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

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

Background

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

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

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

Costs Issues Before the Court

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

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

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

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

The Parties’ Positions

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

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

The Court’s Decision

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

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

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

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

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

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

(i) limitations in the receiving parties’ evidence;

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

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

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

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

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

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

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s71(3) | Beneficiaries Who Pursued Unreasonable Solicitors Act Assessments Bear the Costs Personally

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The Senior Courts Costs Office’s decision in Tucker & Anor v Howe [2026] EWHC 208 (SCCO) addresses two consequential issues arising from a nine-day detailed assessment of the costs of an estate administrator appointed under probate proceedings.

Background

The matter concerned the detailed assessment of costs under section 71(3) of the Solicitors Act 1974. The costs were those of Mr Mark Keeley, a solicitor and partner at Freeths LLP, who had been appointed as administrator pending suit of the estate of the late Mr Steven Howe. The appointment was made by order of HHJ Pearce on 16 October 2020 within probate proceedings brought by the executrices (the Claimants) to propound Mr Howe’s will against his daughter, the Defendant. Mr Keeley’s appointment authorised him to charge reasonable professional fees and terminated upon the final order in the probate claim.

The probate claim was compromised by a consent order in December 2021. Disputed matters of administration were later resolved by a further consent order made by District Judge Woodward on 21 February 2023. That order provided for the determination of the Administrator’s costs by way of a third-party detailed assessment pursuant to section 71(3) of the 1974 Act, setting out a timetable for the service of a bill, points of dispute, and the commencement of assessment proceedings in the Senior Courts Costs Office if agreement was not reached. The bill for assessment, served pursuant to that order, was drawn in the total sum of £147,436.33 across twelve parts, covering both contentious and non-contentious work under two separate contracts of retainer, together with Mr Keeley’s own professional time costs and counsel’s fees.

The assessment hearing took nine days of court time over three separate periods between April 2024 and February 2025. That duration was largely the result of 67 pages of Points of Dispute which employed the word “staggering” or “staggeringly” 54 times and the word “astonishing” 17 times. The court found none of that hyperbole justified. The bill was assessed at £129,686.76, just below 88% of the amount claimed. The court found the Claimants’ conduct to have been unreasonable to a high degree and ordered them to pay the costs of the assessment on the indemnity basis, summarily assessed at £132,400 exclusive of VAT.

The parties were unable to agree the terms of a final order, leading to a further hearing on two unresolved issues: whether the Claimants or the estate should bear the costs of the assessment, and the recoverability of VAT on those assessment costs. The question of costs liability had taken on particular significance because the estate of Mr Howe was insolvent, an Insolvency Administration Order having been made on 23 July 2025.

Costs Issues Before the Court

Two discrete costs issues required determination. The first was the identity of the party liable to pay the costs of the detailed assessment proceedings. The Claimants argued the burden should fall on the insolvent estate, while Mr Keeley contended the Claimants were personally liable in their capacity as beneficiaries who had applied for the assessment. The second issue was whether Value Added Tax was properly recoverable on the costs of the assessment, with the Claimants arguing that the work constituted a non-taxable self-supply by Freeths.

The Parties’ Positions

On the burden of costs, Professor Watson-Gandy submitted for the Claimants that the central consideration in a section 71(3) assessment was the protection of the estate’s interests, relying on Kenig v Thomson Snell & Passmore LLP [2024] EWCA Civ 15. He argued that the Claimants had participated in their capacity as executrices fulfilling a fiduciary duty to the beneficiaries. He submitted that DJ Woodward’s consent order made no provision for personal liability and that CPR 46.2, which governs costs orders against non-parties, would have been required if such liability was intended.

Mr Latham argued for Mr Keeley that the Claimants had clearly applied for and pursued the assessment in their capacity as beneficiaries, a point reinforced by their own pre-action correspondence and by the legal arguments they had advanced to broaden the scope of the assessment. The Claimants’ representative, Mr Valls, had consistently corresponded on behalf of all the beneficiaries and demanded a detailed assessment in that capacity. The court retained an absolute discretion under section 51 of the Senior Courts Act 1981 and section 71(3)(b) of the 1974 Act. Given the court’s findings on the Claimants’ unreasonable conduct — conduct not attributable to the estate or the beneficiaries as a whole — it was appropriate to order the Claimants to pay the costs personally.

On VAT, Professor Watson-Gandy argued that where solicitors act for themselves in contentious business matters, the supply is not a taxable supply, citing the VAT tribunal decisions in Ralph Arthur Archer v The Commissioners and D A Walker v The Commissioners. It was submitted that Freeths’ bills were addressed to Mr Keeley at Freeths, and that estate accounts bore Freeths’ business address, indicating a self-supply. Mr Latham submitted that the point had not been raised in the Points of Dispute against the main bill and should not be permitted to be raised after the assessment had concluded. On the merits, he argued that Mr Keeley and Freeths were separate legal entities capable of entering into a retainer and that VAT was properly chargeable on Freeths’ supply of services to him.

