No Double Recovery | Represented Party Cannot Claim Both Solicitor Fees And Director’s Time

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

Background

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

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

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

Costs Issues Before the Court

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

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

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

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

The Parties’ Positions

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

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

The Court’s Decision

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

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

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

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

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

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

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

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Inadequate Estimate Fails To Establish Special Circumstances Under s70(3) Where Client Would Have Made The Same Choices

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The Senior Courts Costs Office’s decision in Biggar v Howard Kennedy LLP [2026] EWHC 132 (SCCO) confirms that deviation from a preliminary estimate will not establish special circumstances where the client’s conduct demonstrates they would have made the same choices regardless.

Background

Mr Alan Biggar made an application under section 70 of the Solicitors Act 1974 for the detailed assessment of 19 bills of costs delivered to him by his former solicitors, Howard Kennedy LLP [§1]. The bills, rendered between 29 June 2020 and 28 July 2023, totalled £195,954.60 [§1]. The Defendant’s records indicated that the first three bills, up to 26 August 2020, had been paid in full [§1]. The remaining bills were wholly or partly unpaid.

The Defendant had acted for the Claimant between June 2020 and June 2023 in connection with serious charges of fraudulent trading brought by the Financial Conduct Authority (FCA) relating to Worthington Group plc, a company listed on the London Stock Exchange [§5–6]. A restraint order, made on 13 April 2018 by HHJ Taylor at Southwark Crown Court, prevented the Claimant and his wife from dealing with their assets and did not contain an exception for legal fees [§10]. The retainer was governed by an engagement letter dated 12 June 2020 and the firm’s standard terms of business [§7]. The letter included a preliminary estimate of £10,000–£15,000 plus VAT for initial work (reviewing papers, liaising with the FCA, and providing initial advice), stating that further estimates would be provided as the matter progressed [§8–9].

The Claimant faced significant difficulties in funding his defence. An initial third-party funder, Mr Stephen Dando, withdrew in May 2021 [§19]. The Claimant’s estranged wife contributed £10,000 in October 2021 but was unable to provide further funding [§20]. Subsequent promises of funding from Anglo Swiss Advisory Ltd, outlined in a letter dated 14 October 2022, failed to materialise [§24–25]. That letter contemplated funding of at least €1,320,000 [§24]. Despite mounting unpaid fees, the Defendant continued to act. In July 2023, the parties entered a written agreement in which the Claimant acknowledged a debt of £101,137.42 and agreed to a repayment plan [§33]. The plan was not honoured [§34].

On 22 May 2024, the Defendant issued County Court proceedings for unpaid fees totalling £102,109.40 plus interest [§35]. The Claimant filed a defence challenging the reasonableness of the fees and sought an order for detailed assessment [§35]. Shortly thereafter, on 9 January 2025, he issued a Part 8 application in the Senior Courts Costs Office [§36]. On 15 January 2025, HHJ Evans-Gordon stayed the County Court proceedings pending the conclusion of the assessment claim [§36].

Costs Issues Before the Court

The court was required to determine two principal issues [§4]. First, whether the Defendant’s first three bills had been “paid” for the purposes of section 70 of the Solicitors Act 1974. If they were paid more than 12 months before the application, the court had no jurisdiction to order their assessment under section 70(4) [§3]. Second, whether “special circumstances” existed to justify an order for the assessment of the remaining unpaid bills. As the application was made more than 12 months after the delivery of those bills, the Claimant needed to demonstrate special circumstances to overcome the statutory restriction in section 70(3) [§3].

The Parties’ Positions

The Claimant’s Position: The Claimant argued that special circumstances existed. He contended that the existence of the restraint order was itself a special circumstance sufficient to justify assessment [§48]. He relied heavily on the Defendant’s initial cost estimate of £10,000–£15,000, arguing that the eventual fees of nearly £200,000 represented such a significant deviation as to call for an explanation [§51]. He stated he had relied on this estimate and was vulnerable when instructing the Defendant [§37, §51]. He also cited his involvement in a lengthy criminal trial as a factor explaining his delay in challenging the bills [§52]. Regarding payment, he submitted that, applying Menzies v Oakwood [2024] UKSC 34, he had not agreed to the allocation of specific payments to specific bills, and therefore the first three bills could not be considered “paid” [§53].

