Detailed Assessment Archives

Monthly Costs Law RoundUp | December 2025

Detailed Assessment, Monthly Newsletter, New Costs Blog, New News Article, News & Guidance

Detailed Assessment & Procedure

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

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

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

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

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

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

Judicial Review Costs

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

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

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

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

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

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

Costs Orders & Discretion

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

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

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

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

Multi-Party Litigation & Trust Costs

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

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

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

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

Part 36

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

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

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

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CPR PD 47 Para 8.2 | Costs Judge’s “Hands Tied” By Non-Compliant Points Of Dispute

Counsel Fees, Detailed Assessment, Hourly Rates, New Costs Blog, Points of Dispute & Replies

The Senior Courts Costs Office’s decision in Aareal Bank AG v Lumineau [2025] EWHC 3299 (SCCO) demonstrates the practical consequences of Ainsworth-non-compliant points of dispute and provides guidance on hourly rates above guidelines and leading counsel instruction where prior involvement exists.

Background

This was a detailed assessment of costs before Deputy Costs Judge Lightman, delivered as an approved transcript. The receiving party, Aareal Bank AG, was a third party in the underlying litigation who was awarded its costs by order dated 12 September 2024 [§3]. The underlying proceedings concerned an application by the paying parties to stay a liquidation and bring the company back under their control, with a later change of position seeking the removal of directors [§19, §30]. The proceedings took place over a relatively short but intense period between June and September 2024 [§2]. The detailed assessment concerned a bill of costs submitted by Aareal, against which the paying parties, Emmanuel Lumineau and Thomas Schneider, served points of dispute. The central matters in dispute related to the level of solicitors’ hourly rates, the instruction and fees of leading counsel, and the adequacy of the paying party’s points of dispute.

Costs Issues Before the Court

The court was required to determine three principal costs issues. First, whether the hourly rates claimed by the receiving party’s solicitors were reasonable, given that some exceeded the applicable guideline rates for London 2 (Grade A £398, Grade B £308, Grade C £260, Grade D £148 from 1 January 2024) [§2]. Second, whether it was reasonable and proportionate for the receiving party to have instructed leading counsel for the application and, if so, whether the level of his fees and the work done in conjunction with junior counsel were recoverable. Third, whether the paying party’s points of dispute complied with the requirements of CPR Practice Direction 47, paragraph 8.2, and the consequences of any non-compliance, particularly in light of the Court of Appeal decision in Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178.

The Parties’ Positions

The paying party contended that the solicitors’ hourly rates should be reduced to the SCCO guideline rates for London 2 effective from 1 January 2024. They relied on the principle from Samsung Electronics Co Ltd v LG Display Co Ltd [2022] EWCA Civ 466 that a “clear and compelling justification” is needed to exceed guideline rates [§4]. On counsel’s fees, the paying party argued that instructing counsel at all was unnecessary, as a senior fee earner should have been capable of handling the work [§13]. In the alternative, they submitted that the instruction of leading counsel was an extravagance, relying on the decision in Coram v DR Dunthorn & Son Ltd [2024] EWHC 672 (KB), which the judge noted was a fact-specific decision [§15, §20]. They also challenged numerous specific items of counsel’s work and associated solicitor time.

The receiving party argued that the complexity and importance of the matter, including insolvency issues and urgent interim applications, justified rates above the guidelines [§19]. Regarding counsel, they submitted that the instruction of leading counsel was necessary due to the case’s complexity and his prior involvement in the matter dating back several years before his appointment as KC in 2020 [§11–12, §17]. They defended the concurrent instruction of junior counsel as a proportionate measure to cover whilst leading counsel was on holiday and to assist in the preparation of the skeleton argument [§31, §34]. In response to the points of dispute, the receiving party argued that they failed to comply with CPR PD 47, paragraph 8.2, as interpreted in Ainsworth, because they did not state concisely the nature and grounds of dispute for individual items, instead relying on generic objections [§21–26]. They argued that the points of dispute were non-compliant with PD 47 and should be struck out; however, the judge did not formally strike them out and instead assessed the items within the constraints identified in Ainsworth [§30, §37].

The Court’s Decision

On the issue of solicitors’ hourly rates, the judge acknowledged his general reluctance to depart from the guidelines but found the case to be “unusual” and of sufficient complexity to justify a modest uplift [§8]. He stated that he had “seen enough to say to anyone that this is an unusual case”, warranting a modest departure, without expressly endorsing all aspects of the receiving party’s characterisation of the case’s complexity [§8]. He did not, however, allow the full rates claimed. He reduced a claimed partner rate of £433.50 to £410 (against a guideline of £398) [§9]. For the associate rate claimed at £306, he allowed £275 [§9]. Other rates at or below the guidelines were left undisturbed.

Concerning the instruction of leading counsel, the judge found it was not unreasonable to instruct Mr Fisher, given his significant prior involvement in the matter dating back several years and predating his appointment as KC in 2020 [§11–12, §17]. The judge noted that it was “not unreasonable at all to instruct Mr Fisher, who had previous experience of this case” [§12]. This represents an important distinction from the scenario in Coram, where leading counsel was newly instructed; the judge treated Coram as a fact-specific decision of no direct application [§20]. However, he questioned whether the matter was sufficiently complex to justify leading counsel charging leading counsel’s rates throughout the whole period, stating that he was “not convinced” on this point [§31]. The judge therefore approached the specific items of counsel’s work on the basis that while leading counsel’s involvement was reasonable, his fees should be moderated to reflect a more junior level for much of the work. He reduced a number of leading counsel items on an item-by-item basis, often by reference to a junior counsel rate: item 49 was reduced from £2,550 to £1,125 [§41]; item 51 from £1,195 to £862.50 [§42]; and item 53 to £1,275 [§42]. Items solely relating to junior counsel’s reading in (items 15 and 16) and initial advice (item 17) were allowed in full, as the points of dispute did not adequately challenge them on an item-by-item basis [§37–38].

On the procedural issue, the judge applied the Ainsworth principles. He held that the paying party’s points of dispute, while identifying a general point of principle (satisfying CPR PD 47 para 8.2(a)), failed to “state concisely the nature and grounds of dispute” for individual items as required by CPR PD 47 para 8.2(b) [§23, §29]. The generic objection to counsel’s fees did not specify why each challenged item was unreasonable. The judge’s frustration with the outcome was palpable: he stated that his “hands are tied” and that he “do[es] not like it” [§37]. As a matter of principle, he refused to entertain reductions based on these non-compliant objections for several items, including approximately three hours of solicitors’ attendance at the hearing [§44]. This procedural failure prevented the paying party from advancing item-specific challenges in respect of a number of entries.

The judge noted throughout that proportionality would be addressed separately at the conclusion of the detailed assessment; the determinations in this judgment relate to reasonableness of individual items [§6, §42].

CPR 47 PD 8.2 | Points Of Dispute, Be Specific

Points Of Dispute In Solicitor And Client Assessments | It’s In The Detail

How Relevant Is The SCCO Guide To Hourly Rates?

The Applicability Of The Guideline Hourly Rates On A Detailed Assessment

Supervision, Counsel, Junior Fee Earners, Reading In, Duplication Of Effort And Bill Checking | A Typical Standard Basis Assessment

Brief Fees In Settled Cases

CPR 47.8 | Master Brown Orders Unless Order For Commencement | CPR 47.7 Held To Be Mandatory

Detailed Assessment, New Costs Blog, Payment on Account

The Senior Courts Costs Office’s decision in Awan v Patel & Ors [2025] EWHC 3332 (SCCO) confirms that paying parties can compel receiving parties to commence detailed assessment proceedings even after extreme delay.

