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Baxendale-Walker Principle Does Not Extend To Appellate Costs Against Regulatory Bodies

The Court of Appeal’s decision in Dentons UK and Middle East LLP v Solicitors Regulation Authority Ltd [2026] EWCA Civ 655 addresses whether the costs protection afforded to regulatory bodies in first-instance disciplinary proceedings applies equally on appeal.

Background

Dentons UK and Middle East LLP (“Dentons”) is a solicitors’ firm that found itself subject to disciplinary proceedings brought by the Solicitors Regulation Authority Ltd (“the SRA”) before the Solicitors Disciplinary Tribunal (“the SDT”). The SDT reached a decision against Dentons, which Dentons then appealed to the High Court. That appeal was heard by Lang J, who dismissed it. Dentons pursued a further appeal to the Court of Appeal, which was heard over two days on 25 and 26 March 2026.

In its substantive judgment handed down on 27 April 2026 ([2026] EWCA Civ 508), the Court of Appeal allowed Dentons’ appeal. The SDT’s decision was quashed and the matter was remitted to the SDT to be determined on the basis of a different test set out in the Court of Appeal’s judgment. Dentons was therefore substantially the successful party in the appellate proceedings, though the case was not concluded outright in its favour given the remittal.

Following the substantive judgment, the parties were unable to agree costs, and the Court of Appeal was required to determine the appropriate costs orders in respect of both the appeal to Lang J and the further appeal to the Court of Appeal. It was common ground between the parties that the costs of the proceedings before the SDT itself were to be reserved to the SDT. The costs judgment was handed down on 21 May 2026 ([2026] EWCA Civ 655), with the constitution comprising Lord Justice Bean (Vice President of the Court of Appeal, Civil Division), Lord Justice Jeremy Baker, and Lord Justice Zacaroli.

Costs Issues Before the Court

Two distinct costs issues required determination. The first, and more substantive, was whether the SRA’s status as a regulatory body meant that no costs order should be made against it in respect of the appellate proceedings, notwithstanding that Dentons had been substantially successful. The SRA argued that the principle established in Baxendale-Walker v Law Society [2007] EWCA Civ 233 (“Baxendale-Walker 1”), which disapplied the ordinary costs-follow-the-event rule in disciplinary proceedings before the SDT, should be extended to cover appeals from the SDT as well.

The second issue, which arose only if the court rejected the SRA’s primary position and made a costs order in Dentons’ favour, concerned the appropriate amount to be ordered on account of costs pending detailed assessment. Dentons had filed costs schedules showing total costs of £793,679.60 exclusive of VAT across both appeals: £355,778.98 in the High Court and £437,900.62 in the Court of Appeal. The SRA’s own costs across the same proceedings were considerably lower, at £90,358.54 in the High Court and £89,479.13 in the Court of Appeal, making Dentons’ costs nearly 4.5 times greater than those of the SRA.

The Parties’ Positions

The SRA’s position

The SRA contended that no costs order should be made against it, relying on the principle in Baxendale-Walker 1. In that case, the Court of Appeal held that there was no presumption that costs should be awarded in favour of a solicitor who had successfully defeated disciplinary proceedings before the SDT. The reasoning was that the Law Society (and by extension the SRA) occupied a wholly different position to that of an ordinary civil litigant, given its independent obligation to bring properly justified complaints of professional misconduct to the SDT’s attention in the public interest. Exposing the regulator to adverse costs orders simply because properly brought proceedings had been unsuccessful risked a chilling effect on the exercise of its regulatory obligations.

The SRA further relied on a subsequent decision in the same proceedings, Baxendale-Walker v Law Society [2007] EWCA Civ 820 (“Baxendale-Walker 2”), in which Lord Phillips CJ expressed the view that the same principle applied equally to appellate proceedings under s.13 of the Solicitors Act 1974. The SRA argued that there was a tension between that approach and the line of authority suggesting that the ordinary CPR costs regime applied on appeal, and that Lord Phillips CJ’s approach was to be preferred.

Dentons’ position

Dentons argued that the Baxendale-Walker 1 principle was confined to proceedings before the SDT and did not extend to appeals. It relied on a consistent line of authority to that effect. In Bryant and another v Law Society [2007] EWHC 3043 (Admin), the Divisional Court applied the normal CPR approach to costs on an appeal from the SDT, though the court gave no consideration to either of the two Baxendale-Walker decisions. In Bass and Ward v SRA [2012] EWHC 2457 (Admin), Bean J reached the same conclusion having been referred to Baxendale-Walker 1, though Baxendale-Walker 2 was not cited. Most significantly, in Wingate v Solicitors Regulation Authority [2018] 1 WLR 3969, the Court of Appeal expressly confirmed that the Baxendale-Walker 1 principle did not apply on appeal, with Rupert Jackson LJ stating that parties arriving in the Administrative Court on appeal from the SDT entered a costs-shifting regime and stood on an equal footing, with the losing party ordinarily paying the winning party’s costs under CPR r.44.2.