The Defendant’s Position: The Defendant submitted that the application was a tactical manoeuvre to delay payment [§54]. It argued that the first three bills had been paid by agreement, which could be inferred from the Claimant’s conduct in making payments against the outstanding balance over a prolonged period [§55–58]. On special circumstances, the Defendant contended the preliminary estimate was just that — preliminary — and was quickly superseded by events [§61]. It highlighted that the Claimant had later sought to raise over €1.3 million in funding, demonstrating his understanding of the true potential cost [§61]. The Defendant pointed out that the Claimant had repeatedly affirmed the debt, including in the July 2023 agreement, and had never queried the bills until faced with enforcement [§59–60]. It argued there was nothing out of the ordinary in a complex fraud case with a restraint order [§62].

The Court’s Decision

On Payment of Bills: Costs Judge Leonard found that the first three bills had been paid [§67]. Applying the principles from Menzies v Oakwood, the judge held that payment requires an agreement to the sum taken, which can be inferred from conduct [§63]. The Claimant had received the bills and subsequently arranged for payments to be made against the outstanding balance. This constituted an agreement to pay [§67]. The judge rejected the argument that agreement required specificity in allocating payments to particular bills, finding that standard to be artificial and impracticable [§66]. Consequently, the court had no jurisdiction to order assessment of those bills under section 70(4).

On Special Circumstances: The court dismissed the application, finding no special circumstances [§89].

The judge rejected the argument based on the initial estimate [§69]. The estimate was expressly preliminary and related only to initial work: reviewing papers, contacting the FCA and previous solicitors, and providing advice [§69]. The Claimant’s comparison of this figure to the total three-year costs was “artificial” [§69]. The judge noted that by October 2022, the Claimant was seeking to raise over €1.3 million, showing his understanding of the potential scale of costs [§77]. Furthermore, the evidence demonstrated that even with full knowledge of accruing costs, the Claimant wished to continue instructing the Defendant rather than seek cheaper alternatives. In March 2023, having already received bills exceeding £170,000, he emailed: “I’d rather of course stay where we are. I value your guidance and as we’ve said before when liberty is at stake its not a time to go for the cheapest” [§29, §73]. Accordingly, any failure to provide updated estimates had not caused the Claimant to lose an opportunity to make different choices [§76].

The court also rejected the other proposed special circumstances. The restraint order was not unusual for a substantial fraud prosecution [§80, §83]. The Defendant’s subsequent enforcement action was a reasonable consequence of unpaid fees and broken promises [§84]. The Claimant’s ongoing criminal trial did not adequately explain a 17-month delay in applying for assessment, especially as the trial did not begin until September 2024 — well after most of the delay had elapsed [§81]. The judge also found that the Defendant had complied with its retainer terms regarding notification of rate increases by detailing them on each invoice [§86]. In any event, such a discrete point would not justify a full assessment [§88].

In concluding, Costs Judge Leonard accepted the Defendant’s submissions as to the merits and motivation behind the application [§68]. The Claimant had been advised from the outset of his right to challenge bills and the applicable time limits, was reminded of this with every bill, and never expressed dissatisfaction until faced with enforcement [§79]. The Part 8 application was dismissed [§89].

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High Court Removes The “Murphy” Exceptionality Test For Inter Partes Costs In Criminal Judicial Reviews

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The Divisional Court’s decision in R (Bates) v Highbury Corner Magistrates’ Court [2025] EWHC 2532 (Admin) fundamentally changes how costs are approached in criminal judicial review proceedings by holding that the long-established Murphy principle was wrongly decided and should no longer be followed.

