified two recurring errors in practice: first, an assumption by some practitioners that the success fee will always amount to 25% of the damages — an approach that risks constituting an unlawful contingency fee arrangement; and second, a failure to produce solicitor and own client base costs, which prevents the court from performing the first stage of the calculation at all.

In the present case, the specific issues were: (i) whether the claimed profit costs of £13,316 across 73.1 hours and 18 fee earners were reasonably incurred and reasonable in amount; (ii) what the appropriate success fee percentage was, given the nature and risk profile of the claim; and (iii) whether the ATE premium of 10% of recovered damages plus IPT (totalling £1,120) was a reasonably incurred expense in the circumstances of the claim.

An additional issue arose in relation to informed consent. District Judge Lumb found that Ms Lewington, as litigation friend, did not really understand what was in the witness statement or its meaning and effect, and had been conditioned to expect a deduction of 25% of damages as the norm. This finding engaged the principles in Herbert v HH Law Ltd [2019] EWCA Civ 527 and informed the court’s approach to the assessment.

The Claimant Solicitors’ Position

Express Solicitors, acting for the claimant, sought deductions from Bradley’s damages totalling £3,620, comprising a success fee of £2,500 (representing 25% of the £10,000 settlement) and an ATE premium including IPT of £1,120.

In support of the proposed deductions, the solicitors relied upon a witness statement from Eleanor Brickell, the trainee solicitor with conduct of the claim, which District Judge Lumb characterised not as a genuine witness statement but as a note of the relevant provisions of the CPR — particularly CPR 21.12 and 46.9 — and the authorities of Callery v Gray [2001] EWCA Civ 1117, West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220, Herbert v HH Law Ltd [2019] EWCA Civ 527, and the persuasive judgment of HHJ Lethem in Wheeler v H&M Hennes & Ors. Written submissions were also provided by Poppy Lawrie, described as a solicitor’s clerk, which largely repeated the earlier note and additionally referred to the decision of HHJ Monty KC in Duffield v WM Morrison Supermarkets Ltd [2025] EWCC 35 (the judgment cites this as “EXCC 35”, which appears to be an error).

The solicitors’ position on the success fee rested on the claimed profit costs of £13,316 and a risk assessment that assessed the appropriate success fee percentage at the maximum 100%. The effect of this approach — combining high claimed base costs with the maximum success fee percentage — was that the 25% cap on deductions from damages would inevitably be reached regardless of what percentage the court might assess as reasonable. District Judge Lumb noted that this practice drew suspicion that it was deliberately designed to ensure the cap was always reached, with clients conditioned to expect a 25% deduction and therefore unaware that the solicitors may have been acting in their own interests contrary to those of the client, in potential breach of the Principles of the Solicitors Code of Conduct.

The Court’s Assessment

Having found that the litigation friend did not really understand the witness statement or its meaning and effect and had been conditioned to expect a 25% deduction, District Judge Lumb applied Herbert and carried out a summary assessment on the indemnity basis of the reasonably incurred and reasonable in amount solicitor and own client costs.

The contractual hourly rates under the CFA were significantly higher than the guideline hourly rates issued by the SCCO. Although Express Solicitors mentioned in the retainer documentation that their hourly charges were higher than other firms may charge, seeking to justify this by their expertise, the repeated reference to the limitation of the client’s liability for costs to 25% of the damages was clearly designed to downplay any importance of the hourly rates from the client’s perspective, as the result would always be the same: an expected deduction of 25% of the damages and deduction of the ATE premium.

On the facts of this straightforward case where liability was admitted at the start and at the time of instruction the solicitors knew that all that had to be done was to obtain and serve a medical report and negotiate settlement, none of the factors in CPR Part 44.4(3) justified an hourly rate beyond the guideline rate for the fee earner with conduct with minimal supervision. The case could and should have been run by a grade D fee earner with supervision from a grade B fee earner — the grades of fee earner who were in fact engaged to conduct the case. The reasonably incurred time would have been 15 hours at grade D and 2 hours at grade B, being relatively generous bearing in mind that the assessment was on the indemnity basis where the benefit of any doubt is in favour of the receiving party. The CFA stated hourly rates of £345 per hour for grade B and £235 for grade D. The 2023 guideline hourly rates were £218 for grade B and £126 for grade D. The judge held that the base costs should have been no more than £3,000, which in itself was more than the guideline rates total of £2,326.

A success fee of 100% could not be justified given the minimal risks involved in the case being unsuccessful. Applying the traditional ready reckoner table for success fees, a 100% success fee is applicable where the chances of winning are assessed at 50%. In this case, on the facts, the prospects of success were about as close to 100% as there could be. Allowing for the minimal risks involved and taking into account the deferment of not being able to charge until the conclusion of the case, a more realistic assessment of the prospects of success would be 90%, which applying the ready reckoner equates to a success fee of 11%. The appropriate success fee in this case was therefore £3,000 x 11% = £330 plus VAT.

As to the ATE premium, this was a question of whether taking out an ATE policy was a reasonable expense for the litigation friend to incur on the child’s behalf. The judge held that it was not. What risk was there to insure against where the solicitors’ own client profit costs were covered by the CFA? The risk of not being able to recover the court issue fee? The defendant’s claims handling agents had told the litigation friend that a court hearing was necessary so there was no risk whatsoever of failing to recover that. The costs of the medical report? Again, the claims handling agents had explained that a medical report was required and that the litigation friend should instruct solicitors to obtain one, which she did. All the disbursements were paid by the defendant without question as part of the proposed settlement and there was no real risk that they would not do so. The only possible risk of an adverse costs order was in the event of failing to beat a Part 36 offer, but given that approval by the court was always going to be required, that risk in this case was practically non-existent and certainly did not justify the expense of a premium calculated as 10% of the recovered damages plus IPT (the judgment contains an internal inconsistency here, stating £1,100 in paragraph 29 but £1,120 in paragraph 15). The deduction of the ATE premium was therefore disallowed. If HHJ Monty KC in Duffield meant that wherever there was any risk it was always reasonable to take out an ATE policy (and the judge doubted that is what he meant, rather that each case had to be considered on its own facts), then District Judge Lumb respectfully disagreed.