The Court’s Decision

The regulatory body costs issue

The Court of Appeal rejected the SRA’s argument that the Baxendale-Walker 1 principle should apply to the appellate proceedings. The court held that it was bound by its own decision in Wingate, which had expressly considered and answered the question in the negative. The fact that Lord Phillips CJ’s comments in Baxendale-Walker 2 had not been cited to the Court of Appeal in Wingate did not render that decision per incuriam. The observations in Baxendale-Walker 2 were in any event obiter, since Lord Phillips CJ had determined the costs question in that case largely on the basis of the petitioner’s dishonesty rather than on the regulatory principle.

The court also expressed agreement with the reasoning in Wingate as a matter of principle. The rationale underpinning Baxendale-Walker 1 was that the SRA’s regulatory responsibilities required it to bring properly justified complaints to the SDT without fear of the chilling effect of an adverse costs order, placing it in a wholly different position to that of an ordinary civil litigant. That rationale did not, however, extend to the appellate context. Where the SRA had the benefit of a determination from the SDT and was challenging that determination on appeal, its position was more akin to that of a normal litigant. The court therefore confirmed that the ordinary costs-follow-the-event approach under CPR r.44.2 applied.

Having determined that the SRA was not protected from an adverse costs order by reason of its regulatory status, the court considered the appropriate order. Dentons was substantially the successful party following the second appeal, but the SDT’s decision had been quashed and remitted rather than resolved outright in Dentons’ favour. Balancing those two considerations, the court ordered that the SRA pay 65% of Dentons’ costs of both the appeal to Lang J and the further appeal to the Court of Appeal, with those costs to be subject to detailed assessment if not agreed.

Payment on account

On the question of the appropriate payment on account, the court applied the approach set out in Excalibur Ventures LLC v Texas Keystone [2015] EWHC 566, identifying a fair estimate of the likely level of recovery subject to a margin to allow for error in estimation. The court was not assessing the costs, but determining what amount should be paid pending detailed assessment.

65% of the total costs incurred by Dentons was £515,891.74. The court noted that while the matter was no doubt of considerable importance to Dentons, the question on assessment of costs payable between litigants was not whether it was reasonable for Dentons to choose to instruct such expensive solicitors and counsel, but whether it was reasonable for the resulting cost to be imposed on the SRA. Given the enormous amount of Dentons’ costs for a matter that lasted a day in the High Court and involved substantially a repeat of the same arguments at a hearing of less than two days in the Court of Appeal, the court concluded that a substantial discount was appropriate in arriving at a fair estimate of the likely level of recovery. The court ordered the SRA to pay £200,000 within 21 days on account of the total costs incurred by Dentons across both appeals.

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A Near Full-Value Part 36 Offer On A Binary Recognition And Enforcement Claim Held To Be ‘Genuine’ Where The Strength Of The Claim Justified It

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The King’s Bench Division’s decision in Timokhin v Timokhina [2026] EWHC 1194 (KB) addresses whether a Part 36 offer representing a 9% discount on a binary recognition and enforcement claim was a genuine attempt to settle or a strategic device to secure indemnity costs.

Background

The underlying proceedings concerned a dispute between two Russian national former spouses, Alexander Valeryevich Timokhin (the claimant) and Anna Anatolyevna Timokhina (the defendant), about the recognition and enforcement in England and Wales of two Russian judgments relating to a contested post-nuptial agreement. The trial judgment ([2026] EWHC 439 (KB)) found in favour of Mr Timokhin and rejected the several objections advanced by Ms Timokhina. The Russian judgments were ordered to be recognised and enforced, with the debt arising from those judgments quantified at £417,416.67.

The consequentials judgment ([2026] EWHC 1194 (KB)), handed down by Mr Justice Dexter Dias on 19 May 2026, dealt with four applications: a stay of enforcement pending a domestic appeal and pending Russian bankruptcy proceedings, costs, interest, and payment on account. The claimant was represented by Matthew Bradley KC and William Birch, instructed by Brown Rudnick LLP. The defendant was represented by Charles Samek KC, Jennifer Perrins and Bláthnaid Breslin, instructed by Goodman Ray LLP.

For the purposes of this article, the focus is on the costs-related issues, namely the application of CPR Part 36, the appropriate rate of enhanced interest on costs, interest on the debt, and the quantum of the payment on account. The stay applications are addressed only insofar as they provide relevant context.

Costs Issues Before the Court

The claimant had made a Part 36 offer on 20 May 2025, with the relevant period expiring on 10 June 2025. The offer represented a 9% discount on the full value of the claim, specifying a figure of £380,000. At trial, the claimant succeeded in full, beating his own Part 36 offer.

The costs issues before the court were therefore as follows. First, whether it would be unjust, within the meaning of CPR 36.17(5), to impose the standard Part 36 consequences under CPR 36.17(4), namely indemnity costs from the expiry of the relevant period, enhanced interest on costs and an additional 10% payment. Second, if the Part 36 consequences were to apply, what rate of enhanced interest on costs should be ordered. Third, what rate of interest should be awarded on the debt itself. Fourth, what sum should be ordered by way of a payment on account of costs.