Background

The judicial review proceedings were brought by the Claimant, Mr Antony Bates, to challenge a summons issued against him in the Highbury Corner Magistrates’ Court and the decision to send him to the Crown Court for trial. The summons had been issued on the application of the Interested Party, Mr James Westhead, who was acting as a private prosecutor. In a judgment dated 31 January 2025 (R (Bates) v Highbury Corner Magistrates’ Court [2025] EWHC 184 (Admin)), the High Court quashed the summons and the committal decision, finding that the application for the summons was vexatious and an abuse of process [§1].

Following the substantive judgment, the Court convened as a Divisional Court (Lady Justice Whipple and Lady Justice Yip) to determine the Claimant’s applications for costs [§1]. The Claimant sought two distinct forms of costs relief: first, the costs incurred in bringing the judicial review proceedings pursuant to section 51(1) of the Senior Courts Act 1981; and second, the costs thrown away in the criminal proceedings in the magistrates’ court pursuant to section 19 of the Prosecution of Offences Act 1985 and regulation 3 of the Costs in Criminal Cases (General) Regulations 1986 [§2]. The costs claimed for the criminal proceedings were quantified at £235,922.11 (including over 400 hours of solicitor time), while the costs for the judicial review proceedings had not been quantified pending the Court’s decision on the principle of recoverability [§4-5]. The Defendant, the magistrates’ court, did not participate in the costs hearing, and the Interested Party, Mr Westhead, attended in person [§8, 90]. The Attorney-General appointed Paul Jarvis KC as Advocate to the Court to assist on the legal issues arising from the Murphy principle [§10-11].

Costs Issues Before the Court

The Court was required to determine two primary costs issues [§12]. The first concerned the Claimant’s application for the costs of the judicial review proceedings under section 51(1) of the Senior Courts Act 1981. This raised a fundamental point of law as to whether the High Court’s general discretion to award costs in such proceedings was circumscribed by the principle established in Murphy v Media Protection Services [2012] EWHC 529, which held that costs in criminal causes or matters should only be awarded under the civil regime in exceptional circumstances [§24]. The Murphy principle had been followed in numerous subsequent cases, with the category of “exceptional circumstances” described as “very narrow indeed” [§34]. Importantly, in none of the cases since Murphy had a court found circumstances sufficiently exceptional to permit departure from the criminal costs regime [§34]. The Court had to decide whether the Murphy principle was correct or should be departed from, and if the discretion under section 51 was available, how it should be exercised in this case [§12].

The second issue related to the Claimant’s application for the costs of the criminal proceedings under section 19 of the Prosecution of Offences Act 1985 and regulation 3 of the Costs in Criminal Cases (General) Regulations 1986 [§14]. This involved considering whether the Court should exercise the power of a District Judge (Magistrates’ Courts) under section 66 of the Courts Act 2003 to make an order for costs inter partes, and if so, whether such an order was appropriate on the facts and how the amount should be determined [§14].

The Parties’ Positions

The Claimant, represented by Adrian Darbishire KC and Stuart Biggs KC, contended that the Murphy principle was wrongly decided per incuriam and should not be followed [§6, 57]. It was submitted that the High Court retained its general discretion under section 51(1) of the Senior Courts Act 1981 to award costs in judicial review proceedings concerning criminal matters, without any requirement for exceptional circumstances [§6]. The Claimant argued that the Court should apply the usual principles under CPR Part 44, with the starting point that the successful party should recover costs from the unsuccessful party [§6-7]. In support, the Claimant relied on authorities such as R v Chief Magistrates, ex parte Osman (1990) Cr App R 313 [§35-41] and R (Chapter 4 Corp Dba Supreme) v the Crown Court at Southwark [2023] EWHC 1362 [§54], which demonstrated a practice of awarding costs under section 51 in criminal matters without reference to the Murphy principle. The Claimant also pointed to numerous other cases, both before and after Murphy, where the High Court had made costs orders in criminal matters applying the conventional approach under section 51 [§42]. For the criminal proceedings costs, the Claimant submitted that the findings in the substantive judgment established that Mr Westhead had engaged in unnecessary or improper acts, warranting an order under section 19 of the 1985 Act, and that the Court should exercise its powers under section 66 of the Courts Act 2003 to make that order rather than remitting it to the magistrates’ court [§7, 105].