Background

The matter before Master Brown was an application dated 27 February 2025 by Mr Sarfaraz Awan, a litigant in person who was described as having been “at one time a litigation solicitor” [§21]. He sought an order requiring the Respondents (the successful Defendants and Counterclaimants in earlier Chancery proceedings) to serve a Notice of Commencement of Detailed Assessment Proceedings and a Bill of Costs. This application related to a costs order made nearly eight years prior, on 20 October 2017 [§2] (noting an apparent typographical error at §8 which states ‘2018’), by Sir John Baldwin QC sitting as a deputy High Court judge. That order provided that Mr Awan and his wife were jointly and severally liable to pay the Respondents’ costs of the claim, counterclaim, and additional claim, on the standard basis, to be assessed if not agreed [§8]. A significant feature was paragraph 3 of the same order, which directed Mr and Mrs Awan to pay £118,800 on account of those costs by 10 November 2017 [§10].

The on-account sum was not paid and subsequently became a judgment debt. The Respondents took steps to enforce it. On 3 February 2019, Chief Master Marsh granted a final Charging Order over Mr Awan’s property [§11]. Later, on 7 March 2024, Master Kaye made a conditional order for sale of the property [§12]. Mr Awan and his wife sought to appeal Master Kaye’s decision, arguing that an interim payment on account of costs was not an enforceable order. Permission to appeal was refused by Fancourt J on 19 July 2024 [§13], and a subsequent application to the Court of Appeal was also rejected by Lewison LJ [§14]. Throughout this period, the Respondents had not commenced detailed assessment proceedings to have their full costs quantified.

Separately, Mr Awan had also made an application to stay execution of the order for sale. Master Brown transferred that application back to the Chancery Division (to Deputy Master Teverson) to be heard alongside an existing application there [§6]. Deputy Master Teverson subsequently stayed execution pending the outcome of the costs application before Master Brown.

Costs Issues Before the Court

The core issue for determination was whether the court should grant Mr Awan’s application and order the Respondents to commence detailed assessment proceedings [§2]. This raised several interrelated legal questions. First, whether CPR 47.7 imposes a mandatory obligation on a receiving party to commence detailed assessment within three months of a costs order, or whether it is merely an option [§30]. Second, if it is an obligation, whether the court has a discretion under CPR 47.8(1) to refuse an application by a paying party to compel commencement, and if so, how that discretion should be exercised [§40–46]. Third, whether the very substantial delay (almost eight years) and the applicant’s alleged motive to frustrate enforcement constituted an abuse of process or other reason to refuse the application [§63–83].

The Parties’ Positions

Mr Awan, acting in person, argued that CPR 47.7 used the word “must”, which created a clear obligation on the Respondents to commence detailed assessment within three months [§18, §22]. He submitted that the order for an interim payment was made on account of costs to be assessed or agreed. In the absence of agreement, there had to be an assessment to determine the final sum payable [§22]. He contended that the Respondents’ failure to serve a bill meant there had been no final determination of costs as envisaged by the original order.

The Respondents, represented by Mr David Zachary Lipson of counsel, opposed the application. Their position was that there was no obligation to commence detailed assessment; it was an option [§25]. They argued they could choose to rely solely on the enforceable interim payment order without progressing to a full assessment. Mr Lipson submitted that the application was a tactical attempt to stall enforcement of the judgment debt, which with interest stood at approximately £201,243.64 as at 3 September [§23]. He contended that the court had a broad discretion under CPR 47.8(1) and should refuse the order [§28]. He cited the substantial costs and practical difficulties of preparing a bill after so many years, the history of enforcement problems, and the applicant’s own delay in making the application as reasons to exercise discretion against compelling assessment [§26–28].

The Court’s Decision

Master Brown granted the application and ordered the Respondents to commence detailed assessment proceedings [§85]. His reasoning addressed each key issue in turn.

On the first issue, he held decisively that CPR 47.7 imposes a mandatory obligation, not an option [§31]. The use of the word “must” was conclusive and “plainly… inconsistent with this step being optional” [§31]. This interpretation was supported by the language of CPR 47.8, which refers to a party who “fails to commence”, implying a breach of an obligation: “The word ‘fails’ connotes to my mind an obligation to commence. There must be an obligation to do so because it is only if there is obligation to do so could there be a ‘failure’” [§34]. The judge also referenced the Court of Appeal’s comments in Haji-Ioannou v Frangos [2006] EWCA Civ 1663, which treated delay in commencement as a failure to comply with a rule [§35–37]. He noted that general practice was inconsistent with the notion that commencement was optional [§38]. The Respondents were therefore in breach of the rules for not serving a bill within three months of the October 2017 order [§39].

On the second issue, Master Brown accepted that CPR 47.8(1) likely conferred some discretion on the court not to make an order, as it stated the paying party “may apply” and did not say the court “must” order commencement [§43]. However, he found this was not a general discretion to be exercised freely [§44]. The provision’s purpose was to compel a party in breach to comply and bring the costs claim to a conclusion within a reasonable time [§46]. Any discretion had to be exercised with that purpose in mind and required a good reason to refuse an application [§44].

The judge then considered how to exercise any discretion. He found compelling reasons to order assessment. The interim payment order was made on account of costs to be assessed; its very nature assumed an assessment would follow [§47–48]. Refusing the application would, in effect, convert an interim order into a final one: “I put it to Mr Lipson, not meaning to be pejorative, that in effect he was seeking to convert what is an interim on account order to a final order. And I am not persuaded by him that I have the ability to do that by the terms of the rules” [§49]. The alleged burdens on the Respondents (cost of preparing a bill, assessment fees) were not disproportionate [§56–57], especially as they could limit their bill to the £118,800 already ordered if they wished [§59]. The fact their costs were secured by a charging order placed them in a more advantageous position than many receiving parties [§58]. Master Brown concluded that the factors raised by the Respondents were insufficient to outweigh the applicant’s entitlement to see a bill and have costs assessed [§60–61].

On the third issue, concerning delay and abuse, the judge was not persuaded [§65]. He noted that the CPR 47 scheme provided its own sanctions for delay (primarily disallowance of interest) and was designed to minimise satellite litigation, appearing to be “a self contained scheme dealing with delay, with prescribed sanctions” [§66]. While inordinate delay could theoretically reach a point where assessment was unfair, that point had not been reached here [§67]. Assessment of costs for old work was not unusual — the court in Michael Wilson & Partners Ltd v Emmott [2025] EWHC 747 (Comm) dealt with a 12-year delay [§69]. The case would likely be decided on documents like invoices and attendance notes, not witness recollection [§70]. The judge found no evidence that a fair assessment was now impossible. He also did not accept that Mr Awan’s delay in making the application was contumelious or abusive [§71, §76]. Even if an ulterior motive to delay enforcement was suspected, the application remained objectively justifiable as a paying party is ordinarily entitled to a bill and assessment [§79, §83].

Consequently, Master Brown made an order requiring the Respondents to serve a Notice of Commencement and Bill of Costs, stating: “I do not see any reason why I should not make an Unless Order with, say, three/three and a half months to prepare the Bill” [§87]. He declined to deal with associated applications for disallowance of costs or interest at this hearing, noting those could be addressed later in the assessment process [§88, §90].

Sanction for delay in commencing detailed assessment proceedings

CPR 44.2(8) | Payments On Account In Civil Litigation

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

Commencement of detailed assessment proceedings: Earliest time for commencement

Applications in detailed assessment proceedings: Examples of the types of applications which may be made

Costs of detailed assessment proceedings: Entitlement

Solicitor Firm Debarred From Detailed Assessment For Failing To Disclose WhatsApp Communications

Detailed Assessment, New Costs Blog, Solicitor & Client Costs

The Senior Courts Costs Office’s decision in MacInnes & Anor v DWF Law LLP [2025] EWHC 3252 (SCCO) establishes that the scope of a disclosure order for a solicitor’s “complete files” is defined by what the client was charged for, not by the firm’s internal document management practices.

Background

This matter concerned an application within detailed assessment proceedings brought under the Solicitors Act 1974 by the clients, Mr and Mrs MacInnes, against their former solicitors, DWF Law LLP. The substantive assessment related to invoices rendered by DWF for its work on an arbitration for the claimants.

On 4 September 2024, following a directions hearing, an order was made which included, at paragraph 4.4, a requirement for the Defendant to provide the claimants with “a complete digital copy of the Defendant’s files in connection with the instructions described upon the Amended Invoices” [§89]. The purpose was to enable the claimants to consider the reasonableness of the costs and, more fundamentally, to identify what work had been charged. The Defendant failed to comply with this order by the stipulated deadline.