The Court’s Decision

Burden of the Costs of Assessment

Costs Judge Leonard held that the Claimants were personally liable for the assessment costs in their capacity as beneficiaries. The court rejected the argument that they had acted as executrices, for several reasons. The Claimants had made it clear from the outset that they were acting as beneficiaries. They had relied extensively upon their position as beneficiaries to broaden the scope of their challenges to Mr Keeley’s costs. And the statutory jurisdiction under section 71(3) does not empower the court to order an assessment on the application of a trustee, executor or administrator; it empowers the court to do so on the application of any person interested in the relevant property — in this case, the beneficiaries of Mr Howe’s will.

The description of the Claimants as executrices in the heading of the proceedings and other procedural documents reflected the proper title of the probate proceedings in which the consent order was made. It had no bearing on the substance of the order or the capacity in which the assessment was pursued. The court held that CPR 46.2 had no application because the Claimants were already parties to the assessment proceedings, not non-parties. DJ Woodward’s order made no provision for the costs of the assessment because orders for assessment do not make such provision; the award and quantification of those costs was a matter for the assessing judge.

Even if the court was wrong on any of those points, it accepted Mr Latham’s submissions on the appropriate exercise of discretion. The Claimants had, without ever themselves making any attempt at negotiation, rejected three attempts by Mr Keeley to settle the costs dispute upon receipt of a smaller sum than he was ultimately found to be due on assessment. Had they engaged with those settlement attempts, it would have been possible to avoid the necessity for the court to spend nine days reducing the bill by less than £18,000 inclusive of VAT. It would be unfair for the estate, and potentially for Mr Ross Tucker and Mr Jamie Tucker (who did not participate in the assessment), to bear any part of the burden of the unnecessary costs incurred through the Claimants’ actions.

Recoverability of VAT

The court first held that the Claimants were barred from raising a VAT challenge to the main bill itself, having failed to raise the point in their Points of Dispute. CPR 47.14(6) provides that only items specified in the points of dispute may be raised at the hearing unless the court gives permission, and no such permission had been sought or granted.

On the substantive question of VAT on the costs of the assessment, the court found no basis for the self-supply argument. Mr Keeley and Freeths LLP are separate entities capable of entering into a contract of retainer. Freeths had provided services to Mr Keeley under two contracts of retainer, and VAT was payable on their charges in the usual way. The termination of Mr Keeley’s appointment as administrator did not affect this analysis. On Mr Keeley’s own time costs (Part 10 of the bill), the court held there was no question of self-supply because his services as administrator were supplied to the estate, not to himself. As for the costs of the assessment, Mr Keeley had been represented by counsel instructed by Freeths; he was not representing himself. He had a liability to Freeths for the attendant costs, and they had an obligation to add VAT to their fees and disbursements. The inclusion of Freeths’ address on bills or estate accounts was not to the point.

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Update, 12 September 2026: this decision was appealed and upheld. In The Winros Partnership v Global Energy Horizons Corporation [2026] EWCA Civ 654 the Court of Appeal dismissed the Merits appeal, Stuart-Smith and Lewison LJJ agreeing. The position below stands.

The High Court’s decision in The Winros Partnership v Global Energy Horizons Corporation [2025] EWHC 3362 (Ch) confirms that contractual risk allocation in a CFA precludes unjust enrichment claims where the agreement already provides for the consequences of termination.

Background

The case concerned an appeal by The Winros Partnership (formerly Rosenblatt Solicitors) against a decision of Senior Costs Judge Gordon-Saker in the Senior Courts Costs Office. This was the second appeal in the long-running costs dispute between these parties; the procedural history and the abuse of process challenge to late-raised objections was considered in the First Judgment, covered in our earlier post.

The underlying dispute arose from a series of conditional fee agreements (CFAs) between Rosenblatt and its client, Global Energy Horizons Corporation, for litigation services. Three CFAs were entered: CFA-1, CFA-2, and CFA-3. The relationship deteriorated, leading Rosenblatt to terminate CFA-3 by accepting Global Energy’s repudiatory breach in a letter dated 24 February 2016. This termination was subsequently held to be valid by Trower J in earlier proceedings [§7].

In April 2016, Global Energy commenced proceedings under the Solicitors Act 1974 seeking detailed assessment of four bills rendered by Rosenblatt [§9]. The key bills were a 2012 bill (for work under CFA-2) and a 2016 bill (for work under CFA-3). Trower J had already determined that the 2012 bill was not a statute bill and conferred no immediate right to payment [§11]. The appeal focused on the 2016 bill, delivered shortly after termination, which Rosenblatt sought to have assessed. Rosenblatt had also commenced separate Chancery proceedings for damages arising from the termination, which were stayed pending the outcome of the costs assessment [§12, §37].

At the detailed assessment hearing, Global Energy raised “Objection 1”, contending that Rosenblatt was not entitled to payment of its fees for work done up to the termination date where no “win” had been achieved under the CFA [§4, §13]. The Senior Costs Judge framed the issue as: where a CFA retainer is terminated following the client’s repudiation, is the solicitor entitled to payment of fees if no success fee had been achieved? He concluded that Rosenblatt was not entitled to deliver the 2016 bill, that Global Energy was not liable to pay it, and therefore the bill must be assessed at nil [§65–66]. It was against this decision that Rosenblatt appealed.