The Interested Party, Mr Westhead, resisted both applications [§8]. He did not address the legal principles underpinning the Murphy principle but argued that the costs sought were excessive, highlighting the involvement of two King’s Counsel and multiple solicitors as disproportionate [§8]. He maintained that the private prosecution was in the public interest and that he had been let down by the magistrates’ court and other organisations [§8]. Mr Westhead also stated that he had agreed to the quashing of the summons but not to the reasons or a costs order, and contended he should not be penalised for an error by the District Judge [§8]. He concluded by stating that an adverse costs order would “break [his] spirit to carry on the fight for justice” [§9].

The Advocate to the Court, Mr Paul Jarvis KC, submitted that the Murphy principle was not wrong and should be followed [§11]. He argued that Parliament had enacted separate regimes for civil and criminal costs, and the High Court should only depart from the criminal costs regime in exceptional circumstances [§33]. He relied on subsequent authorities such as R (AB) v Uxbridge Youth Court [2023] EWHC 2951 (Admin) and Morjaria v Westminster Magistrates’ Court [2024] EWHC 178 (Admin), which had affirmed the Murphy principle and emphasised the narrowness of the exception [§29, 33-34]. Mr Jarvis described the rationale as ensuring that “Parliament intended that costs would only be awarded in a criminal cause or matter where such an award is in accordance with the statutory provisions applicable to such causes or matters” [§33].

The Court’s Decision

The Court held that the Murphy principle, as developed in subsequent cases requiring exceptional circumstances before civil costs could be awarded in criminal judicial review proceedings, was wrong and should not be followed [§82, 86-87, 107]. After conducting a detailed analysis of the legislative history and authorities, the Court concluded that the High Court’s power to award costs under section 51(1) of the Senior Courts Act 1981 was not ousted by the criminal costs regime in the Prosecution of Offences Act 1985 [§69-76]. The Court found that sections 18 and 19 of the 1985 Act, which govern inter partes costs orders in the criminal courts, do not apply to the High Court [§75]. There was no need to extend these provisions to the High Court because section 51 already allows for inter partes costs orders to be made in all proceedings before the High Court [§75]. As the Practice Direction (Costs in Criminal Proceedings) 2015 states: “The High Court is not covered by section 18 of the Act but it has complete discretion over all costs between the parties in relation to proceedings before it” [§75].

The Court further held that section 51(5) of the 1981 Act, which provides that nothing in subsection (1) shall alter the practice in any criminal cause, did not preclude the award of costs under the civil regime [§77-81]. The Court found there was no established practice at the time the 1981 Act was passed requiring costs in criminal matters before the High Court to be determined solely under the criminal regime [§78-80]. The decision in Osman demonstrated an established practice of awarding costs pursuant to the High Court’s general discretion in criminal matters [§78]. The Court concluded that the powers under the 1981 Act and the 1985 Act supplemented each other, as stated in Osman [§39, 73].

The Court was critical of how Murphy had developed, noting that the principle “emerged without any real argument, without citation of any relevant authorities and without any detailed reasoning” [§55-56, 82]. Stanley Burnton LJ’s judgment in Murphy stated the principle at paragraph 15 without providing any rationale for it, and paragraph 14 demonstrated it was not based on any authority nor had counsel been able to assist with the criteria to apply [§82]. The Court observed that had Osman been cited in Murphy and subsequent cases, and had courts been provided with the same opportunity to analyse the legislative provisions and full range of authorities, “we do not think that the Murphy principle would have developed in the way that it did” [§86].

The Court concluded: “To the extent that Murphy and subsequent cases have been treated as establishing an exceptionality requirement for making orders under section 51 in criminal matters, we think this is wrong and not to be followed. The High Court’s power to make inter partes orders under section 51 is preserved. That is a discretionary power and the court will decide how the discretion should be exercised in the circumstances of any particular case“ [§87].