Consequently, on 22 April 2025, the court made an unless order. It provided that unless the Defendant complied with paragraph 4.4 of the September order by 4pm on 20 May 2025, it would be debarred from participating further in the detailed assessment hearing, save for the purpose of giving evidence on any preliminary issues [§1]. On 20 May 2025, the Defendant filed an assertion that it had fully complied [§2]. The claimants disagreed and applied for a declaration that the sanction in the unless order had been triggered. In response, the Defendant made a precautionary application for relief from sanctions, to be pursued only if the court found it to be in default [§4].

Costs Issues Before the Court

The primary issue for determination was whether the Defendant had complied with the disclosure obligations under the unless order of 22 April 2025, and therefore whether the sanction of debarment was engaged. This turned on the interpretation of what constituted the Defendant’s “complete files” for disclosure.

The specific points of contention were:

- - Whether communications sent via WhatsApp and similar instant messaging platforms, for which the claimants may have been charged, formed part of the solicitor’s “file” and thus fell within the scope of the disclosure order.
  - Relatedly, whether the Defendant’s failure to search for and disclose such messages amounted to a breach of the order.
  - The significant discrepancy between the number of emails claimed for in the costs breakdown (2,758 from one fee earner alone) and the number actually disclosed (1,335), raising a serious concern that the disclosure exercise may have been incomplete [§165-167].

The resolution of these issues would determine the procedural status of the Defendant in the ongoing detailed assessment and preliminary issues hearing.

The Parties’ Positions

The Claimants’ Position: The claimants, represented by Nicholas Bacon KC, argued there had been a clear breach. They submitted that the order for a “complete digital copy” of the files encompassed all forms of communication relating to the billed instructions, irrespective of the platform used. They pointed to entries in the Defendant’s ledger which they argued showed charges being raised for work involving WhatsApp messages [§71-74]. The claimants contended that the Defendant’s internal policy or lack thereof—choosing not to save WhatsApp messages to its case management system—did not absolve it from the obligation to disclose them if they related to charged work. The failure to even attempt to contact former fee earners to retrieve such messages demonstrated non-compliance [§6, §134-135]. The claimants also highlighted the discrepancy in email numbers as evidence that the disclosure exercise was incomplete [§34-35].

The Defendant’s Position: The Defendant, represented by Robin Dunne, maintained it had complied. It argued that the content of its “file” was a matter for it to define, and its position was that WhatsApp messages did not form part of it [§70]. The Defendant pointed to the practical difficulties of extracting such messages from personal or company mobile devices, especially from staff who had left the firm, and cited privacy concerns [§53-56]. It argued that any WhatsApp communications would have been short, administrative messages not containing substantive advice, and that the claimants likely already possessed messages sent to them directly [§127, §143-144]. The Defendant characterised the claimants’ application as an impermissible attempt to obtain specific disclosure through the “back door” of an unless order, bypassing the proper procedure under CPR Part 31 [§43, §63-64]. It relied on the witness evidence of its partner, Joel Heap, who stated the firm believed such messages were not part of the file and that a thorough search for disclosable documents had been conducted [§44, §126-127].

The Court’s Decision

Costs Judge Nagalingam granted the claimants’ application, declaring that the Defendant was in breach of the unless order [§195]. The sanction was therefore engaged, subject to a correction under the slip rule.

The court’s analysis focused on the proper interpretation of the disclosure order. The judge rejected the Defendant’s narrow definition of its “file” as being limited to documents saved on its Digital Case Management System (DMS). The order required a copy of the Defendant’s “complete files in connection with the instructions” [§89, §92-93]. The judge held that the defining criterion was not the medium of communication, but whether the client had been charged for the work in question. If a communication, whether by letter, email, WhatsApp, or any other platform, had generated a charge on the amended invoices, then it necessarily formed part of the file for disclosure purposes [§101].

Crucially, the judge made clear that this was not a decision that WhatsApp messages form part of a solicitor’s file as a matter of course. Rather, it was a decision which reflects that “regardless of the medium or platform used, if a charge is raised to the client then the related communication forms part of the file” [§102].

The judge concluded, on the available evidence, that the ledger demonstrated charges being raised for WhatsApp communications. Upon analysing the ledger, and distinguishing between time spent reviewing WhatsApp evidence in the underlying arbitration and time spent on WhatsApp communications with the client, the judge identified entries dated 03/08/2020, 09/11/2020, 16/11/2020, 01/02/2021, 10/11/2021 and 17/12/2022 that implied charges were raised for the latter [§159-160]. The absence of a witness statement from the author of the costs breakdown, who could have clarified this, counted against the Defendant [§162-163].

The court was unpersuaded by the Defendant’s reliance on privacy and practical difficulty arguments. It noted the Solicitors Regulation Authority’s (SRA) thematic review of asylum legal services dated 30 July 2024, which emphasised the need for firms to have policies on using messaging apps and to ensure relevant communications are saved to the client file [§110-116]. The Defendant’s lack of such a policy and its failure to even ask former staff for relevant messages undermined its position [§134, §176].

The judge also expressed serious concern over the discrepancy in email numbers, noting that one has to at least entertain the possibility that the missing emails are in fact routine digital messages sent via other means [§142, §169-170]. This further indicated the disclosure may have been incomplete.

In conclusion, the judge found the Defendant had failed to disclose all documents relating to matters for which the claimants were charged, and was therefore in breach of the unless order [§195]. The sanction of debarment was activated. However, applying the slip rule under CPR 40.12 [§196], the judge amended the sanction clause. The original order debarred participation “save for the purpose of giving evidence on any preliminary issues”. The judge corrected this to “save for the purpose of any preliminary issues hearing in which evidence might otherwise be heard”, accurately reflecting the ex tempore judgment [§206-207]. Consequently, the Defendant is debarred from the main detailed assessment but may participate in the listed preliminary issues hearing in February 2026 [§208].

The costs of the application were reserved, as elements of it remained part-heard [§197]. The parties were given directions to confirm whether they would pursue the remaining parts of the claimants’ application and the Defendant’s relief from sanctions application [§198-200].

Solicitor and client assessments: Introduction

Court Declines To Bifurcate Solicitors Act Assessment

Unless Orders In Respect Of Outstanding Costs Orders | Can’t Pay Or Won’t Pay?

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

Orders: The slip rule

Points Of Dispute In Solicitor And Client Assessments | It’s In The Detail

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

Detailed Assessment, Indemnity Costs, New Costs Blog, Part 36

The County Court’s decision in Barry v Essex County Council [2025] EWCC 64 confirms that enhanced interest on costs awarded under CPR 36.17(4)(c) is calculated using the aggregate costs method from the date of offer expiry. This is of course a first instance non-binding decision in the county court and should be treated accordingly.

Background

The claimant, Kelly Barry, brought a claim for damages against Essex County Council for personal injuries sustained in a tripping accident on 18th March 2018. Liability was denied by the defendant. On 7th October 2019, the claimant made a Part 36 offer to settle liability on a 70/30 basis in her favour, which was rejected. The offer expired on 28th October 2019. The matter proceeded to a trial on 5th and 6th July 2023 before District Judge Mills (as he then was). Quantum was partly agreed at £27,031, subject to liability. The trial judge found wholly in the claimant’s favour on liability, making no deduction for contributory negligence, and entered judgment for the agreed sum of £27,031.

As the claimant had beaten her own Part 36 offer, the judge applied the consequences under CPR 36.17(4). He awarded an additional 10% of the damages (£2,703.10) and enhanced interest on those damages at 9% per annum from 28th October 2019 to the first day of trial, amounting to £8,971.33. Regarding costs, the judge ordered that the defendant pay the claimant’s costs up to 28th October 2019 on the standard basis, and costs from that date on the indemnity basis. Crucially, he also ordered, pursuant to CPR 36.17(4)(c), that the defendant pay “additional interest on those costs… from 28th October 2019 at the rate of 9% per annum.”