Conclusion and Postscript

The appropriate deduction of additional liabilities from the claimant’s damages was limited to the success fee of £330 plus VAT.

District Judge Lumb concluded by raising continuing concerns about how some firms are operating in their approach to charging through CFAs. The judge expressed the hope that the Warning Notice issued by the SRA on 26 January 2026 regarding “no-win, no-fee” and other fee arrangements would provide a timely reminder of the importance to solicitors of complying with the SRA Principles and Solicitors Code of Conduct, particularly Principle 1 (upholding the rule of law and proper administration of justice), Principle 2 (upholding public trust and confidence), Principle 5 (acting with integrity), and Principle 7 (acting in the best interests of the client), as well as specific provisions of the Code including paragraph 3.4 (consider and take account of your client’s attributes, needs and circumstances), paragraph 8.6 (give clients information in ways they can understand, and ensure they are in a position to make informed decisions), and paragraph 8.7 (ensure that clients receive the best possible information about how their matter will be priced).

As the authors of Cook on Costs remarked in their latest edition at paragraph 36.8 (quoted with approval by the judge): “Courts will, however, remain alive to the possibility that unreasonably incurred base costs may give rise to the ‘Jackson Cap’ on success fees being reached where an assessment of those base costs is otherwise unnecessary because only a success fee is being sought.” That was the position in SJ (a minor suing by his mother and Litigation Friend AJ) v DGJ Tanner t/a Sopley Farm [2025] EWCC 17, in which the judge held that there was a considerable amount of duplication and “padding” in the bill of costs which substantially exceeded the fixed costs recoverable from the defendant, and which “raises a suspicion that the costs purported to have been incurred were artificially inflated to ensure that the 25% cap was always reached.”

Solicitors who are acting in this way through their business models have been warned that the courts will remain vigilant and the next step may well be investigation by the SRA given the Warning Notice of January 2026.

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Pre-Action Solicitor Costs Recoverable Where Insurer Settles Damages But Refuses Costs

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The Senior Courts Costs Office’s decision in Alphabet (UK) Limited v AXA Insurance UK plc [2026] EWHC 674 (SCCO) concerned whether a vehicle leasing company acted reasonably in instructing solicitors before issuing proceedings to recover vehicle damage, and whether fixed recoverable costs applied to any resulting costs order.

Background

Alphabet (UK) Limited, a vehicle leasing company forming part of the BMW Group, was the registered owner of a Citroën van leased to Acorn Engineering Limited (“Acorn”). The van was insured by AXA Insurance UK plc under a policy taken out by Acorn. On 8 February 2023, the van was seriously damaged in a road traffic accident and was subsequently written off as uneconomical to repair. Regulations 2 and 3 of the European Communities (Rights Against Insurers) Regulation 2002 permitted Alphabet to pursue a claim directly against AXA in respect of the loss.

By 28 March 2023, solicitors had been instructed on behalf of Alphabet. On that date, the solicitors wrote to AXA notifying them of their instruction, nominating motor engineers to value the van and its salvage in the event of any dispute, and making a Part 36 offer to settle the claim for vehicle damage at £12,408.70. The letter made clear that costs were also being sought. On the same day, AXA’s agent, Copart UK, responded asserting entitlement to credit for a £500 policy excess and offered £11,909.88 in settlement of the damages claim. No mention was made of costs in that counter-offer. Alphabet subsequently delivered a bill for its costs totalling £1,006.80 plus VAT. AXA declined to pay those costs.

Proceedings were issued in the Civil National Business Centre on 12 March 2024 under Part 7 of the Civil Procedure Rules. The issue arising was understood to concern costs only and District Judge Worthington, sitting in the County Court in Willesden, transferred the matter to the SCCO on 29 May 2025. At a directions hearing on 3 September 2025, Costs Judge Brown, sitting as an ex officio District Judge of the County Court, determined that the principal issue was whether a costs order should be made at all, rather than merely the quantum of costs, and that the matter should therefore remain in the County Court.

The substantive hearing took place on 16 January 2026, with a further hearing on 13 March 2026. Benjamin Williams KC appeared for Alphabet, instructed by Clifford James Consultants Limited. Elahe Youshani appeared for AXA, instructed by Kennedys Law LLP. The judgment was handed down on 23 March 2026.

An earlier argument advanced by AXA—that the claim had been settled before the commencement of proceedings without costs—was withdrawn at the directions hearing. A further question as to whether the Part 36 offer had been accepted was also raised but was quickly resolved; it was clear that no such acceptance had taken place.

Costs Issues Before the Court

Three distinct costs issues fell to be determined. The first was whether the proceedings themselves constituted an abuse of process, AXA’s position being that it was abusive to issue Part 7 proceedings solely for the purpose of obtaining a costs order where there was no genuine dispute as to the underlying damages claim. The second, and more substantively argued, issue was whether it had been reasonable for Alphabet to instruct solicitors at all, given the prompt settlement of the damages claim and Alphabet’s status as a sophisticated commercial entity with regular experience of such matters. The third issue—which emerged as perhaps the most technically complex—was the basis upon which any costs order should be framed, specifically whether the fixed recoverable costs (FRC) regime under CPR Part 45 applied, and if so, what sum was recoverable.

The FRC point arose in an unusual way. Prior to the January 2026 hearing, both parties had proceeded on the common assumption that any costs would be assessed on the standard basis. Shortly before that hearing, it was argued that the FRC regime under CPR 45 applied, on the basis that the normal track for the claim was the fast track and that it would be assigned to complexity band 1, producing a fixed costs figure of £599. Mr Williams KC then contended that the January hearing itself constituted a “trial” for the purposes of the FRC regime, which would entitle Alphabet to the full fixed costs for a trial, including an advocate’s fee—a significantly higher sum. Neither party had addressed this point in their earlier submissions, and the judge requested further clarification before the March 2026 hearing.

The judge also raised, of his own motion, the question of whether the costs of the proceedings themselves could be dealt with proportionately, noting that the current dispute did not sit easily within the FRC framework as drafted, and querying whether the matter might have been more appropriately brought under Part 8 rather than Part 7.