Having decided that it had the power to make a costs order, the Court exercised its discretion under section 51 to order that the Interested Party pay the Claimant’s costs of the judicial review proceedings [§95, 98]. The Court applied the general rule under CPR 44.2 that the unsuccessful party should pay the costs of the successful party, noting that Mr Westhead’s conduct—including making a vexatious application, abusing the process of the magistrates’ court, and failing to comply with the duty of candour—justified the order [§93, 95-97]. The Court stated: “Given the findings in the substantive judgment, we see no reason why we should not exercise our discretion to make an order that the Interested Party pays the Claimant’s costs of the judicial review proceedings” [§95]. The Court emphasised: “The need for the judicial review proceedings and the way in which they were conducted arose overwhelmingly out of the conduct of Mr Westhead in seeking to maintain an unsubstantiated private prosecution” [§97].

The costs were to be assessed on the standard basis if not agreed [§99-100]. While recognising Mr Westhead’s misconduct in the criminal proceedings below, the Court considered that his conduct in the High Court—while involving “a dogged insistence on airing his belief that the Claimant was guilty of criminal wrongdoing“—did not cross the line into conduct sufficiently out of the norm to justify assessment on the indemnity basis [§100]. The Court noted its reservations about the scale of the costs claimed for the magistrates’ court proceedings (£235,922.11 including over 400 hours of solicitor time) and observed that the Costs Judge should bear these observations in mind when conducting the assessment of the judicial review costs, as significant additional work before issuing the judicial review claim would not be expected [§101].

For the costs of the criminal proceedings, the Court found that section 19 of the Prosecution of Offences Act 1985 was engaged, as Mr Westhead’s actions constituted an “unnecessary or improper act or omission” within the meaning of the section [§103]. The Court stated: “We consider that the way in which the application in the magistrates’ court was made amounts to ‘unnecessary or improper act or omission’ within the meaning of section 19 of the 1985 Act” [§103]. However, the Court declined to determine the amount of costs under regulation 3 of the 1986 Regulations, instead remitting the application to the magistrates’ court for that purpose [§106]. The Court reasoned: “We consider that determination of the amount of costs which Mr Westhead should be ordered to pay pursuant to the provisions of regulation 3 of the 1986 Regulations would be better dealt with in the magistrates’ court by a District Judge, experienced in dealing with applications for costs in proceedings in that court” [§106]. This approach was taken partly because the Court had not heard full submissions on the quantum, and partly because a District Judge would be better placed to assess the reasonableness of costs claimed for magistrates’ court proceedings [§106].

The Claimant’s undertaking not to seek the additional costs of pursuing the costs arguments was upheld, meaning that the costs of the costs hearing itself would not be recoverable from Mr Westhead [§102]. The Court considered this “an appropriate concession” given that the application involved detailed legal consideration in which Mr Westhead played a limited part, and a separate hearing was required because the Claimant was not in a position to make representations on costs at the original hearing [§102].

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Criminal Legal Aid And The Indemnity Principle | No Escape From Legal Aid Rates In Contempt Proceedings

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Background

The underlying proceedings concerned a contempt application brought by MBR Acres Limited and Others against Ms Gillian McGivern, a solicitor, for alleged breaches of an injunction order dated 10 November 2021. The application was heard before Mr Justice Nicklin on 21 and 22 July 2022, who dismissed it entirely, exonerating Ms McGivern. He awarded her costs on the indemnity basis and certified the application as “totally without merit”, additionally making a civil restraining order against the Respondents.

Ms McGivern had instructed Scott Moncrieff & Associates Ltd (SMA) on approximately 6 July 2022 and secured legal aid for her representation under the criminal legal aid regime, as contempt proceedings are classified as “criminal proceedings” for legal aid purposes under section 14(h) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO). Her application to instruct King’s Counsel (Mr Ashley Underwood KC) under legal aid was refused by Nicklin J, but she proceeded to instruct him privately.