The defendant’s primary submission on the Part 36 issue was that the offer had not been a genuine attempt to settle the proceedings, as required by CPR 36.17(5)(e), on the basis that a 9% discount on a binary recognition and enforcement claim was effectively tokenistic. The defendant also raised a subsidiary argument that the offer was underspecified, confusing, equivocal or indistinct.

The Parties’ Positions

The claimant’s position

The claimant submitted that the Part 36 consequences under CPR 36.17(4) should follow in the ordinary way. It was argued that the offer of £380,000, representing a discount of just under 10% on the full claim value, was a genuine and reasonable attempt to settle. The claimant’s position was that the strength of his case justified a high offer level, and that the binary nature of recognition and enforcement claims did not render a high percentage offer inappropriate or illusory. The claimant further submitted that the defendant had raised arguments with poor prospects of success, some of which were floated and then disappeared with little more, and that her case had obvious weaknesses, particularly in its family law aspects. On the interest rate on costs, the claimant sought 8% above base rate. On interest on the debt, the claimant proposed a commercial rate of 5% from the date of the second Russian judgment (11 October 2023) to the expiry of the relevant period. On the payment on account, the claimant sought 65% of his costs, pointing to the volume of work necessitated by the defendant’s diffuse array of objections, some of which were first ventilated or particularised in detail only as trial approached.

The defendant’s position

The defendant submitted that it would be unjust to impose the CPR 36.17(4) consequences. Her primary argument was that the offer was not a genuine attempt to settle, relying on CPR 36.17(5)(e). It was contended that, given the binary yes/no nature of a recognition and enforcement claim, a discount of only 9% was effectively a device to secure an indemnity costs award rather than a meaningful invitation to compromise. The defendant also submitted that she had raised important arguments with very real merits, characterising her points as “entirely reasonable”, and that the offer was underspecified, confusing, equivocal or indistinct. On the interest rate on costs, the defendant submitted, on a contingent basis, that 1% above base rate was appropriate. On interest on the debt, the defendant raised a pleading objection, submitting that interest had not been pleaded as required by CPR Part 16 and should therefore not be awarded. On the payment on account, the defendant submitted that the lowest figure in the likely range was no more than 55%, criticising the scale of the costs incurred by the claimant.

The Court’s Decision

Part 36 consequences | was it unjust to apply CPR 36.17(4)?

The court confirmed the well-established starting point that the burden of establishing injustice rests on the unsuccessful party, and that this burden represents a formidable obstacle. The court cited ABFA Commodities Trading Ltd v Petraco Oil Company [2024] EWHC 706 (Comm) and the frequently cited passage from Briggs J in Smith v Trafford Housing Trust [2012] EWHC 3320 (Ch), to the effect that the court does not have an unfettered discretion to depart from the ordinary costs consequences under Part 36, and that to hold otherwise would undermine the salutary purpose of the regime in promoting compromise and avoiding unnecessary expenditure of costs and court time.

The court also noted the need for vigilance against very high settlement offers being used strategically, as a device to secure an indemnity award rather than as a genuine attempt to settle. However, on the facts, the court rejected the defendant’s submission that the offer fell into that category. The court accepted that a discount in the early 90% range was justified given the strength of the claimant’s case. The claimant had a rational and reasonable basis to conclude that his prospects were strong, and a discount of just under 10% was therefore sober and realistic rather than tokenistic or illusory. The court did not accept that the binary nature of recognition and enforcement claims rendered a high offer inappropriate. Binariness is inherent in such claims, and the more pertinent factor was the strength of the claim itself.

The court also rejected the defendant’s characterisation of her own arguments as having “very real merits” or being “entirely reasonable”. Some of her arguments had poor prospects of success, some legal points were raised and then disappeared with little more, and the family law aspects of her case were described as particularly unconvincing. The court further rejected the submission that the offer was underspecified, confusing, equivocal or indistinct, noting that it was perfectly clear that the offer related to the King’s Bench claim, and that clarification had been provided when requested.

The court also noted that the defendant had applied very late in the day to amend her initial defence, a recognition of the limitations of her original position, but the amended defence fared no better and had obvious weaknesses of its own. It was to the credit of the claimant’s legal team that even though it could have applied to adjourn the trial in light of the amendment, it determined to retain the trial listing and do its best to avoid incurring yet more costs.

Taking into account all the circumstances under CPR 36.17(5), the court concluded that the defendant had not come close to establishing that it would be unjust to order the CPR 36.17(4) consequences. The court also noted, by reference to the passage from Briggs J in Smith v Trafford, that the essential purpose of Part 36 is to visit costs consequences upon parties of whom it can properly be said that they ought to have settled by accepting the other party’s offer, rather than taken the matter to trial. The defendant had a reasonable and realistic opportunity to accept a genuine settlement offer from the claimant. She failed to take it. Instead, she persisted in a case that was materially flawed in key respects, with some parts of it largely devoid of merit.

Enhanced interest on costs | what rate?

The parties disputed the rate of interest to be granted on costs. The maximum is 10% above base rate. The claimant applied for 8%. The defendant, on a contingent basis, submitted that it should be 1%. The court rejected the defendant’s proposal as unrealistically low. However, the court also considered 8% to be too high, noting that while the defendant took a series of bad points, not all of them were fundamentally flawed or highly likely to fail, and that the court was not persuaded that in the three months from offer to trial the disruption to the claimant was as acute as he maintained. The correct interest figure was held to be 6% above base rate.