The Parties’ Positions

Alphabet (Claimant)

Alphabet’s position was that the claim as a whole had not settled, because although there had been no dispute as to the value of the damages, AXA had not agreed to pay costs in circumstances where Alphabet had made clear, before AXA’s offer was made, that no complete agreement existed. Alphabet relied on the witness evidence of Mr Jackson, its Used Car Operations Manager, who explained that the company habitually engages solicitors to recover its losses in claims exceeding £10,000, and that it aims to recover the costs of doing so. Mr Jackson’s evidence set out a number of reasons why solicitor instruction was a reasonable and necessary part of Alphabet’s business operations: insurers frequently attempt to under-settle, raise liability issues, and seek to retain salvage to which they have no entitlement; insurers commonly make offers limited to the remaining finance rather than the pre-accident value less salvage; and the appointment of lawyers enables Alphabet to operate on equal terms against major insurers with in-house legal expertise. Mr Jackson also noted that the prompt instruction of solicitors had in fact led to an expeditious resolution of the claim, and that solicitor involvement enabled Alphabet to police the terms on which vehicles are written off and their salvage disposed of by licensed agents—a matter of public safety importance.

On the FRC point, Mr Williams KC argued that the normal track for the claim was the fast track, and that the FRC regime therefore applied. He submitted that the existence of a fixed costs provision for claims of this nature in Table 12 of CPR 45 was itself indicative that the instruction of solicitors in such claims was reasonable—otherwise there would be no provision for fixed costs at all. He further submitted that the January 2026 hearing constituted a “trial” or “final hearing” for the purposes of CPR 45.45(1)(d), relying on Bird v Acorn [2017] 1 WLR 1915, such that Alphabet was entitled to the full fixed costs for a trial together with an advocate’s fee.

On the abuse of process point, Alphabet relied on Birmingham City Council v Lee [2008] EWCA Civ 891, Ayton v RSM Bentley Jennison [2018] EWHC 285, and Moreira v French (HHJ Stewart, CC, 30 September 2008), all of which supported the proposition that where a defendant refuses to pay pre-action costs, the claimant’s only remedy is to issue proceedings.

AXA (Defendant)

AXA advanced two principal arguments. First, it contended that the proceedings were an abuse of process, there being no real dispute as to the damages claim which had already been paid. This argument was not ultimately pressed with any vigour at the hearing, and Ms Youshani appeared to acknowledge the force of the authorities relied upon by Alphabet.

Second, and more substantively, AXA argued that it had not been necessary for Alphabet to instruct solicitors. The submission was essentially that Alphabet, as a sophisticated commercial body dealing with such matters on a regular basis, had been too quick to instruct solicitors and should have allowed time for the matter to resolve itself. As events demonstrated, had Alphabet waited, an offer would have been received without the need for legal representation. Ms Youshani pointed to the fact that arrangements were already being made to deal with the damaged vehicle, and that agents had been appointed to deal with uninsured losses arising from the accident. The test, she suggested, was whether it had been necessary to instruct solicitors, rather than merely reasonable to do so.

On the FRC point, AXA’s position was that if a costs order were made, the applicable sum under the FRC regime would be £599, on the basis that the claim would normally be allocated to the fast track and complexity band 1.

Abuse of Process

Costs Judge Brown rejected the abuse of process argument. It was well-established that where a defendant refuses to pay costs properly incurred in the pre-action process, a claimant may issue proceedings to recover them. This was recognised by the Court of Appeal in Birmingham City Council v Lee, where Hughes LJ explained the importance of ensuring that defendants cannot evade liability for pre-action costs by strategically conceding damages only. Similarly, in Ayton v RSM Bentley Jennison, May J held that when a defendant tendered damages but refused to pay the claimant’s pre-action costs, “the only option left to a claimant” was to issue proceedings. This reasoning was echoed in Moreira v French, where the court observed that absent agreement, a claimant would have to issue proceedings for a nil-damages claim merely to recover costs.

There was an obvious problem with AXA’s position. In many claims—the judge gave the example of damages claims by victims of mesothelioma—the instruction of solicitors is plainly reasonable. Many such claims are settled before proceedings, and parties are encouraged in various pre-action protocols to settle their claims without the need for litigation. If AXA were right, an unscrupulous defendant could simply pay damages which are claimed and refuse to pay costs, and there would be no remedy for the claimant.

Further, the provisions of Part 36 contemplate that a claim may be settled before issue with the benefit of a costs order (see CPR 36.7). The rules anticipate that in respect of a claim where the normal track is the fast track for a claim for vehicle damage arising out of a road traffic accident, in the event of the claim being settled before proceedings are commenced the claimant would ordinarily be entitled to costs of £599. The judge reasoned that where there is an entitlement to an order for payment of this amount there must be a means of obtaining it. Accordingly, and in the absence of any other apparent means of doing so, a claimant whose claim for damages is settled before proceedings are commenced must be able to issue proceedings for an order for costs.

Reasonableness of Instructing Solicitors

The judge turned to the more substantive issue: whether it had been reasonable for Alphabet to instruct solicitors. Neither party had provided any authority which provided any principled or binding determination on this issue. The judge was not satisfied that the test was, as Ms Youshani suggested, whether or not it was necessary for Alphabet to instruct lawyers. There appeared to be no basis in law for such a high hurdle. If she were right it would be open to a losing party to argue that it would have been possible for someone to represent themselves (in many cases that may be so) and that the costs they actually and reasonably incurred would not be recoverable. The question was whether it was reasonable for solicitors to be instructed, albeit that test inherently imports at least some element of need.

The judge accepted that the line drawn in Table 12 was at least indicative for this purpose, so that in a claim for in excess of £10,000 it was prima facie reasonable to instruct solicitors. The judge did not think that merely because Alphabet was a commercial organisation, possibly of some size, with a degree of sophistication or that they would be dealing with these matters on a regular basis, made it unreasonable to instruct solicitors. Just because the company had experience and expertise in car leasing did not mean it had the expertise to deal with a claim for damages. Such a claim might involve consideration as to whether there is responsibility as a matter of law for an accident. Moreover the higher the value of the claim the more important the claim can be assumed to be, and the more important and complex it may be.