A Bill of Costs was subsequently served totalling £91,173.92. The parties later agreed the base costs at £75,000, excluding interest and the costs of the assessment. A dispute arose solely concerning the method for calculating the interest on the post-offer indemnity costs, leading the claimant to issue an application on 25th April 2025 to resolve the issue.

Costs Issues Before the Court

The single issue for determination was the correct method for calculating interest on costs awarded under CPR 36.17(4)(c). The claimant argued for the “Aggregate Costs method,” whereby interest at 9% per annum is applied to the total sum of all costs incurred from the expiry of the Part 36 offer (28th October 2019) until the date of the costs order (6th July 2023). The defendant contended for the “Individual Item method,” whereby interest is calculated separately on each individual item of costs incurred after the offer’s expiry, running from the specific date that item of work was done or the disbursement was incurred.

The Parties’ Positions

Claimant’s Submissions: Mr Meehan, for the claimant, advanced two primary arguments. Firstly, he submitted that on a natural reading of District Judge Mills’s order, the only reasonable construction was that it intended the Aggregate Costs method. His second, alternative argument was that if the interpretation remained open, the Aggregate Costs method was consistent with case law, the policy behind CPR Part 36, and practical reality. He argued that the Court of Appeal’s decision in McPhilemy v Times Newspapers Ltd, upon which the defendant relied, was not binding. He relied on the subsequent case of OMV Petrom SA v Glencore International AG, which indicated that the policy behind Part 36 had evolved to include a non-compensatory, punitive element designed to encourage settlement—a “carrot and stick” scheme. He further argued that the Individual Item method was practically unworkable, creating unnecessary complexity for costs judges.

Defendant’s Submissions: Mr Roderick, for the defendant, clarified that the Individual Item method involved recalculating the interest due each time a new cost was incurred post-offer. He contended that this method was consistent with the precedent in McPhilemy, which he submitted was binding, where the Court of Appeal had expressly ordered that interest run from the date work was done. He accepted that Part 36 now had a punitive element but argued that this was delivered through the enhanced rate of interest itself, not the method of calculation. He submitted that the Aggregate Costs method could lead to absurd outcomes, such as interest running on a counsel’s brief fee for some three years before it was actually incurred. He argued for consistency with the principle that interest on damages typically runs from the date the loss was incurred. Finally, he asserted that the Individual Item method was practical and straightforward to operate using spreadsheets and electronic bills.

The Court’s Decision

Deputy District Judge Rathod found in favour of the claimant, holding that the Aggregate Costs method was the correct approach. The decision was reached for several key reasons.

- - First, on a straightforward construction of District Judge Mills’s order, the judge found that the wording indicated a clear intention to apply interest at 9% per annum to the entirety of the post-offer costs from a single specified date. This aligned with the “broad brush” approach to interest on costs endorsed by Lord Neuberger in Simcoe v Jacuzzi UK Group plc, which discouraged overly detailed and prolonged arguments on such points.
  - Second, the judge held that he was not bound to follow the specific outcome in McPhilemy. He analysed that the ratio of McPhilemy concerned the trial judge’s erroneous exercise of discretion in refusing Part 36 consequences, not the precise mechanics of interest calculation. The specific order made in that case was a product of its own facts and was not an issue that had been fully argued. Furthermore, the judge found McPhilemy to be of limited persuasive authority as it pre-dated the Jackson reforms, which introduced a stronger “carrot and stick” policy into Part 36, and its reasoning was based on compensating a claimant for loss of use of money paid on account—a factor not present in this case where a conditional fee agreement was used.
  - Third, the Court of Appeal’s decision in Petrom was found to dilute the authority of McPhilemy. The judge noted that in Petrom, the Chancellor held that enhanced interest awards under Part 36 were not purely compensatory and could include a non-compensatory element. This shift in policy supported an interpretation that could lead to a more punitive result for a defendant who rejected a reasonable offer.
  - Fourth, the judge rejected the defendant’s argument that the Aggregate Costs method produced an “absurd” result by potentially accruing interest on costs before they were incurred. He stated that if this was the outcome of a rule designed to encourage settlement, it was a fair consequence for a defendant who chose not to accept an offer. He also found the defendant’s analogy with interest on damages to be a false one, noting that in personal injury cases, a simple half-rate from the date of accident is often used to avoid complexity.

Finally, the judge agreed with the claimant that the Individual Item method was unworkable in practice. It would add significant complexity to detailed assessments and, crucially, would be impossible to apply in cases involving summary assessment of costs, where individual dates of incurrence are not examined. The Aggregate Costs method, in contrast, was consistent with authority, the policy of Part 36, and practical reality.

The application was therefore allowed, and it was declared that interest should be calculated at 9% per annum on the aggregate of all costs incurred from 28th October 2019 to 6th July 2023.

Part 36 Consequentials | Enhanced Interest, Indemnity Costs And 100% Payment On Account

CPR 36.17(4) | Does It Apply To The Costs Of Detailed Assessment?

CPR 44.2(6)(g) | Pre Judgment Interest On Costs Under | A General Rule?

The Correct Approach To Summary Assessment | Guideline Hourly Rates Up By 35%?

CPR 44.2(8) | Payments On Account In Costs Budgeted Cases

Part 36 Consequences In Detailed Assessment | De Minimis Form Errors Will Not Invalidate Offers

Detailed Assessment, Indemnity Costs, New Costs Blog, Part 36

The Senior Courts Costs Office’s decision in Stockler and Another v The Corporation of the Hall of Arts and Sciences [2025] EWHC 3080 (SCCO) confirms that de minimis errors in Part 36 offer forms will not prevent the full statutory consequences applying in detailed assessment proceedings.

Background

The claimants, William Thomas Stockler and Alexander Charles Stockler, are holders of rights to permanent seats in the Royal Albert Hall. The defendant is the corporation which holds a long lease of the Hall. Following underlying litigation, a costs order was made in the defendant’s favour.

The detailed assessment involved hearings on 23-24 June 2025 and 28-29 August 2025 before Deputy Costs Judge Joseph. At the outset, the judge disclosed he had sung in concerts at the Hall as a member of the City of Birmingham Symphony Orchestra Chorus; both parties confirmed this was not a basis for recusal. On the second day of the June hearing, however, the claimants applied for recusal alleging that positive comments about the Hall demonstrated inappropriate influence. The application was dismissed as totally without merit [§7].

Between hearings, the claimants amended their Points of Dispute. At the August hearing, the court disallowed all amendments pursuant to CPR PD 47 paragraph 13(10), finding it unfair and too late to permit them [§13]. The line-by-line assessment was completed on 29 August. The defendant presented a calculation of £120,513.88; the claimants did not challenge the figure and were held to have accepted it by proceeding on the basis they “assumed” it was correct [§14, §34-36]. The court later corrected this to £120,221.98 using CPR 3.1(7) after identifying an inadvertent error that would otherwise have breached the indemnity principle [§39-41].

A separate judgment dated 5 September 2025 [2025] EWHC 2262 (SCCO), which reported on here, addressed proportionality; no further reduction was warranted [§2].

The present judgment deals with the remaining consequential issues.

Costs Issues Before the Court

The court was required to determine four issues [§18]: interest payable on the assessed costs; whether the costs of the detailed assessment should be paid on the indemnity basis (due to a Part 36 offer or unreasonable conduct); the quantum of those costs; and permission to appeal.

The Parties’ Positions

The defendant sought indemnity costs on two grounds [§45]. First, a Part 36 offer dated 29 October 2024 to accept £115,000 inclusive of interest [§46]. The relevant period expired on 19 November 2024 without acceptance. As the assessed costs exceeded the offer, the defendant argued CPR 36.17, as modified by CPR 47.20(4), applied [§47]. Second, unreasonable conduct including pursuing unmeritorious Points of Dispute, failing to engage with ADR, and the opportunistic recusal application [§52].

The claimants argued the Part 36 offer was invalid due to a clerical error on form N242A, where it was misdescribed as a “claimant’s offer” despite the defendant being the receiving party [§54]. They contended it would be unjust to apply Part 36 consequences because their failure to beat the offer resulted from the court’s Ainsworth rulings and disallowance of amendments [§55]. On conduct, they submitted their behaviour did not take the case “out of the norm” per Excelsior v Salisbury Hammer Aspden [2002] EWCA Civ 879 [§56].