Interest on the debt | the pleading point

The defendant submitted that interest on the debt should not be awarded since it had not been pleaded by the claimant as required by CPR Part 16. The court rejected this objection. The short point was that CPR 16.1 makes plain that Part 16 is inapplicable to a Part 8 claim, which this was. In any event, the Court of Appeal had considered the question of a failure to plead interest in El Ajou v Stern [2006] EWCA Civ 120, in which Carnwath LJ held that a pleading failure is not necessarily fatal to a claim for interest, and that where the point had been raised, the judge could give leave to amend on appropriate terms if necessary. The court exercised its discretion to award interest on the debt at a commercial rate of 5% from the date of the second Russian judgment (11 October 2023) to the expiry of the relevant period.

Payment on account | what percentage?

Approximately 70% of the costs incurred (exclusive of VAT) fell to be assessed on an indemnity basis as a Part 36 consequence. In accordance with Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm), per Christopher Clarke LJ at paragraphs 23 to 24, the court was required to arrive at a “reasonable sum” of likely recovery, allowing for uncertainty and margin for error.

Given the level of interest granted combined with the indemnity basis also granted, the court judged that there were good prospects that the claimant would recover 65% of his costs following detailed assessment. This was close to what the claimant might expect on a standard assessment. As to the defendant’s criticism of the scale of the costs incurred by the claimant, the court had fully in mind the scale of the work necessitated by the diffuse array of objections to recognition and enforcement the defendant placed before the court. It took the court over 100 pages of trial judgment to deal with them. The claimant had no option but to undertake the necessary professional work to meet the shifting and expanding case, some aspects of which were first ventilated, or particularised in detail, as the trial was imminent. The court rejected the defendant’s submission that the lowest figure in the likely range was no more than 55%.

Conclusion

The court ordered standard basis costs up to the expiry of the relevant period and indemnity basis costs thereafter. On interest, the court ordered: interest on the debt at 5% from the second Russian judgment (11 October 2023) to the expiry of the relevant period, then at 6% above base rate thereafter; interest on costs incurred prior to the expiry of the relevant period at 5%; interest on costs incurred after the expiry of the relevant period at 6% above base rate; interest on costs incurred after judgment at 6% from the date the cost was incurred; and interest on the debt at 8% from the date of the order for payment until payment under the Judgments Act 1838. The court also ordered a 10% additional payment under CPR 36.17(4)(d)(ii) and a payment on account of 65% of costs. The court also refused both applications for a stay of enforcement, finding that the balance of prejudice fell decisively in favour of the claimant and that there was a real risk of dissipation by the defendant.

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The King’s Bench Division’s decision in Lodhia v Twelve Trees Management Company (Bromley-by-Bow) Limited & Ors [2026] EWHC 1177 (KB) addresses the costs consequences of discontinuance where a claimant sought to displace the usual rule under CPR 38.6 on multiple grounds.

Background

Mr Amar Lodhia, a leaseholder at the Maltings residential estate in East London, brought defamation and malicious falsehood claims against five defendants: Twelve Trees Management Company (Bromley-by-Bow) Limited (“TTMC”), the corporate entity managing the estate; Urang Group Limited trading as Urang Property Management (“Urang”), the property management company; and three individual residents who were also TTMC directors, Mr Thomas Squires (the third defendant), Mr Andrew Cregan (the fourth defendant), and Mr Tasleem Malleck-Amode (the fifth defendant). Mr Lodhia described himself as a legal consultant, social entrepreneur, and public interest advocate. He worked as a supervised legal consultant at JSC Chambers and was undertaking a postgraduate degree at the University of Law.

The claim arose from a newsletter sent to leaseholders on 6 March 2025, authored by Mr Squires and distributed by Urang. The newsletter criticised Mr Lodhia’s litigation activities, accused him of lying and making baseless allegations, stated that he was bankrupt and had no formal legal training, and referred to a previous general civil restraint order made against him. It encouraged leaseholders to seek independent legal advice before acting on his recommendation to withhold service charge payments.

Proceedings were issued on 15 May 2025. The original Particulars of Claim sought damages for defamation and malicious falsehood against all five defendants in relation to eleven statements in the newsletter. Mr Lodhia had been made bankrupt on 10 June 2024 and was automatically discharged on 10 June 2025, meaning the claim was issued during his bankruptcy.

Rather than filing a defence, the TTMC defendants applied on 15 July 2025 for summary disposal, seeking: a declaration under section 10 of the Defamation Act 2013 that the court lacked jurisdiction to hear defamation claims against the fourth and fifth defendants; strike-out or summary judgment on remaining claims against those defendants; strike-out or summary judgment on the malicious falsehood claim against the first and third defendants; and strike-out of paragraphs concerning the defendants’ insurance position. By order dated 13 November 2025, Steyn J listed the summary disposal application and a trial of preliminary issues as to meaning for hearing on 21 and 22 January 2026.