The assessment of Ms McGivern’s costs between the parties came before Costs Judge Whalan in the Senior Courts Costs Office on 4 December 2023. Ms McGivern’s bill totalled £120,292.21. The Respondents had made a Calderbank offer of £21,000 on 12 August 2022 and a Part 36 offer of £33,000 on 5 September 2023.

Following his judgment of 18 July 2024, at a further hearing on 20 November 2024, Costs Judge Whalan assessed the bill at £20,673.34 – significantly below both the claimed amount and the £28,556.58 that the Legal Aid Agency (LAA) had assessed as payable. As this was less than both settlement offers, the Judge ordered Ms McGivern to pay the Respondents’ costs of the assessment proceedings. The Respondents had claimed £80,048.74 for their participation in the assessment and were awarded £53,044.65 (on the standard basis until 26 September 2023, and on an indemnity basis thereafter due to the Part 36 offer).

The net result was that Ms McGivern owed a balance to the Respondents. She appealed to the High Court, where the matter was heard by Mr Justice Sweeting sitting with Senior Costs Judge Rowley as an assessor on 3 July 2025.

Costs Issues Before the Court

The primary issue was whether a party with criminal legal aid defending civil contempt proceedings could recover costs from their opponent at private client rates, or whether recovery was limited to the rates prescribed under the Criminal Legal Aid (Remuneration) Regulations 2013. This raised fundamental questions about the application of the indemnity principle in criminal legal aid cases.

Specifically, the court needed to determine whether the indemnity principle – which prevents a party from recovering more in costs than they are liable to pay their own representatives – was disapplied in criminal legal aid cases. In civil legal aid, Regulation 21 of the Civil Legal Aid (Costs) Regulations 2013 expressly disapplies this principle, allowing costs to be determined “as if that party were not legally aided”. No equivalent provision exists in the criminal legal aid framework.

The court also had to consider whether Ms McGivern could rely on her retainer with SMA, which purportedly provided for a between the parties rate of £400 per hour, and whether she could retrospectively revoke her legal aid to claim at higher rates. Additionally, the court examined whether the LAA’s assessment of costs at a higher figure than ultimately allowed was binding on the costs judge.

A subsidiary issue concerned the recoverability of leading counsel’s fees, which had been privately incurred after the refusal of legal aid funding for King’s Counsel. The appeal also raised an application for a costs capping order in respect of the appeal proceedings.

The Parties’ Positions

Ms McGivern argued that she should recover costs at private client rates, contending that her retainer with SMA provided for £400 per hour. She submitted that preventing recovery at between the parties rates would lead to an absurd result and undermine access to justice. She relied on observations in R (on the application of E) v Governing Body of JFS [2009] UKSC 1 and King’s Lynn and West Norfolk Council v Bunning [2016] EWCA Civ 1037, which emphasised the importance of solicitors being able to recover remuneration at commercial rates when undertaking publicly funded work.

Ms McGivern further argued that paragraph 8.10 of the Criminal Contract Specification authorised providers to retain costs recovered from other parties exceeding LAA payments, and that Regulation 9 of the Criminal Legal Aid (Remuneration) Regulations 2013, which restricts payments from other sources, did not apply to High Court proceedings. She also contended that the LAA’s assessment at £28,556.58 should be treated as the minimum recoverable amount.

Regarding her retainer arrangements, Ms McGivern submitted that she could revoke her legal aid retrospectively and rely on the private retainer to claim higher rates. She argued that if counsel’s fees were refused under legal aid provisions, there was no prohibition against incurring them privately and recovering them at between the parties rates.

The Respondents maintained that the indemnity principle strictly limited recoverable costs to those payable under the legal aid scheme. They emphasised the absence of any provision equivalent to Regulation 21 of the Civil Legal Aid (Costs) Regulations 2013 within the criminal legal aid framework. They relied heavily on Liverpool Victoria Insurance Co Ltd v Khan and others [2022] EWHC B8 (Costs), where Costs Judge Leonard concluded that criminal legal aid does not disapply the indemnity principle.