The Court’s Decision

The court held the Part 36 offer was valid [§60]. Applying F&C Alternative Investments (Holdings) Ltd v Barthelemy (No 3) [2012] EWCA Civ 843, the error was de minimis, falling into the class of “obvious slips which mislead no-one” [§57]. The offer was clear, made shortly after Replies were served, and provided sufficient information for evaluation [§62].

The court rejected the argument that Part 36 consequences would be unjust. If Ainsworth rulings and similar matters made it unjust, “it would be unjust in almost every detailed assessment to order them. That cannot have been the intention of the Rules Committee” [§61].

Consequently, the defendant was awarded costs on the standard basis until 19 November 2024 and on the indemnity basis thereafter [§63]. Interest on the assessed costs of £120,221.98 was awarded at 8% per annum from 1 July 2024 to 18 November 2024, and at 14% per annum thereafter [§65]. An additional sum of £12,022.20 was awarded under CPR 36.17(4)(d) [§65].

Conduct-Based Indemnity Costs

Separately from Part 36, the court analysed whether conduct justified indemnity costs [§67]. The defendant’s costs schedule only included costs from 27 August 2024 onwards, after expiry of its Calderbank offer [§53]. Conduct prior to the hearing did not sufficiently take the case out of the norm, but conduct from 23 June 2025 was “unreasonable to a high degree” and did take it out of the norm [§86]. This included:

- - The recusal application, found to be “entirely opportunistic and made not as a result of any genuine concern about the bias or apparent bias of the judge, but in an inappropriate attempt to circumvent or to cause to be revisited certain decisions” [§81]
  - Fixed costs arguments that “could not possibly have had any application to the matter” [§70]
  - Amendments to Points of Dispute seeking “another bite at a cherry which had already been swallowed”, with the claimants “oblivious to the self-evident prejudice” to the defendant [§83]

This was largely subsumed by the Part 36 consequences [§86].

Quantum of Costs

The court summarily assessed the defendant’s costs of the detailed assessment [§87]. From the claimed £105,092.89, reductions were made: £2,500 for document work and £750 for other costs (reflecting proportionality on the standard basis element), and £3,000 for duplication between fee earners [§93-95]. Counsel’s fees were adjusted to £16,500 for June and £12,500 for August [§96-97]. The final award was £98,542.89 [§99].

Permission to Appeal

Permission was refused on all ten grounds [§113]. The recusal allegations fell “way short of anything which could possibly have justified such an application” under Porter v Magill [2001] UKHL 67 [§102]. Decisions on fixed costs, amendments, and proportionality were within the court’s discretion [§106-112].

CPR 36.17(4) | Does It Apply To The Costs Of Detailed Assessment?

Part 36 Offer | Service By Email Validated But Not Without Consequence

Indemnity Costs And The High Risk Of Pursuing A Weak Case

Indemnity Basis Costs Following Discontinuance

An Interest Exclusive Part 36 Offer Is Not A Part 36 Offer

Costs Thrown Away, Indemnity Costs And Payments On Account

SCCO Rules That Solicitors Act Proceedings Qualify As “Claims” For CPR 25.26 Purposes But Dismisses Security Application On The Facts

Detailed Assessment, New Costs Blog, Security for Costs, Solicitor & Client Costs

The Senior Courts Costs Office’s decision in Pickering v Thomas Mansfield Solicitors Limited [2025] EWHC 3021 (SCCO) confirms that security for costs applications are procedurally permissible in Solicitors Act assessment proceedings and applies CPR 25.27(b)(vi) to conclude that mortgage repayments and property investments did not constitute putting assets beyond reach.

Background

The matter concerned an application by Thomas Mansfield Solicitors Limited (TM) dated 25 September 2025 for security for costs in the sum of £150,000 against Lisa Pickering (LP). The application arose within detailed assessment proceedings under the Solicitors Act 1974, where TM’s invoices totalling £2,533,579.14 were subject to assessment. TM had already received payments on account amounting to £1,175,849.50. [§8]

A previous order dated 9 April 2025 had required LP to make a payment on account of £276,000 in instalments. LP had initially failed to comply with that order, leading to an unless order. However, she had since complied with the instalment schedule, and at the time of the hearing was not in breach. The final instalment was due by 4 November 2025. [§9-11]

The detailed assessment hearing was scheduled to commence on 25 November 2025, with preliminary issues to be determined, followed by further hearing days in January 2026. The application for security for costs was made approximately two months before the detailed assessment was due to begin, despite the notice of detailed assessment hearing having been issued on 15 April 2025. [§5-7]

Costs Issues Before the Court

The court was required to determine TM’s application for security for costs, which was brought under CPR 25.27(b)(vi), and alternatively under CPR 3.1(3)(a) & (b), CPR 3.1(5)(a) and (b), and CPR 25.21(2). [§4]

The primary issue was whether LP had taken steps in relation to her assets that would make it difficult to enforce an order for costs against her, pursuant to CPR 25.27(b)(vi). [§51, §61]

A threshold procedural issue arose as to whether the application was permissible in Solicitors Act proceedings at all, given that such proceedings are initiated by a client’s statutory application for assessment under Section 70 of the Solicitors Act 1974 rather than by traditional claim form. This raised the question of whether they constitute a “claim” for CPR 25.26 purposes. [§32-37]

Additional issues included whether the court should exercise its general case management powers under CPR 3.1 to impose conditions or order a payment into court, and whether an automatic sanction for non-compliance should be attached. [§15-22]

The Parties’ Positions

TM’s Position

TM argued that security for costs was justified under CPR 25.27(b)(vi) because LP had taken steps in relation to her assets that would make enforcement of a costs order difficult. They pointed to LP’s voluntary financial disclosures, which showed she had realised approximately £1.8 million from the sale of gold bars, coins, and jewellery between February 2023 and July 2025. TM highlighted that LP had used £650,000 of these funds to repay alleged debts, pay off mortgages early, purchase a bed and breakfast property for her son, and make other expenditures, without setting aside funds for her liability to TM. [§53-54]

TM submitted that these actions amounted to a dissipation of assets and sought to rely on Keary to support drawing adverse inferences from LP’s financial disclosures. They also contended that the court should use its powers under CPR 3.1 to order a payment into court with an automatic sanction for non-compliance. [§55, §62, §15-18]

LP’s Position

LP opposed the application on multiple grounds. Firstly, she argued that Solicitors Act proceedings did not constitute a “claim” for the purpose of an application for security for costs under CPR 25.26. [§33]

On the substantive issue, LP maintained that her financial transactions did not meet the threshold under CPR 25.27(b)(vi), as she had not taken steps to put assets beyond TM’s reach. LP explained that her actions, such as paying down mortgages on properties like Westholme Farm and Hopewell House, were legitimate financial management that increased equity in enforceable assets. Similarly, the purchase of a bed and breakfast for her son and the repayment of a £215,000 loan to Yorkshire Metal Recycling were investments or debt reductions that did not dissipate assets. [§63-81]

LP noted that TM had not used procedural mechanisms such as Part 18 requests or specific disclosure applications that were available to obtain further financial information from LP. She emphasised that she had never claimed impecuniosity and therefore bore no burden to prove her financial position. [§46-47, §58-59]

LP also criticised TM’s estimated costs of assessment of £400,000 as excessive and unjustified. [§97]

The Court’s Decision

The court dismissed TM’s application for security for costs. [§100]

The Jurisdictional Point

On the threshold procedural point, the court held that Solicitors Act proceedings, though initiated via a Part 8 application under Section 70 of the Solicitors Act 1974, qualified as a “claim” for the purposes of CPR 25.26. [§39-41]

Costs Judge Nagalingam reasoned that whilst a client’s application for assessment is not a claim in the traditional sense, the “case in question” is the Solicitors Act proceedings as a whole, in which the solicitor is defending a challenge to their fees. The court noted that the word “claim” is not defined in CPR 25.26, but the White Book editorial guidance indicates it “usually refers to the whole of the case in question.” [§38]