On 11 January 2026, Mr Lodhia applied to amend his Particulars of Claim. The proposed amendments deleted the fourth and fifth defendants entirely, abandoned all malicious falsehood claims, reduced the statements complained of from eleven to six, and removed the paragraphs concerning insurance. This conceded the summary disposal application in its entirety, despite Mr Lodhia having previously described it as “misconceived”.

On 15 January 2026, Mr Lodhia applied to postpone the January hearing, which was granted on 19 January 2026 by Collins Rice J, who attached particular weight to a letter from Dr Myrto Tsakopoulou, a Complex Emotional Needs and Complex Trauma Lead Psychologist at East London NHS Foundation Trust, dated 15 January 2026. That letter stated that Mr Lodhia’s treatment had been extended and that he was required to attend hospital on Thursdays, one of which fell during the listed hearing dates. The defendants subsequently raised questions about the authenticity of that letter.

A relisting appointment took place on 12 February 2026, which Mr Lodhia failed to attend. By order dated 16 February 2026, the matter was relisted for 6 and 7 May 2026. On 19 February 2026, Mr Lodhia applied again to postpone the May hearing on the grounds that his preferred counsel, Mr Chiffers, was unavailable. On 4 April 2026, he applied for a stay of proceedings until 30 September 2026 to facilitate mediation. Both applications were refused by Steyn J on 17 April 2026.

On 29 April 2026, Mr Lodhia made a further application to postpone the May hearing, supported by his tenth witness statement, which explained that he had only recently become aware that he was required to sit oral assessments at the University of Law on 6 and 7 May. Steyn J refused the application as originally framed but, in light of a subsequent witness statement indicating that the 6 May assessment could be rescheduled, ordered that the hearing proceed on 6 May only. She also expressed concerns about the authenticity of documents exhibited by Mr Lodhia and the truthfulness of his witness statement, and made directions for further evidence to address those concerns.

On 30 April 2026, Mr Lodhia filed a notice of discontinuance of the entire claim. Steyn J directed that the 6 May hearing be shortened to half a day to deal with consequential matters and outstanding costs issues. The hearing before Linden J took place on 6 May 2026. Mr Lodhia appeared in person. Jonathan Price KC and Percy Preston appeared for the TTMC defendants, instructed by rradar Limited. Greg Lazarev of Lazarev Cleaves LLP appeared for Urang. Judgment was handed down on 18 May 2026.

Costs Issues Before the Court

The costs issues arising at the 6 May hearing were numerous and arose against the backdrop of Mr Lodhia’s notice of discontinuance filed on 30 April 2026. The court was required to determine the costs consequences of several distinct procedural events, as well as the applicable basis of assessment and the question of an interim payment on account.

Before turning to the substantive costs issues, two preliminary points were raised by Mr Lodhia. First, he argued that his trustees in bankruptcy, Begbies Traynor, and his father (who held a lasting power of attorney over his property and financial affairs) should have been served before any costs determination could be made. Second, he contended that he was not personally liable for any adverse costs order, on the basis that such liability would attach to the bankruptcy estate. The court dealt with both points as threshold matters before proceeding to the substantive costs questions.

The substantive costs issues were: first, the costs of the summary disposal application brought by the TTMC defendants on 15 July 2025, which was effectively conceded by Mr Lodhia’s amendment application of 11 January 2026; second, the costs of the three applications to postpone hearings and the application for a stay, all made by Mr Lodhia; third, the costs consequences of the notice of discontinuance filed on 30 April 2026, with the central question being whether the presumption under CPR Rule 38.6 should apply or whether the court should “order otherwise”; fourth, whether any costs awarded in the defendants’ favour should be assessed on the indemnity basis; and fifth, whether an interim payment on account of costs should be ordered pursuant to CPR Rule 44.2(8) and, if so, in what sum.

The indemnity basis issue was ultimately not pursued by Mr Price KC at the hearing, on the basis that liberty to apply would be preserved pending the outcome of the further evidence directed by the court. The remaining issues were determined on the evidence before the court on 6 May.

An additional procedural matter arose from the TTMC defendants’ invitation to the court to make directions for further evidence in light of concerns about the veracity of certain evidence given by Mr Lodhia and the authenticity of certain documents produced by him. These concerns went beyond those already addressed in Steyn J’s 29 April Order and formed a significant part of the hearing.

The Preliminary Issues

Bankruptcy

Mr Lodhia’s position throughout the proceedings was that he was not personally liable for any adverse costs order and that such liability would attach to the estate in bankruptcy. He relied on sections 283 and 306 of the Insolvency Act 1986 and submitted that the trustees should be given the opportunity to respond to what he called “the potential non-party costs order”.

Linden J rejected this argument. The judge held that any order against Mr Lodhia would not be a bankruptcy debt or liability for the purposes of section 382 of the Insolvency Act or Part 14 of the Insolvency Rules 2016, given that there was no relevant “obligation incurred before the commencement of the bankruptcy”. The newsletter was not written until after his bankruptcy, and any order would be made long after the bankruptcy and his discharge from it.