The Respondents argued that any attempt to claim higher rates through the retainer with SMA constituted an unlawful attempt to “top up” legal aid payments, contrary to section 28 of LASPO. They submitted that paragraph 8.10 of the Criminal Contract Specification could not override statutory provisions, and that the LAA had no discretion to enhance the rates set in Schedule 4 of the Regulations. They characterised the suggestion of retrospectively revoking legal aid as “unprecedented and remarkable” and contrary to the principle in Radford v Frade [2018] EWCA Civ 119.

The Court’s Decision

Mr Justice Sweeting upheld Costs Judge Whalan’s decision, confirming that the indemnity principle applies to criminal legal aid cases without any statutory disapplication. The court found that whilst civil legal aid contains express provisions (Regulation 21) permitting recovery as if the party were not legally aided, no equivalent provision exists in the criminal legal aid framework.

The court rejected Ms McGivern’s argument that Regulation 9’s non-application to the High Court created a general disapplication of the indemnity principle. The judge reasoned that Regulation 9 merely provided specific examples where payments outside standard LAA funding were permitted; its limited scope reinforced rather than undermined the requirement for express legislative provision to disapply the indemnity principle.

Regarding paragraph 8.10 of the Criminal Contract Specification, the court agreed with the reasoning in Khan that whilst this provision authorises retention of costs recovered from other parties exceeding LAA payments, it cannot disapply the indemnity principle. The court emphasised that the indemnity principle is a rule of law requiring primary or secondary legislation for its disapplication, not merely contractual terms between the LAA and providers.

The court acknowledged the policy arguments raised, particularly the Supreme Court’s observations in JFS about the financial sustainability of publicly funded work. However, it distinguished these cases as concerning the court’s general discretion to award costs rather than directly analysing whether the statutory scheme disapplied the indemnity principle in criminal legal aid contexts. The judge stated that the function of courts is to apply the law as enacted by Parliament, not to rewrite it based on perceived policy shortcomings.

On the LAA assessment point, the court endorsed Costs Judge Leonard’s finding in Khan that the LAA “has no discretion to enhance the rates and fees set by paragraph 7(b) of Schedule 4” of the Regulations. Any purported agreement to pay enhanced rates was a matter between solicitors and the LAA with no bearing on amounts recoverable from the paying party.

The proposition that Ms McGivern could retrospectively revoke her legal aid was rejected as “untenable”. The court applied the principle from Radford v Frade that retrospective variation of a receiving party’s costs liability after a costs order cannot increase the paying party’s liability. Such an attempt would breach the statutory prohibition on topping up and be contrary to public policy.

The court refused the application for a costs capping order, finding that the criteria under CPR 3.20(2) were not met. Whilst acknowledging the wider implications for access to justice, the judge determined it would be unjust to require the Respondents to defend a costs order in their favour whilst potentially bearing their own reasonable costs. The court found that summary assessment provided adequate safeguards against disproportionate costs in the appeal.

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In judicial review proceedings, even within a criminal context, the court may exercise its discretion under Section 51 of the Senior Courts Act 1981 to grant costs where there are exceptional circumstances. These exceptional circumstances can include the case being a test case, involving significant legal resources, raising far-reaching issues, and the shifting nature of the prosecution’s position.

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“Beguiling though Mr Buttler’s submissions were, and skilfully made, I reject them. With respect to him, much of his argument was in truth an attempt to challenge the correctness and authority of the Murphy principle. This flew in the face of the decision of the Divisional Court in Bahbahani where arguments similar to some of Mr Buttler’s were considered and rejected and where, in any event, the application of the Murphy principle was affirmed. In my view, the principle is well established.”

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Following a successful private prosecution of his former co-director, resulting in three years of imprisonment, the claimant was awarded payment of his prosecution costs out of central funds. The designated officer allowed him the sum of £150,000 plus VAT as against a total sum of £427.909.66.

The designated officer’s determination was based largely on the disallowance of central London rates on grounds that adequate representation could have been found more locally and the application of a Singh reduction based on a comparator with the notional cost of the case being brought by the CPS.

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