The court concluded that whilst such applications are unusual and seldom invoked, this did not render them procedurally barred. The court held that CPR 25.26 is permissive and that, on balance, TM had a right to make the application. [§40-44]

CPR 25.27(b)(vi) | The Asset Dissipation Test

The court found that TM had not satisfied the condition under CPR 25.27(b)(vi), which requires proof that “the claimant has taken steps in relation to their assets that would make it difficult to enforce an order for costs against them.” [§87, §94]

The court emphasised the critical distinction between asset dissipation and asset preservation or conversion. LP’s steps in relation to her assets—including selling gold and jewellery, paying off mortgages, investing in property, and repaying debts—did not make it difficult to enforce a costs order. Instead, these actions converted liquid funds into other enforceable assets, such as unencumbered properties, which remained available for realisation. [§87-90]

Specifically, the court found:

- - Mortgage repayments: Paying down mortgages on Westholme Farm (to achieve a mortgage-free property) and Hopewell House (reducing encumbrances) converted liquid funds into increased equity. The court held that “taking steps to make one asset (Westholme Farm) mortgage free, and another (Hopewell House) a nearly unencumbered property, arguably amounts to the taking of steps which makes it easier to enforce an order for costs.” [§64-67, §70]
  - Property investment: The purchase of a bed and breakfast property, which LP’s son intended to use to run a business, represented a conversion of funds into property rather than dissipation. The court observed that “that is still an asset which is available to be enforced against,” though the precise ownership structure and enforcement mechanisms were not examined. [§68, §91]
  - Loan repayment: The £215,000 repayment to Yorkshire Metal Recycling (LP’s brother’s company) was explained by evidence that Yorkshire Metal Recycling had earlier advanced £285,000 to fund LP’s case by making direct payments to TM. This arrangement was secured by an undertaking drafted by TM themselves, requiring that TM’s fees take priority over repayment to Yorkshire Metal Recycling from proceeds of the sale of Edlington Wood. The court accepted that the net effect of the repayment “must be that more of the proceeds of the sale of Edlington Wood may be redirected to paying off any further costs orders achieved in TM’s favour.” The court concluded “it cannot reasonably be described as a dissipation of funds.” [§76-81]
  - Car purchase: The net expenditure of approximately £17,000 to replace one depreciating asset (a car sold for £15,500) with another (purchased for £31,995) was “not a dissipation of funds but conversion to an asset that may be sold if necessary to meet any later order for costs.” [§71-72]
  - Gold and jewellery sales: The court found that LP’s evidence showed “a trail of payments coming her way as a consequence of her selling ‘investment gold and jewellery,'” and TM had not explained “how the sale of those assets make it difficult for TM to enforce an order for costs against LP.” [§74-75]

The court noted that LP retained substantial assets, including multiple properties (Westholme Farm, Hopewell House, The Barn, a 50% interest in Edlington Wood, a 50% interest in Pondfield House, and the bed and breakfast property). Based on TM’s own analysis of the figures, substantial liquid funds remained available to LP, which the court observed “may be in excess of £1m even after the various payments out,” though no precise quantum was determined. None of these assets had been put beyond TM’s reach. [§82-83, §90-91]

Evidential Burden

The court held that the evidential burden under CPR 25.26(2) rested squarely on TM as the applicant. LP was not claiming impecuniosity and therefore bore no obligation to prove her ability to pay. The court stated: “LP has never claimed impecuniosity and as such is under no obligation to make the type of financial disclosures TM appears to be expecting.” [§45-47, §58-62]

The court noted that TM had not used procedural mechanisms such as Part 18 requests or specific disclosure applications that were available to obtain further financial information from LP. [§59, §85]

The court held that Keary was not relevant to the application because that case concerned a claimant claiming insufficient funds to provide security, whereas LP had made no such claim. The court stated: “I reject that the burden is on LP. That burden only arises where she is claiming ‘insufficient funds to provide the security.'” [§62]

Alternative Grounds

The court also rejected TM’s reliance on alternative CPR provisions:

CPR 3.1(3): Whilst the court has power to attach conditions and sanctions to orders, the court declined to attach an automatic sanction. The court stated it “would not be minded to attach an automatic sanction” and instead preferred to grant liberty to apply for an unless order in case of future non-compliance. [§17]

CPR 3.1(5): No order was made as TM had not identified any specific rule, practice direction, or pre-action protocol that LP had breached. The court found TM “do not make clear which rule, practice direction or relevant pre-action protocol they say LP has not complied with.” [§19-22]

CPR 25.21(2): This provision, which permits multiple interim payment applications, was irrelevant as the application was for security for costs, not an interim payment. The court stated “I do not consider that an application for an interim payment order is before me.” [§23-24]

The Justice Requirement Under CPR 25.27(a)

Separately and in any event, the court held it would not be just to order security for costs under CPR 25.27(a), considering all circumstances of the case. [§95-99]

The court noted:

- - LP had already made substantial payments on account. With the final instalment, TM would have received “just over 57% of the fees they seek from LP.” [§11-13, §96]
  - She had complied with the previous unless order and was not in default of the instalment schedule at the time of the hearing. [§10, §96]
  - The detailed assessment hearing was “very nearly upon us.” [§97]
  - TM’s estimated costs of assessment of £400,000 “strike me as highly excessive and likely to be substantially reduced (if indeed TM are the party who secures an order for costs in their favour).” [§97]
  - TM had alternative procedural options available, including “steps TM could otherwise have taken, whether in the form of an application for a further payment on account or to obtain evidence that might have better supported a subsequent application for security.” [§98]

The court observed that TM “may have been better served by making an application for a further payment on account rather than pursuing the more onerous route of seeking an order for security for costs.” However, the court stated it would “only deal with the application before me,” which left “no realistic scope for compromise of the application itself.” [§92-93]

Costs of the Application

TM was ordered to pay LP’s costs of the application, to be summarily assessed at the start of the preliminary issues hearing if not agreed. In the alternative, the court offered to arrange a short 15-minute remote hearing purely to conduct the necessary summary assessment exercise. [§100]

Security For Costs Application Under CPR 25 | Financial Difficulties and Late Claims

CPR 25.27 | £6m Security For Costs Denied As Escrow Funds In UK Account Deemed Sufficient To Satisfy Any Costs Order

Additional Security For Costs Ordered For Inquiry And Detailed Assessment Despite Discharge Of Injunction

Statute Bills And Payments On Account In Solicitors Act Assessments

Solicitors Act 1974 | Part Payments, Delay And Special Circumstances

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

CPR 44.11 | 75% Costs Reduction For Egregiously Defective Bill | Solicitors Remain Vicariously Liable For Costs Draftsman Failures

Detailed Assessment, New Costs Blog, Points of Dispute & Replies, Relief from Sanctions, Wasted Costs

The Senior Courts Costs Office’s decision in Hyder v Aidat-Sarran [2024] EWHC 3686 (SCCO) establishes that solicitors bear full vicarious responsibility for costs draftsmen’s failures and cannot avoid severe sanctions by blaming their agents when bills contain egregious, persistent, and unrectified defects.

Background

The matter concerned detailed assessment proceedings in the Senior Courts Costs Office before Deputy Costs Judge Roy KC. The substantive litigation between the parties had concluded, and the claimant, Rashid Hyder, was seeking to recover his costs. The procedural history was marked by difficulties with the service of a compliant bill of costs by the claimant. An unless order was made requiring service of the bill by a specified date. The claimant served a bill one day after the deadline, and this bill was found to contain multiple and significant defects. The defendants, Robert Aidat-Sarran and Humwattie Aidat-Sarran, raised these defects in points of dispute served in response to the bill. The claimant then served a second, electronic bill, which not only failed to rectify the serious problems with the paper bill but added further defects. This led to the defendants making an application to strike out the claim for costs pursuant to CPR 44.11. The claimant, in turn, made an application for relief from sanctions for the late service of the initial bill.