Perhaps recognising the force of these points, Ms Youshani’s emphasis was on the assertion that it was premature to instruct solicitors even if it were reasonable in general to instruct solicitors in a claim such as this. True it was that arrangements were being made to deal with the damaged vehicle and agents were appointed to deal with uninsured losses arising out of the accident. However much of the material she relied on was not known by Alphabet at the material time. Moreover, there was no admission of liability by the date of instruction and it seemed to the judge not unreasonable for Alphabet to instruct lawyers from the outset of any potential claim.

On the limited information available, the judge was unable to conclude that there was any degree of certainty that AXA would accept liability or make an offer in the amount claimed. In the event AXA made an offer for the full sum Alphabet said was due on same day as the various letters sent by Alphabet’s solicitors, and this happened very rapidly after solicitor’s instruction. Had Alphabet delayed instruction they may not have received an offer so quickly. In fact liability was somewhat transiently put in doubt at some point thereafter. It appeared that whilst AXA acted promptly once solicitors were instructed, whether they would have acted so quickly if no solicitors were instructed and costs were not payable was perhaps a matter of speculation.

The judge noted that he could readily understand that if there were a protocol or mutual understanding by which insurers were required unilaterally to inform interested parties, such as the owner of the vehicle, if liability is disputed and make a suitable offer within a certain period, things might be different. He was not however made aware of any such protocol or understanding. Alphabet was entitled to proceed with the claim promptly and the judge could see why the prompt resolution of these claims was important for their business. It was not suggested that it was improper or unreasonable for them to press for an admission of liability.

The judge accepted Mr Jackson’s witness evidence as to the reasonable business need to instruct solicitors. There had been no cross-examination of Mr Jackson on the contents of his witness statement. Ultimately it should benefit insurers to have claims presented with the benefit of some legal assistance. For these reasons the judge accepted that it was reasonable to instruct solicitors.

Application of Fixed Recoverable Costs

Before turning to the FRC analysis, the judge noted that having looked at the bill of costs, the costs claim had the appearance of being unreasonably high. He was concerned that before any Part 36 offers were made the parties should first have been clear that a dispute arose. Further, it was difficult to justify any involvement of a Grade A fee earner, and it struck the judge that if payable in principle it was difficult to see how the reasonable cost might have exceeded a very modest sum. It seemed that before the FRC regime came in, it would have been at the very least doubtful that a claim would have been made by the claimant to recover any costs.

The judge noted that where a party represents itself, the FRC do not apply (see CPR 45.4). This exception might be relevant where it is said that no representation was reasonable.

The judge agreed that the normal track for this claim was the fast track. A District Judge may have allocated this matter to the small claims track having regard to the factors in CPR 26.13. The claim may have had limited complexity. But merely because that might have happened was not relevant for the purposes of CPR 45.43. For these purposes the term “normal track” is a term of art, relying on the unreported decision of Costs Judge Haworth in Thaxton v Goodman (23 November 2010).

The judge addressed a conceptual difficulty: it appeared from Table 12 that even if there is settlement of the claim before issue, some view must be taken as to whether the claim “would normally be” allocated to the fast track. Plainly at that stage nobody would have known how long the trial would be, or indeed as to whether there might be the need for expert evidence, so the parties and the court cannot ascertain whether it was the normal track for the purposes of allocation under CPR 26.9(5). CPR 45.43 assumes that the “normal track” can be ascertained even in a claim which settles before issue. It seemed to the judge that the drafter of the rules must have assumed that in deciding whether the Table 12 fixed costs apply to claims which settle pre-issue, the parties and the court should look to the amount of the claim and the nature of the claim but not the provisions of CPR 26.9(5) (length of trial etc.) in deciding the track to which the claim would normally be allocated.

The judge added that he was not sure that it was open to AXA to complain that the costs were too high in this case, albeit the work actually done was very modest. It is in the nature of a fixed costs regime that there will be instances where the payment exceeds that which would be assessed as being reasonable; but there may be other more difficult cases where the fixed costs payable are less than would be reasonable. If the judge were to parse back the costs so that only reasonable costs were allowed it would undermine the ‘swings and roundabouts’ nature of the scheme.

It followed that if the claim was treated as having settled, Alphabet was entitled to £599. Had AXA accepted that in principle that would have been the end of the matter.

The Costs of the Proceedings

The question of what order to make as to the costs of the proceedings themselves emerged as perhaps the more difficult element of the dispute between the parties. Both parties, at least in their written submissions following the hearing in January, appeared to indicate that if the judge were to accept Alphabet’s case on the above two points, it ought to follow that the FRC apply and indeed that that hearing should be treated a “trial” for these purposes. Reference was made to CPR 45.45(1)(d) which provides that the reference in Table 12 to a ‘trial’ is a reference to a ‘final hearing’, and to Bird v Acorn [2017] 1 WLR 1915.

As both advocates observed, the current dispute did not sit easily within the FRC as drafted. The difficulty was perhaps not so obvious in this case given the sums involved but if in principle Alphabet were right about this, and the costs of these proceedings can only be awarded on the basis that the hearing that took place were a ‘trial’, then the costs payable in similar circumstances involving a Complexity Band 4 case might be said to be highly disproportionate (c. £10,000 plus VAT). It might be questioned whether Parliament can have intended such an outcome.

Ms Youshani made it clear that she was not arguing that Alphabet acted unreasonably when issuing the claim under Part 7. The judge was told that in other cases insurers appear to have equated the position to that which applies in Costs-only proceedings, when there is an agreement that costs are payable (see CPR 46.14). Here there was no agreement that costs were payable. But since, on one view, the only real issue was about costs the judge raised the question as to whether this claim could be dealt with under the more general provisions of Part 8. If there is, as the parties agree, a discretion as to whether pre-issue costs are payable then it might be said that there must be a proportionate way of resolving any issue that might arise as to the exercise of that discretion.