In any event, the trustees had been aware of the proceedings for some time and had not expressed any wish to participate or make representations. Their view, which the court shared, was that Mr Lodhia was liable in respect of any order for costs against him and they were not. The court noted that if Mr Lodhia thought the trustees should be before the court, it was open to him to take steps to bring this about.

Lasting Power of Attorney

Mr Lodhia argued that his father should have been served in accordance with CPR Rules 6.13 and 6.25 because he had entered into a lasting power of attorney with his father in respect of his property and financial affairs. He submitted that he was a “protected party” to whom CPR Rule 21 applies.

Linden J rejected this argument. There was no evidence that Mr Lodhia lacked capacity or had lacked capacity at any stage of the litigation. His Particulars of Claim and other documents boasted in detail of his alleged public profile, abilities and successes. He described himself as working as a legal consultant at JSC Chambers, being responsible for day-to-day handling of leaseholder disputes, having considerable success in pre-action litigation, and having brought at least two other claims in his own name.

While Mr Lodhia described himself as disabled and vulnerable, and submitted evidence from Dr Tsakopoulou stating that he had complex post-traumatic stress disorder and required reasonable adjustments, Dr Tsakopoulou did not suggest that Mr Lodhia lacked capacity to conduct the proceedings. The judge observed that the evidence fell far short of establishing lack of capacity, and that Mr Lodhia’s performance at the hearing cast real doubt on whether he continued to experience the impairments identified by Dr Tsakopoulou.

The Costs of the Summary Disposal Application

Mr Lodhia sought dismissal of the summary disposal application on the ground that it was “otiose” in light of his proposed amendments, and sought his costs of that application and the amendment application on the basis that the defendants had failed to comply with the Pre-Action Protocol for Media and Communications Claims (“the PAP”).

In his fourth witness statement, dated 10 January 2026, Mr Lodhia said he had sent a letter to the solicitors for TTMC on 6 March 2025 which complied with the PAP, and a further letter of claim to TTMC and Urang on 7 March 2025 by first class post. He stated that no defendant responded at all to either letter of claim, and there was no acknowledgement, substantive response, or engagement of any kind with the Protocol. As he had no factual confirmation as to which individual defendants authorised, edited, approved or authored the newsletter, he was forced to plead on the basis of reasonable inference. He sought further information in July 2025 but did not receive it until he read the witness statements supporting the summary disposal application. The defendants should therefore pay his costs.

The defendants’ position was that there was no breach of the PAP, nor any failure to engage in pre-action correspondence. The amendment application conceded the summary disposal application and discontinued against the fourth and fifth defendants. Mr Lodhia should pay the costs of the summary disposal application and the costs thrown away by reason of the amendments regardless of the outcome of the application for costs on the subsequent discontinuance of the proceedings as a whole.

Linden J agreed that Mr Lodhia should pay the defendants’ costs of the summary disposal application, the discontinuance against the fourth and fifth defendants, and the amendment application in any event. The judge did not accept that there was any breach of the PAP by the defendants, nor any failure to engage reasonably with Mr Lodhia in correspondence. Even if this was wrong, the judge did not accept that this made any difference to Mr Lodhia’s approach to starting, pleading and pursuing his case. His approach in the correspondence to the arguments which subsequently formed the basis of the summary disposal application was also unreasonable and directly gave rise to the need to make that application.

The PAP does not specifically require a prospective claimant or defendant to identify who authorised, edited, approved or authored the publication, nor does CPR Practice Direction 53B specifically require these matters to be pleaded. The principal target of the claim in defamation is the publisher of the statements complained of. In this case the publisher was TTMC, as was apparent on the face of the newsletter and as Mr Lodhia was well aware.

There was an issue as to whether Mr Lodhia actually asked who authorised, edited, approved or authored the newsletter prior to commencing proceedings. In the 6 March 2025 pre-action letter, the furthest he went was to seek “a written explanation of how these defamatory statements were approved for publication and by whom”. There was also an issue as to whether the second pre-action letter of 7 March 2025 was really sent, given that it was sent by post only and not by email, and the defendants’ evidence was that it was not received.

Even assuming the 7 March letter was posted and received, the judge did not accept that there was a failure to engage or a breach of the PAP. Rradar responded to the 6 March letter on 20 March 2025, pointing out that Mr Lodhia’s letter did not comply with the PAP in that it did not identify the specific statements complained of or give details of the serious harm alleged. Instead of providing the information requested, Mr Lodhia set a deadline of 24 March for various demands to be met. The correspondence continued, and on 24 March he stated that proceedings had been issued on CE File, despite not being under any limitation pressure.

The original Particulars of Claim, dated 25 March 2025, correctly pleaded that Mr Squires was the principal author and editor of the newsletter. The case against the fourth and fifth defendants was not pleaded simply on the basis that they were authors; it included allegations about piercing the corporate veil and particulars of the case that they were not acting as agents of TTMC. This was not a case in which the pleader based his case on an allegation that they were authors in circumstances where the true position had not been revealed to him in correspondence, and then discontinued that case when the true position became apparent.