Costs Issues Before the Court

The court was required to determine two distinct but related applications. The first was the claimant’s application for relief from sanction under CPR 3.9 for the late service of his bill of costs. The second was the defendants’ application under CPR 44.11 for the court to disallow all or part of the costs, seeking the draconian sanction of striking out the bill entirely due to the claimant’s multiple and serious failures in the preparation and service of both the original and the subsequent bill.

The Parties’ Positions

The claimant sought relief from sanction, arguing that the breach—serving the bill one day late—was neither serious nor significant when considered in isolation. It was submitted that the service of the bill, albeit defective, constituted belated compliance with the unless order. On the defendants’ application, the claimant accepted there were defects but argued that strikeout was a disproportionately severe sanction. The claimant’s counsel offered an apology for the failures at the hearing, although this came only at around midday on the day of the hearing itself.

The defendants opposed relief from sanction, contending that the bill was so seriously defective that its service could not be considered compliance with the order at all. On their own application, the defendants argued that the multiple, egregious, and persistent defects in both bills, coupled with a complete failure to address or rectify them even after they were highlighted in the points of dispute, amounted to unreasonable or improper conduct warranting the bill being struck out in its entirety. They submitted that the court could have no confidence in any future bill served by the claimant. The defendants’ witness statement of 22 August 2024 had clearly set out all these failings.

The Court’s Decision

The court granted the claimant’s application for relief from sanction. Applying the first stage of the Denton test, Deputy Costs Judge Roy KC found that the breach of the unless order was the one-day delay in service. The service of a defective bill was held to constitute belated compliance with the order, which only required “service of a bill.” The judge distinguished the situation from cases where a served document is “gibberish” or blank, citing CNM Estates (Tolworth Tower) Limited v Carvill-Biggs [2023] EWCA Civ 480. Consequently, the one-day delay was not serious or significant, and relief was granted.

On the defendants’ application under CPR 44.11, the court found that the claimant’s conduct met the threshold for the rule to be engaged. The judge made seven key findings at paragraphs 10-20 of the judgment:

- - First, the original bill contained multiple significant failures which the judge described as “egregious” when viewed in the round.
  - Second, none of these defects were rectified in the second bill, the electronic bill, which the judge found “absolutely astonishing.”
  - Third, the second bill not only failed to rectify the serious problems with the paper bill but added further defects, which was “even more astonishing” given that the need to ensure a defect-free bill had been clearly flagged in the points of dispute.
  - Fourth, all these failings were clearly set out in the defendants’ witness statement of 22 August 2024. Fifth, the claimant’s solicitors displayed a “serious and troubling lack of insight and contrition” by failing to address the defects, serve any evidence, or even acknowledge these failings before the hearing, with an apology only coming via counsel at around midday on the hearing day itself.
  - Sixth, the judge found it was not open to the claimant’s solicitor to blame the costs draftsman. As a matter of law under Gempride v Bamrah [2018] EWCA Civ 1367, the costs draftsman is the solicitor’s agent and the solicitor is vicariously responsible for all the costs draftsman’s failings as if the solicitor had performed the work themselves. In any event, there had been serious direct failings on the solicitor’s part: solicitors must apply superintendence and oversight to what a costs draftsman does, and the defects here were so obvious that the solicitor should have identified them; the solicitor should have been proactive to ensure compliance in time and properly; some failings, such as failures to certify, were purely those of the solicitor and were very basic; and by 22 August 2024 at the latest, in light of the defendants’ statement, the solicitors could not have had any basis to place reliance upon the costs draftsman, yet the compounding failures continued.
  - Seventh, the judge was satisfied that both limbs of CPR 44.11(a) and (b) were met: there had been non-compliance with the rules, and there had been unreasonable conduct, meaning conduct which does not admit a reasonable explanation. In summary, the judge found there had been “multiple compound breaches” that were “serious”, “persistent”, “unexplained”, and “inexcusable.”

While not making a positive finding of improper conduct without “the full picture,” the judge noted at paragraph 19 that serving an unchecked bill without caveat came “very close” to improper conduct and was at least arguably reckless as to the possibility of the court or defendant being misled.

Despite the seriousness of the conduct, the court declined to strike out the bill. The judge held that strikeout was the most draconian sanction and that a judge should always give “very anxious consideration” to whether any lesser sanction could properly meet the justice of the case. On a “very narrow balance,” the court was persuaded that lesser sanctions were appropriate. The court noted that in Gempride itself, despite serious misconduct, there was a substantial reduction but the bill was not struck out entirely, and this precedent tended to point against strikeout being appropriate in this case. The court also considered that the concerns about proportionality and confidence in any redrawn bill could be addressed by the orders it proposed to make.

Instead, the court imposed a severe costs sanction, disallowing 75% of the claimant’s assessed costs under CPR 44.11. This meant that whatever sum the bill was ultimately assessed at on detailed assessment, the claimant would recover only 25% of that total assessed sum. The judge described this as a “stern sanction by CPR 44.11 standards” but remained of the view that it was appropriate, noting that the claimant and his solicitors could “consider themselves quite fortunate that the bill is not struck out entirely.”

The court also disallowed interest on the claimant’s costs from 30 July until whatever date it was agreed the redrawn bill should be served by. The judge’s initial inclination had been to disallow all interest, but this was rejected as it would amount to double jeopardy in circumstances where 75% of the costs had already been disallowed.

Allegations of misconduct and the court’s powers under CPR 44.11

CPR 44.11 | Claimant’s Costs Of £174,565.79 Reduced To Nil

CPR 44.11: Misconduct in detailed assessment proceedings

Solicitor’s Costs Budget Figure Does Not Inherently Constitute Misleading Conduct Under CPR 44.11

Opportunistic Conduct Detailed Assessment CPR 3.9 | Long v Value

CPR 47.12 | Setting Aside A Default Costs Certificate | Application Denied

SCCO Guide 2025 Published

CPR & Practice Directions, Detailed Assessment, New Costs Blog, New News Article

The Senior Courts Costs Office has published its 2025 Guide, with a foreword by Lord Justice Colin Birss, Deputy Head of Civil Justice.

The 2025 edition supersedes the 2023 Guide and reflects procedural reforms introduced by the Civil Procedure (Amendment) Rules 2024 and the consolidation of electronic filing provisions into Practice Direction 5C. It introduces a number of changes impleneted since 2023 affecting Court of Protection costs, detailed assessment procedures, and Supreme Court and JCPC assessments.

Court of Protection fixed costs increases

From 1 April 2024, all Court of Protection fixed cost categories were increased by approximately 27%, following a review by the SCCO and the Office of the Public Guardian (OPG). These revised rates reflect inflation and administrative cost pressures.

Solicitors’ costs in court proceedings:

- - Category I (deputy appointment) – now £1,204 (plus VAT), up from £950
  - Category II (trustee applications) – now £633 (plus VAT), up from £500
  - New Category III: applications under Practice Direction 9D paragraph 4, set at £633 (plus VAT)

Deputy remuneration:

- - Annual management fee (first year) – now £2,116 (plus VAT), up from £1,670
  - Annual management fee (subsequent years) – now £1,672 (plus VAT), up from £1,320
  - Health and welfare deputy maximum – now £703 (plus VAT), up from £555
  - Report preparation – now £336 (plus VAT), up from £265
  - Basic HMRC tax return – now £317 (plus VAT), up from £250

The threshold for the 4.5% alternative fee calculation has increased from £16,000 to £20,300 net assets. Deputies with assets below this threshold are no longer permitted to apply for assessed costs.

The 2025 Guide also clarifies that complex tax returns are now treated as specialist services requiring separate procedures rather than falling within the fixed fee categories.

Costs following P’s death | new clarification

The 2025 Guide provides detailed new guidance on costs procedure following P’s death, representing one of the most significant clarifications in this edition:

- - Deputies do not require a further Court of Protection order to seek SCCO assessment for costs incurred during P’s lifetime.
  - The SCCO has no jurisdiction to assess post-death costs under the COP Rules 2017, as the COP’s substantive jurisdiction ends with P’s death.
  - Deputies may request suspension of assessment and can agree costs directly with personal representatives.
  - The Deputy must inform the SCCO in writing whether an agreement has been reached and whether the bill is to be withdrawn or assessment continued.
  - Clear procedures are set out for handling pending assessments upon P’s death.