The judge determined that it was not necessary or appropriate to determine the issue as to the order as to costs at that stage. He stated that his comments were not intended to do anything more than indicate some concern, not binding determinations. The matter was reserved for further submissions.

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Senior Costs Judge Establishes 25% Markup Cap For Medical Reporting Organisation Fees

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The Senior Courts Costs Office’s decision in JXX v Archibald & Anr [2026] EWHC 630 (SCCO) establishes a new framework for assessing Medical Reporting Organisation fees in personal injury litigation, rejecting both parties’ primary submissions and crafting a novel middle path.

Background

This matter concerned the recoverability of Medical Reporting Organisations fees (MROs) in personal injury litigation. The Senior Costs Judge was required to determine the approach to assessing such fees following the settlement of all other costs in two lead cases: JXX v Archibald & Anr and HLA v LXA & Anr.

In JXX, a reserved judgment was handed down on 17 January 2025. This judgment put the claimant to an election regarding providing further information on medical evidence fees. The claimant chose to provide that information with the agreement of the MRO involved, Medical and Professional Services Limited (MAPS), which was subsequently joined as a Third Party. Given the significance of the issues, an application was made in the related case of HLA for it to be heard concurrently. This was granted, and the MRO in that case, Premex Services Limited (Premex), was also joined as a Third Party. An application by the Association of Medical Reporting Organisations (AMRO) to intervene was refused in July 2025.

By early October and November 2025 respectively, the bills of costs in both the JXX and HLA cases were agreed save for the fees attributable to the MROs. The experts’ own fees were also agreed. Consequently, the hearing between 17 and 20 November 2025 constituted a detailed assessment focused solely on the recoverability and quantum of the MRO fees. The parties, including the third-party MROs, filed 27 witness statements, with half a dozen witnesses cross-examined on behalf of the defendants.

Costs Issues Before the Court

The central issue was how the court should assess the reasonableness of fees charged by an MRO for its services in arranging and administering the procurement of medical expert evidence. The dispute crystallised around two competing legal and evidential approaches.

The first, advocated by the defendants, was based on the county court decision in Stringer v Copley (2002). This approach, sometimes called “the Stringer Cap”, required the receiving party to demonstrate that the MRO’s charges did not exceed the reasonable and proportionate cost of the work if it had been done by the instructing solicitors themselves. This necessitated a detailed breakdown distinguishing the expert’s fee from the MRO’s charges.

The second approach, advanced by the claimants and the MROs, argued that MRO fees should be treated as a disbursement and assessed for reasonableness in amount on a holistic basis, looking at the aggregate invoice. They contended that a retrospective, time-based breakdown was artificial and impossible as MROs do not record time like solicitors. Their model involved applying a percentage markup to the expert’s fee, calculated on a macro, business-wide basis rather than being specific to individual cases.

The court was therefore required to determine: (1) the correct characterisation of MRO fees (as outsourced solicitors’ work or a disbursement); (2) the appropriate legal test for assessing their reasonableness; (3) whether any elements of the fee (such as costs associated with deferred payment or write-off facilities) were irrecoverable as “funding costs”; and (4) if recoverable, how to quantify a reasonable fee.

The Parties’ Positions

The Defendants’ Position: The defendants, represented by Roger Mallalieu KC, argued that the court should follow the approach established in Stringer v Copley and affirmed in subsequent cases such as the Claims Direct Test Cases and CXR v Dome Holdings Ltd. They submitted that MRO fees were only recoverable if shown not to exceed the cost of a solicitor doing the work. This required a clear breakdown separating the expert’s fee from the MRO’s administrative charges. The defendants contended that the claimants had failed to provide sufficient evidence to satisfy this test. They also argued that elements of the MRO fee relating to deferred payment terms and write-off facilities constituted irrecoverable “funding costs” pursuant to the principle in Hunt v R.M. Douglas (Roofing) Ltd. In the absence of a breakdown to excise these irrecoverable elements, the entire MRO fee should be disallowed.

The Claimants’ and MROs’ Position: The claimants and the joined MROs (represented by Benjamin Williams KC, Robert Marven KC and Nicholas Bacon KC) contended that the Stringer approach was flawed. They argued that MRO fees were properly characterised as a disbursement, not outsourced profit costs. The correct test was simply whether the aggregate fee for the medical evidence (expert’s fee plus MRO charge) was reasonable and proportionate. They emphasised the valuable services provided by MROs, including maintaining expert databases, ensuring compliance, and managing administration efficiently. They denied that their commercial terms involved providing “funding”, arguing that deferred payment was an inherent part of the personal injury costs landscape, analogous to a solicitor’s retainer. They submitted that the fees were set by a competitive market and that the court should not engage in an artificial “deconstruction” of a globally priced service. In the absence of evidence from the defendants showing the fees were unreasonable, they should be allowed in full.

The Court’s Decision

Senior Costs Judge Rowley handed down a detailed judgment which departed from both parties’ primary submissions and established a new framework for assessing MRO fees. The significance of the decision lies in its rejection of both the defendants’ Stringer-based approach and the claimants’ holistic aggregate approach, crafting instead a novel percentage-based cap.

Characterisation and Legal Test: The judge held that MRO fees are a disbursement, not outsourced solicitors’ work. This was the fundamental legal holding that distinguished the judgment from previous approaches. Applying the test from Crane v Canons Leisure Centre, which focuses on the nature of the work done (whether it is solicitors’ work) and where responsibility for the work lies, the judge concluded that the work was not “solicitors’ work” in the requisite sense. The work done by MROs was described in Stringer as “administrative work”, which could be carried out by non-fee earning staff. Furthermore, once the expert was chosen, the MRO was left to organise matters until the report was provided, with responsibility for the report’s contents lying with the expert, not the solicitor. Consequently, the Stringer “cap” – requiring a comparison with a hypothetical solicitor’s cost – was not the correct legal test to apply. The court rejected the defendant’s argument that a quasi-solicitor breakdown was necessary because such a breakdown would be vulnerable to the challenge that the work was administrative rather than legal work in any event, and because the responsibility for the work did not lie with the solicitor in the manner described in Crane.