On 13 June 2025, rradar wrote to Mr Lodhia stating that he was right to plead that Mr Squires was the author but arguing that there was no viable case against the fourth and fifth defendants. The terms of section 10 of the Defamation Act 2013 were set out, as were the flaws in Mr Lodhia’s case. The difficulties with piercing the corporate veil were also pointed out. He was invited to discontinue against the fourth and fifth defendants and told that an application would be made if he did not do so.

He did not do so. Instead, Mr Lodhia continued robustly to dismiss rradar’s arguments, to assert that the fourth and fifth defendants were personally liable, and to contest other aspects of the defendants’ position. On 26 June 2025, rradar wrote again, repeating the arguments which subsequently formed the basis for the summary disposal application and stating that they would seek instructions to make that application if he persisted. There was a further attempt to persuade Mr Lodhia on 30 June 2025, but he continued to dismiss the defendants’ arguments up to and including 15 July 2025.

The judge rejected Mr Lodhia’s argument that there was unreasonable conduct by the defendants prior to issuing the summary disposal application. He was given every opportunity to make concessions which would avoid the need for an application to the court, but he did not do so. If anyone was unreasonable it was Mr Lodhia in filing his claim so soon and then failing to engage with the defendants’ arguments, which were clearly explained to him but ignored.

As to causation, Mr Lodhia accepted that the position was clear from the witness statements served in support of the summary disposal application. However, this did not cause him to reflect or alter his approach. On 15 July 2025 he immediately responded that the defendants’ arguments were “misconceived”. On 20 August 2025, he filed a formal response which again described the summary disposal application as “misconceived” and continued to assert his claims as pleaded. It was not until 11 January 2026 that he indicated he wished to concede the summary disposal application.

When asked why, if the information he said he sought was critical, he did not discontinue shortly after 15 July when he had this information, Mr Lodhia told the court that he understood he had been ordered or required to resist the summary disposal application by Master Armstrong’s Order of 16 December 2025. The judge regretted to say that he did not regard this answer as truthful, not just because Master Armstrong’s Order did not require him to do any such thing, but also because the Order postdated by a number of months his decision to take the position that the summary disposal application was “misconceived”.

The judge was satisfied that Mr Lodhia should pay the costs of the summary disposal application given that the defendants were wholly successful. He should also pay the fourth and fifth defendants’ costs of the proceedings given that he discontinued against them: there was no change of circumstances and no unreasonable conduct on their part. He should pay the costs thrown away by reason of his application to amend given that the need to amend arose through his approach to the proceedings.

The Costs of the Postponement and Stay Applications

Mr Lodhia made three applications to postpone hearings and one application for a stay. The first postponement application, made on 15 January 2026, was granted by Collins Rice J on 19 January 2026. She attached particular weight to medical evidence in the form of a letter from Dr Tsakopoulou dated 15 January 2026, stating that Mr Lodhia’s treatment had been extended and he was required to attend hospital on Thursdays, one of which fell during the listed hearing dates.

By the time of the 6 May hearing there was an issue as to the authenticity of Dr Tsakopoulou’s letter, given that until his application on 15 January 2026, the basis for saying a postponement was required was the non-availability of Mr Chiffers. Before this, Mr Lodhia did not mention the need to attend hospital although the defendants said he must have been aware of it in December.

Linden J was willing to assume for present purposes that the 15 January 2026 letter was entirely genuine. Even on this assumption, however, Mr Lodhia should pay the costs of the first application to postpone. His emails of 22 December 2025 first proposed the postponement on the grounds that he had instructed counsel who was not available for the hearing. Insofar as that was the true reason for his application, it was an unreasonable basis for a postponement and the defendants were fully entitled to refuse to agree. Even taking his evidence about the need to attend hospital at face value, his application succeeded on a ground introduced very late in the day. The defendants’ skeleton argument had been filed on 14 January and preparations were necessarily well advanced. The just course was to order that Mr Lodhia pay any costs thrown away by reason of the postponement.

On 19 February 2026, Mr Lodhia applied to postpone the May hearing on the grounds that Mr Chiffers was not available. On 4 April 2026 he issued an application to stay the proceedings until 30 September 2026 to facilitate mediation. On 17 April 2026, both applications were refused by Steyn J. She referred to the 15 January application and noted that Mr Lodhia had failed to attend the listing appointment on 12 February 2026. She found that he had no reasonable excuse for failing to do so, particularly given that the hearing was being relisted at his request. She noted that there had been delay in the proceedings and that Mr Lodhia had had plenty of time to instruct alternative counsel or represent himself. She noted that the defendants were willing in principle to engage in mediation but agreed with them that this did not mean the proceedings should be stayed given the delays.

Linden J was satisfied that the costs of the second postponement application and the application for a stay should be borne by Mr Lodhia given that both applications failed.

On 29 April 2026, Mr Lodhia filed a further application to postpone the May hearing, supported by his tenth witness statement dated 24 April 2026. The application notice appears to have been signed by Mr Chiffers as his representative although Mr Lodhia conducted the correspondence. This explained that on 21 April 2026 he had become aware that he was required to attend oral assessments at the University of Law on 6 and 7 May 2026. He had attempted to reschedule these assessments but had been told by the Programme Lead, Ms Salome Verrell, that they could not be rescheduled.