The Guide also notes that the SCCO may require evidence of death and of the personal representatives’ authority before proceeding.

Court of Protection payments on account | updated guidance

Section 27.17 of the 2025 Guide provides updated rules on interim payments:

- - Interim bills may be rendered provided that the cumulative total does not exceed 75% of work in progress or 75% of the OPG estimate, whichever is lower.
  - If overpaid, deputies must reimburse P’s estate within 28 days of the final costs certificate being issued.

The Guide confirms that this 75% cap applies cumulatively across all interim invoices, and any excess must be repaid even if caused by later disallowance at assessment.

Provisional assessment procedure | change to offers

There has been an important change to the handling of offers in provisional assessments. Offers must now be filed and clearly marked in the description of the document rather than being submitted in sealed envelopes.

This brings SCCO practice into line with CE-File protocols across the Royal Courts of Justice, eliminating the use of sealed envelopes entirely.

Supreme Court and JCPC assessments | new rules and portal filing

Section 36 of the 2025 Guide has been comprehensively updated to reflect new procedural frameworks:

- - Supreme Court assessments are now governed by the Supreme Court Rules 2024 (previously the 2009 Rules).
  - JCPC assessments are governed by the Judicial Committee (Appellate Jurisdiction) Rules Order 2024, with updated Part 7 (previously Part 6).
  - Bills of costs must now be filed and served via the Supreme Court portal (new mandatory requirement).
  - Points of Dispute must also be filed through the portal, not by email.
  - Updated Practice Direction references include PD 13 paragraphs 13.40–13.42 for extensions and 13.50–13.54 for reviews.

These changes align Supreme Court and JCPC procedure with digital filing obligations now in force across all appellate jurisdictions.

Electronic filing | updated practice direction

References to electronic filing have been updated from Practice Direction 51O to Practice Direction 5C, consolidating the e-filing rules following the conclusion of the pilot scheme.

This aligns the SCCO with the Civil Procedure Rules’ new structure, under which PD 5C now governs all electronic filing in the High Court and SCCO.

Regional Costs Judges | updated appointments

The list of Regional Costs Judges has been substantially revised to reflect appointments, retirements, and reassignments across all circuits.

Notably, District Judge Besford (SiR) has been added for Hull, with further changes in the North Eastern, Northern, Midlands, Wales, South Eastern and Western Circuits. The Guide provides an up-to-date list of authorised judges.

Group listing suspended

The 2025 Guide confirms that group listing remains suspended.
Cases that would previously have been group listed (shorter detailed assessments) are now listed in the same manner as other detailed assessments before a Costs Judge or Deputy Costs Judge.

This position remains under administrative review by the SCCO.

You can download the full 2025 SCCO Guide here.

Default Costs Certificate Set Aside Due To Unexplained 300% Costs Increase Despite Defective Application

Detailed Assessment, Legal Aid, New Costs Blog, Points of Dispute & Replies, Relief from Sanctions

Background

The matter concerned an application to set aside a Default Costs Certificate in detailed assessment proceedings arising from family litigation. The underlying case was a divorce petition under Case Number BV20D09765, where an order had been made by HHJ Poole on 15 May 2024 requiring the Respondent (H) to pay the Petitioner’s (W) costs. Those costs were to be assessed on the standard basis from 1 June 2020, in respect of the divorce petition and incidental applications, including applications by H for declarations regarding the validity of the divorce. The assessment was to be conducted in accordance with Regulation 21 of the Civil Legal Aid (Costs) Regulations 2013, with both parties having instructed solicitors on record.

On 11 February 2025, W served a Notice of Commencement of Bill of Costs, which was emailed to H’s solicitor and formally served by post on 12 February 2025. The notice, in Form N252, specified that points of dispute were to be served by 6 March 2025, and it included a warning that failure to do so would lead to an application for a Default Costs Certificate for the full amount of the bill. H did not serve points of dispute by the deadline. On 6 March 2025, W’s representatives applied for a Default Costs Certificate, which was issued on 11 March 2025 and served on H’s solicitors. H then issued an application to set aside the Default Costs Certificate on 21 March 2025.

During this period, there were assertions regarding the health of both parties. W was noted to have been incapacitated, as evidenced by a sick note dated 27 February 2025. H was also reported to have been unwell, although the only medical evidence provided was a sick note dated 10 April 2025, which post-dated the relevant period. H had agreed to vacate a parallel hearing in March 2025, but this was attributed to Ramadan rather than health issues. H’s solicitor indicated that delays were partly due to H’s need to secure funds for a payment on account to his legal team and that he was in no position to finalise instructions until 3 March 2025.

Costs Issues Before the Court

The primary issue before the court was whether the Default Costs Certificate should be set aside pursuant to CPR 47.12. The application required consideration of whether H had shown a good reason for the certificate to be set aside and whether the application complied with Practice Direction 47, paragraph 11.2(3), which mandates that a draft of the proposed points of dispute be filed with the application. Additionally, the court had to evaluate the conduct of both parties in the context of the overriding objectives and the principles from Denton v White [2014] EWCA Civ 906 regarding relief from sanctions.

The Parties’ Positions

H sought to set aside the Default Costs Certificate under the discretionary limb of CPR 47.12(2). It was accepted on behalf of H that the first two stages of the Denton test were not met, but it was argued that the certificate should be set aside for several reasons. Firstly, H’s representatives had made an in-time request for an extension to file points of dispute on 5 March 2025, which was not expressly refused but was not agreed due to W’s costs lawyer lacking instructions. Secondly, it was questioned whether W had given specific instructions to reject the extension request. Thirdly, H emphasised a significant and unexplained increase of approximately 300% between the costs claimed in a prior N260 statement from the final hearing and the current bill of costs, arguing that this discrepancy could not be justified solely by the difference between legal aid rates and market rates. H contended that allowing the certificate to stand would diminish matrimonial assets unfairly.

W opposed the application, asserting that the Notice of Commencement had clearly warned of the consequences of non-compliance. W’s costs lawyer had been unable to obtain instructions to grant an extension by the deadline, and the application for the Default Costs Certificate was made in accordance with the pre-authorised course of action. W argued that H’s delays, including the failure to file points of dispute promptly and the subsequent delay in applying to set aside the certificate, were not sufficiently justified. W also maintained that the increase in costs was attributable to legitimate differences between legal aid billing and inter partes costs assessment, including variations in hourly rates, claimable items, and assessment bases.

The Court’s Decision

The court granted the application to set aside the default costs certificate under CPR 47.12 dated 11 March 2025 and permitted H to rely on the points of dispute served on 26 March 2025. However, no costs were awarded to either party in respect of the application.

In reaching this decision, the court found that H’s request for an extension on 5 March 2025 had not been rejected out of hand; rather, W’s costs lawyer had been unable to secure instructions in time. The court noted that W’s legal team had been pre-authorised to apply for a Default Costs Certificate upon non-compliance, but criticised their failure to provide prior warning to H’s team before making the application, describing their conduct as “only very slightly short of opportunistic.” Nevertheless, the court emphasised that H’s team had been aware of the deadline and the lack of authority to extend, and there was no adequate explanation for the delays between the issuance of the certificate and the application to set it aside, or for the initial failure to include draft points of dispute with the application.

The court placed significant weight on the unexplained 300% increase in costs between the N260 and the current bill. While acknowledging that differences between legal aid and inter partes costs could account for some variance, the court found the magnitude of the increase sufficiently concerning to warrant setting aside the certificate, given the potential impact on matrimonial assets. The court noted that W’s team had not adequately addressed this discrepancy before or during the application.

Applying the principles from Denton, the court concluded that neither party had acted in a manner that furthered the overriding objective of dealing with cases justly and at proportionate cost. Consequently, while the Default Costs Certificate was set aside to allow detailed assessment to proceed, the court exercised its discretion to make no order as to the costs of the application.