Recoverability of “Funding Costs”: The court rejected the defendant’s argument that deferred payment terms and write-off facilities rendered the fees irrecoverable. It found these were commercial features of the relationship between solicitors and MROs in a market where all participants typically waited for reimbursement until the end of a case. They did not constitute “funding costs” of the type prohibited by Hunt v Douglas Roofing. The judge’s reasoning was strengthened by a comparative analysis: he noted that experts who were instructed directly also effectively deferred payment, and solicitors operating under CFAs similarly delayed receipt of their fees. The purpose of the MRO terms was to provide medical evidence, not to provide credit, even though deferred payment was a byproduct of the agreement. This was entirely different from a disbursement loan from a bank or other litigation funder. The write-off facility was similarly a commercial element of the wider contractual relationship, not a separate service constituting funding. The judge emphasised that the MRO arrangement was consistent with the broader personal injury costs landscape, where staggered payment was an inherent feature affecting all participants.

Assessment of Reasonableness and Quantum: While rejecting the Stringer breakdown, the judge also rejected the claimants’ argument that the court could do no more than accept the aggregate fee as reasonable based on market competition. The evidence demonstrated that MROs applied a percentage markup to the expert’s fee – the judge accepted this evidence from the MROs themselves. Premex charged 35% or 45% for most evidence, and MAPS most commonly charged 53% but also 30%, with outliers ranging from 20% to 104%. However, the judge rejected the argument that these percentages were made reasonable by market competition or that they should be allowed in full between the parties.

The judge found the “tripartite tension” (where the payer is not the service chooser) meant market competition was an imperfect regulator of reasonableness between the parties. Those ultimately paying for the fees had no say in the competition between MROs. The judge also rejected the claimants’ assertion that MROs negotiated discounted rates with experts. The evidence, save for one expert (Professor Cosker) whose testimony the judge did not find convincing on this point, showed that expert fees were consistent regardless of whether instruction came via an MRO or directly from solicitors. In a market where the MRO placed a percentage markup on the expert’s fees, it would be self-defeating to seek to reduce the figure on which the markup would be applied. The MROs’ own evidence therefore showed that their fees inflated the experts’ fees by the percentage markups claimed.

The judge reached the 25% figure by applying a “cautious approach” based on several factors:

(i) limitations in the receiving parties’ evidence;

(ii) the lack of detailed cost analysis from the MROs demonstrating their cost base;

(iii) the tripartite tension which meant market competition was an imperfect regulator of reasonableness between the parties; and

(iv) the variation in percentages (ranging from 30% to 53% generally, with outliers beyond this) which reflected ongoing commercial relationships between solicitors and MROs rather than case-specific factors justifying different rates.

The 10% increase in Premex’s markup during the HLA case suggested later cases were making up for previous shortfalls rather than reflecting current case profitability.

On this basis, the judge held that a markup of 25% on the expert’s fee represented a reasonable amount recoverable between the parties. Any markup claimed below 25% would be allowed as claimed; any claimed above 25% would be reduced to that figure. Importantly, the judge held that this percentage should apply to the entire expert invoice, including disbursements such as expert travel costs, for reasons of simplicity and practicality. As the judge explained, “the percentage mark up is intended to achieve an overall sum” and allowing it only on certain elements would simply justify a higher percentage on those elements.

The judge concluded that this percentage-based approach provided a practical and fair method of quantification, avoiding the disproportionate cost of detailed deconstruction in every case while ensuring paying parties were not liable for unreasonable charges. He suggested that stating this maximum recoverable percentage on future invoices would assist transparency and contrasted this simple disclosure with the impractical “quasi-solicitors’ breakdown” that would not be workable in practice.

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Late Acceptance of Part 36 Offer | Fixed Costs Apply at Relevant Period Expiry Despite Later Multi-Track Allocation

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The Court of Appeal’s decision in Attersley v UK Insurance Limited [2026] EWCA Civ 217 resolves an important question about the interplay between Part 36 costs consequences and the fixed costs regime for claims that exit the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents.

Background

The claim arose from a road traffic accident on 9 March 2018. The claimant, Laura Attersley, initiated her claim under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (the RTA Protocol) on 19 March 2018, valuing it at up to £10,000. The claim exited the protocol on 9 April 2018 after the defendant, UK Insurance Limited, disputed liability pending enquiries. Liability was subsequently admitted on 29 April 2019.

Shortly before limitation expired, the claimant issued a Part 7 claim form on 13 February 2021, now valuing the claim at up to £150,000 with reference to ongoing physical and psychological issues. The defendant filed a defence admitting liability on 4 March 2021 and, on the same day, made a Part 36 offer of £45,000. The 21-day relevant period for acceptance expired on 25 March 2021.

The case was allocated to the multi-track at a case management conference on 5 January 2022. A costs management order was made. It was agreed by the parties at the CMC that the case was suitable for the multi-track given the quantum claimed, the expert evidence required, and the time estimate for trial. On 8 July 2022, the claimant accepted the defendant’s Part 36 offer, which had not been withdrawn. The acceptance was late, occurring well after the expiry of the relevant period. A dispute arose as to the correct basis for assessing the claimant’s costs up to the date of acceptance, leading to a costs hearing.

Costs Issues Before the Court

The central issue was determining the costs consequences of the claimant’s late acceptance of the defendant’s Part 36 offer. The dispute turned on which rule in CPR Part 36 governed the situation. The claimant argued that because the case had been allocated to the multi-track by the date of acceptance, the fixed costs regime in Section IIIA of Part 45 was disapplied, and therefore her costs fell to be assessed on the standard basis under CPR 36.13. The defendant contended that the claim, having started under the RTA Protocol, was governed by the specific costs consequences for such cases set out in CPR 36.20, which provided for fixed costs even on late acceptance. The court had to decide whether allocation to the multi-track retrospectively ousted the application of rule 36.20.

The Parties’ Positions

The defendant argued that its construction was dictated by the plain wording of the rules. Rule 36.20(1) applied where a claim no longer continued under the RTA Protocol, which was the case here. Rule 36.20(4) specifically addressed late acceptance, entitling the claimant only to fixed costs for the stage applicable when the relevant period expired. It was submitted that rule 36.20 was a specific provision dealing with ex-Protocol claims, which should prevail over the more general rule 36.13. The defendant argued that the claimant’s interpretation would create a perverse incentive to delay accepting offers to try and secure a more favourable costs regime upon later allocation, undermining the purpose of Part 36 to encourage early settlement.