Costs Issues Before the Court

The core costs issue was the entitlement of a solicitor to payment of fees under a conditional fee agreement terminated due to the client’s repudiatory breach, where the condition for payment of the success fee (a “win”) had not been met. The appeal required the court to determine:

      1. Whether the Senior Costs Judge erred in law in concluding that a solicitor could not recover fees (absent a success fee) following termination for repudiation, distinguishing the position from termination of an “ordinary” retainer for good cause.
      2. Whether Rosenblatt had an alternative claim in unjust enrichment (a quantum meruit) for a total failure of basis, which could found an entitlement to payment, and if so, whether such a claim could properly be determined within a detailed assessment proceeding under the Solicitors Act 1974.

The appeal proceeded on the agreed basis that CFA-3 was an entire contract and had completely replaced CFA-2 [§20, §23].

The Parties’ Positions

Rosenblatt’s Position: Rosenblatt contended the Senior Costs Judge erred. It argued that the long-established common law rule, as stated obiter in Richard Buxton (a firm) v Mills-Owens [2010] EWCA Civ 122, entitled a solicitor terminating an entire contract for good cause to be paid for work done [§27–28]. It submitted this principle should apply equally to CFAs. Crucially, Rosenblatt argued that its primary case on appeal was now a claim in unjust enrichment [§38, §57]. It contended that the basis for its work under CFA-3—performance leading to a “win” or, if not, termination under the agreement’s specific clauses—had totally failed when Global Energy’s repudiatory breach forced termination outside the contractual framework. Rosenblatt submitted that this created a vacuum allowing a restitutionary quantum meruit for the value of services rendered. It argued this claim could and should be determined within the detailed assessment.

Global Energy’s Position: Global Energy supported the Senior Costs Judge’s reasoning. It argued that CFA-3’s express terms, particularly clause 14.3, constituted a detailed contractual scheme allocating risk for termination due to the client’s failure to meet responsibilities, while leaving the common law damages remedy intact. Clause 14.3 provided [§14]:

“Rosenblatt can end this agreement if it believes the Client does not meet its responsibilities. If this happens, the Client will have to pay Rosenblatt’s fees for the work done to the termination date and disbursements.”

By choosing to accept a repudiatory breach instead of invoking clause 14.3, Rosenblatt elected a different remedial path (a claim for damages) [§37]. The contract had anticipated and provided for the scenario, allocating the risk that Rosenblatt would recover no fees if it did not use the clause 14.3 mechanism. Consequently, there was no room for a claim in unjust enrichment, as to allow one would upset the parties’ contractual risk allocation [§47–48]. Global Energy also argued that a freestanding unjust enrichment claim was not a matter for determination on a Solicitors Act assessment.

The Court’s Decision

Mr Justice Marcus Smith dismissed the appeal, upholding the Senior Costs Judge’s decision that the 2016 bill should be assessed at nil [§56]. The court’s analysis focused on two key areas: the claim in unjust enrichment and the propriety of the detailed assessment forum.

On the unjust enrichment claim, the court held there had been no total failure of basis. Applying principles from Dargamo Holdings Ltd v Avonwick Holdings Ltd [2021] EWCA Civ 1149 and Barton v Morris [2023] UKSC 3, the court emphasised the “Obligation Rule” and the importance of respecting contractual risk allocation [§41–49]. CFA-3’s clause 14 was a detailed provision anticipating various contingencies, including client non-performance (clause 14.3). This clause expressly stipulated the financial consequence: payment of normal fees and disbursements, but no success fee [§53].

The court found that while the common law remedy for repudiatory breach co-existed with these contractual terms, its existence did not create a vacuum allowing a restitutionary remedy that duplicated or circumvented the specific risk allocation in clause 14.3 [§54–55]. The parties had expressly agreed what would happen if Rosenblatt ended the agreement because Global Energy did not meet its responsibilities. To permit a quantum meruit claim in these circumstances would unjustly redistribute the risks expressly allocated by the contract. The court concluded that the common law remedy was a “last resort”, really intended for those cases not anticipated in clause 14 [§55]—and since clause 14.3 specifically addressed this scenario, there was no gap for restitution to fill. For substantially the same reasons as the Senior Costs Judge, Rosenblatt’s restitutionary claim failed [§56].

Obiter, the court also addressed the appropriateness of determining such a claim within a detailed assessment [§57–64]. Relying on Jones v Richard Slade and Co Ltd [2022] EWHC 1968 (QB), it held that the Solicitors Act assessment process is a regulatory review of a bill’s reasonableness, not a vehicle for enforcing debts or determining generalised claims such as unjust enrichment [§60–61]. While the court had jurisdiction to decide the point, it was not the appropriate forum [§63]. Such claims, if genuinely arguable, should be pursued in separate High Court proceedings, with the assessment potentially stayed. The effective dismissal of the claim within the assessment was therefore correct [§64].

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

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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.

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

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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].

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Solicitor and client assessments: Introduction

Court Declines To Bifurcate Solicitors Act Assessment

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

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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.

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

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

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

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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].

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

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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]

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