The claimant’s primary argument relied on the Court of Appeal’s decision in Qader v Esure Services Ltd [2016] EWCA Civ 1109. She submitted that the effect of allocation to the multi-track was to disapply the fixed costs regime in Section IIIA of Part 45 entirely. Consequently, the claim no longer fell within the scope of rule 36.20, and the default position in rule 36.13 applied, with costs to be assessed on the standard basis. The claimant emphasised that her claim was always suitable for the multi-track and she was not seeking a windfall, but rather the costs appropriate to such a case. She also advanced an alternative argument that even if rule 36.20 was engaged, rule 36.13(3) (“except where the recoverable costs are fixed by these Rules”) meant standard costs applied because allocation had disapplied the fixed costs.

The Court’s Decision

The Court of Appeal allowed the defendant’s appeal, restoring the order that the claimant was entitled only to fixed costs. Lord Justice Miles, giving the leading judgment with the agreement of Lady Justice Falk and Lord Justice Lewison, held that rule 36.20 applied and that the claimant was restricted to the fixed costs applicable at the date the relevant period expired.

The court found that the natural and straightforward reading of the rules was that where, on the date the relevant period of a Part 36 offer expired, the claim was still within the Section IIIA fixed costs regime (i.e., not yet allocated to the multi-track), the consequences of acceptance were governed by rule 36.20. Rule 36.20(4) expressly fixed the claimant’s entitlement by reference to the costs stage applicable at the expiry date of the relevant period. In this case, that date (25 March 2021) was long before allocation to the multi-track (5 January 2022).

The court confined Qader to its context and rejected the claimant’s broad proposition that it had retrospective effect for all purposes, including Part 36. It held that Qader decided that the fixed costs regime should not apply to a case once it was allocated to the multi-track, but it did not establish that allocation operated to treat the case as if it had never been within the regime for all purposes, retrospectively. The words “for so long as the case is not allocated to the multi-track” in rule 45.29B had a temporal meaning; the regime ceased to apply prospectively from allocation, not retrospectively. The court noted that Qader did not have to consider the interplay with other rules or the question of potential retrospective effect of allocation for other purposes.

The court emphasised that this interpretation promoted certainty and coherence with the purpose of Part 36. Drawing on the reasoning in Qader itself, where Briggs LJ had explained that requiring parties to guess whether a case which settled prior to allocation was subject to fixed costs would introduce damaging uncertainty, the court held that the claimant’s interpretation would similarly bring undesirable uncertainties into the operation of Part 36. It ensured that a defendant’s liability for costs was anchored to the costs environment applicable during the period when the claimant was deciding whether to accept the offer. It would be surprising and potentially unjust if a claimant could improve their costs position by accepting late, based on a subsequent allocation outside the defendant’s control. This would undermine the regime’s aim of encouraging early settlement.

The court rejected the claimant’s alternative argument based on rule 36.13(3). It gave two reasons: first, rule 36.13 is expressed to be “subject to” rule 36.20, so it was necessary to determine whether rule 36.20 applied before considering the specific wording of rule 36.13(3); and second, where a case continued to come within the fixed costs regime on the date when the relevant period ended, the recoverable costs were indeed “fixed” by the rules for the purposes of rule 36.13(3).

The court concluded there was no conflict between the rules, but if there were, the specific rule 36.20 would prevail over the more general rules in Part 45. The court also noted that the Rules Committee may wish to consider scenarios where a Part 36 offer is made after multi-track allocation or where the relevant period expires after such allocation, as the existing rules do not yield entirely straightforward answers in such cases. The court noted that at first instance, Stacey J had found that the claim was “always likely to be allocated to the multi-track” once the Part 7 form was issued, yet the court reached its decision favouring fixed costs even in such a case, underscoring the strength of the rule-based and policy reasoning.

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Court Of Appeal Overrules Mundy | 90:10 Liability Offers Valid Under Part 36 — But Only Where Liability Is Determined

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The Court of Appeal’s decision in Smithstone v Tranmoor Primary School [2026] EWCA Civ 13 overrules Mundy v TUI and confirms that 90:10 liability Part 36 offers are valid in principle, while clarifying that such offers only trigger CPR 36.17(4) where there is a determination of liability rather than a global monetary settlement.

Background

The claim arose from a minor injury sustained by Jayden Smithstone, a ten-year-old pupil, when his fingers became trapped in a door at Tranmoor Primary School on 25 September 2018 [§2]. A claim in negligence and under the Occupiers’ Liability Act 1957 was submitted via the Claims Notification Form into the Portal on 31 October 2018 [§3], bringing it into the Low Value Personal Injury Protocol and the associated fixed costs regime.

On 13 December 2018, before any medical report had been served, the claimant made a Part 36 offer to settle liability on a 90/10 basis in his favour [§4]. This offer was rejected by the defendant on 19 December 2018. Proceedings were subsequently issued. The defendant denied liability and raised issues of contributory negligence in its Defence [§5]. The case was allocated to the fast track and listed for trial. A further without prejudice offer to settle the entire claim for £3,500 was made by the claimant on 18 March 2020, which was not accepted [§6-7].

The matter was listed for a fast track trial before Deputy District Judge Ruwena Khan on 26 November 2020 [§8]. On the day of trial, the defendant’s witness failed to attend and the parties negotiated a settlement of the claim in the global sum of £2,650 [§8-9]. The settlement was put before DDJ Khan for approval pursuant to CPR r.21.10, as the claimant was a child. The judge approved the settlement sum [§10].

The parties were unable to agree on costs. The claimant argued that the case should be taken outside of the fixed costs regime due to the consequences of its Part 36 offer on liability, invoking CPR r.36.17 [§10]. The defendant contended that fixed costs applied. DDJ Khan ruled that the fixed costs regime applied, stating there was nothing exceptional about the case and that the settlement sum was lower than the claimant’s previous offers [§12]. An order was sealed on Form N24 recording the approval of the £2,650 settlement and ordering the defendant to pay the claimant’s fixed costs, summarily assessed at £7,114.50 [§13].

Permission to appeal was granted more than three years later [§14]. His Honour Judge Baddeley heard the appeal on 19 August 2024. The defendant relied heavily on the High Court decision in Mundy v TUI UK Ltd [§14]. HHJ Baddeley, considering himself bound by Mundy, dismissed the appeal [§21]. The claimant then appealed to the Court of Appeal.

Costs Issues Before the Court

The central dispute concerned the recoverable costs following settlement of a fast track personal injury claim initially subject to fixed costs. The Court of Appeal was required to determine four specific issues [§27]:

      1. Whether the court-approved settlement constituted a “judgment” for the purposes of engaging CPR r.36.17.
      2. Whether, as a matter of principle, a claimant’s Part 36 offer to settle liability on a 90/10 basis (without specifying a monetary sum) could be effective to trigger the enhanced costs consequences under CPR r.36.17(4).
      3. If so, whether on the facts of this case the settlement outcome was “at least as advantageous to the Claimant” as the proposals in his 90/10 liability offer.
      4. If the answer to issue 3 was no, whether it would be “unjust” to confine the claimant’s solicitors to recovering fixed costs.

The Parties’ Positions

The Appellant/Claimant’s Position: The claimant argued that DDJ Khan had erred in law by not awarding the consequences under CPR r.36.17(4) when there was a “judgment” which was “at least as advantageous” as the terms of the Part 36 offer, and no finding that such consequences would be unjust [§23(1)]. It was submitted that the decision in Mundy v TUI, which the first appeal judge felt bound by, was decided per incuriam and should be overruled [§23(2)]. In the alternative, it was argued that the defendant’s conduct in running the case to a full trial on liability without making any offer on liability constituted circumstances justifying the use of the escape clause in CPR r.36.17 where it would be “unjust” to confine the claimant to fixed costs [§23(3)].

The Respondent/Defendant’s Position: The defendant advanced two primary arguments [§24]. First, it contended that the court-approved settlement was not a “judgment” for the purposes of CPR r.36.17, as it was a consensual agreement placed before the court for approval under CPR r.21.10. Second, should the court find there was a judgment, the 90/10 liability offer could not engage CPR r.36.17(4) because: (a) for a money claim, “more advantageous” is defined in money terms under CPR 36.17(2); (b) the offer made no monetary proposal and was therefore incapable of comparison; (c) the offer sought a liability concession which was never given; and (d) the settlement sum was less than 90% of the claimant’s own monetary offer [§24(ii)]. The defendant argued the 90/10 offer was not a genuine offer of concession but a tactical step, relying on AB v CD [§25]. In the further alternative, the defendant submitted it would be “unjust” to apply CPR r.36.17(4) in the context of a low value money claim where liability was not subject to separate determination [§26].

The Court’s Decision

The Court of Appeal (Bean LJ giving the lead judgment, with Phillips and Stuart-Smith LJJ agreeing) dismissed the appeal [§38-40].

On the first issue, the court held definitively that the court order approving the settlement was both a judgment and an order [§30]. Relying on Vanden Recycling Ltd v Kras Recycling BV [§29], the court found that the Form N24, which ordered the defendant to pay both damages and costs, was in substance and effect a final decision on the claim. Attempts to distinguish between the terms “judgment” and “order” were misconceived in this context [§30].

On the second and pivotal issue of principle, the Court of Appeal overruled the High Court decision in Mundy v TUI [§35]. Bean LJ found it “unfortunate” that Mundy had been decided without reference to binding Court of Appeal authority, specifically Huck v Robson, and indeed that save on the separate question of set-off, “no authorities are referred to at all” [§34]. In Huck, the Court of Appeal had held that a claimant’s 95/5 liability offer was effective for Part 36 costs consequences [§32]. The policy of the Civil Procedure Rules was to encourage settlement, including of discrete issues like liability [§34]. A 90/10 offer could constitute a genuine offer to compromise, reflecting a claimant’s legitimate desire for certainty over the ordeal of trial, and was not inherently incompatible with the mechanism of CPR r.36.17 [§32, §34]. The “generous outcome” for a claimant who beats their own Part 36 offer was consistent with the policy of the rule as affirmed in Broadhurst v Tan [§33]. Bean LJ also referred to Hill J’s observation in Chapman v Mid and South Essex NHS Foundation Trust that the factual context of Mundy was important [§34].

On the third issue – application to the facts – the claimant’s case failed [§36]. The court held that while a 90/10 liability offer could in principle engage CPR r.36.17, it did not do so on the facts of this case. For the offer to be triggered, the judgment needed to be “at least as advantageous” as the offer’s proposals. Here, liability was never determined [§36]. If the defendant had admitted liability, or DDJ Khan had tried the case and found the defendant 100% liable, there would have been a potential basis for awarding the claimant, pursuant to CPR 36.17, costs relating to the issue of liability from the date of the 90:10 offer [§36]. But that was not what happened. It was therefore impossible to say that the outcome of the case was a finding, even on liability, more advantageous to the claimant than a 90/10 apportionment of liability [§36]. Consequently, CPR r.36.17(4) did not apply.

On the fourth issue, the court rejected the argument that it was unjust to confine the claimant to fixed costs [§37]. Citing Webb v Liverpool Women’s NHS Foundation Trust, Bean LJ noted that the burden of showing that the usual consequences of Part 36 will be “unjust” presents a “formidable obstacle” [§37]. The defendant’s conduct in defending the claim to trial was not, in itself, a sufficient reason to depart from the fixed costs regime. Conversely, the court noted that had the claimant triggered CPR r.36.17, it would equally not have been unjust to require the defendant to pay the enhanced costs [§37].

As the claimant failed on the third issue, the order for fixed costs made by DDJ Khan was upheld and the appeal was dismissed [§38].

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

Background

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

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

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

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

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

Costs Issues Before the Court

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

The Parties’ Positions

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

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

The Court’s Decision

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

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

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

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

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