In response, the defendants filed evidence casting doubt on the veracity of what Mr Lodhia had said in his tenth witness statement and questioning the completeness of the documents he had exhibited. Mr Lodhia then submitted an eleventh witness statement dated 29 April 2026, explaining that on 29 April he had been told that the oral assessment on 6 May could be rescheduled and he was therefore able to attend on that day but not on 7 May. His position was now that the preliminary issues as to meaning could be determined but that the issues as to costs should be postponed.

On 29 April 2026, Steyn J refused Mr Lodhia’s application as framed but, in light of his eleventh witness statement, ordered that the hearing would take place on 6 May 2026 starting at 10am. She expressly refused Mr Lodhia’s request to postpone the hearing of the issues in relation to costs. She also expressed concerns about the authenticity of certain documents exhibited by Mr Lodhia and the truthfulness of his witness statement, and made directions for further evidence to allay those concerns.

Mr Lodhia argued that his application was successful because the defendants resisted it and argued that one day would not be sufficient. Linden J held that his application was not successful in that the hearing was not vacated, as he originally asked. He did then modify his application but unsuccessfully argued that it should not deal with the issue of costs. On balance the judge took the view that he should pay the costs of this application.

The Costs of Discontinuing the Claim

Following Steyn J’s 29 April Order, on 30 April 2026 at 7.55am Mr Lodhia sent a letter offering a drop hands settlement. At 6.14pm, he emailed the defendants’ solicitors a signed notice of discontinuance of the whole claim. The covering email said that any application for costs would be resisted and referred to Mr Squires’ comments at the AGM on 29 April as unreasonable conduct relevant to costs under CPR Rule 44.2. Mr Lodhia also said that if the defendants sought their costs he intended to issue a further claim based on Mr Squires’ actions. The email concluded that the relentless nature of the litigation, and in particular Mr Squires’ actions, had had a profound and serious effect on Mr Lodhia’s health. The email did not suggest that the actions of Mr Squires, or the alleged position in relation to Mr Lodhia’s health, had caused him to decide to discontinue. No explanation for this decision was provided.

Mr Lodhia argued that the usual consequences of discontinuing proceedings, as set out in CPR Rule 38.6, should not follow. He put forward a number of reasons why the presumption identified in this rule was rebutted and the defendants’ costs should be disallowed.

Linden J applied the principles set out by Moore-Bick LJ in Brookes v HSBC Bank plc [2011] EWCA Civ 354. These provide that when a claimant discontinues, there is a presumption that the defendant should recover costs; the burden is on the claimant to show a good reason for departing from that position; the fact that the claimant would or might well have succeeded at trial is not itself a sufficient reason; if it is plain the claim would have failed, that is an additional factor in favour of applying the presumption; the mere fact that the claimant’s decision to discontinue may have been motivated by practical, pragmatic or financial reasons will not suffice to displace the presumption; if the claimant is to succeed in displacing the presumption he will usually need to show a change of circumstances to which he has not himself contributed; however, no change in circumstances is likely to suffice unless it has been brought about by some form of unreasonable conduct on the part of the defendant which in all the circumstances provides a good reason for departing from the rule.

At paragraph 10 of Brookes, Moore-Bick LJ stated that “a claimant who seeks to persuade the court to depart from the normal position must provide cogent reasons for doing so and is unlikely to satisfy that requirement save in unusual circumstances.”

The judge also referred to Nelson’s Yard Management Co v Ezieful [2013] EWCA Civ 235, in which Beatson LJ stated that “the context for the Court’s mandatory consideration of all the circumstances under CPR 44.3 is the determination of whether there is a good reason to depart from the presumption imposed by CPR 38.6.”

The judge proceeded on the assumption, derived from Scheinberg v Van Doorn [2019] EWHC 3220, that it was open to him to disallow the defendants’ costs or make an order in Mr Lodhia’s favour even without a change of circumstances, if there was unreasonable conduct on the defendants’ side. This gave Mr Lodhia the most favourable possible analytical framework.

The judge considered Mr Lodhia’s arguments individually and cumulatively but held that they did not amount to a relevant change of circumstances brought about by unreasonable conduct on the part of the defendants which in all the circumstances provided a good reason for departing from the rule. Nor did they amount to unreasonable conduct on the part of the defendants which would cause the court to disallow their costs in whole or in part.

The judge briefly addressed Mr Lodhia’s key arguments.

- - First, the alleged late disclosure of information as to authorship, editorship and publisher details, breaches of the PAP and failure to engage with the issues in correspondence had already been dealt with in the context of the summary disposal application. Insofar as the service of the statements of the third to fifth defendants in support of the summary disposal application was a relevant change of circumstances (which it was not), it occurred more than nine months before discontinuance. There was no unreasonableness on the part of the defendants in this regard.
  - Second, Mr Lodhia alleged that the defendants’ position on meaning had shifted in relation to two of the six statements complained of, adding to the costs of the preliminary trial as to meaning. There was nothing in this point. The defendants’ position did not materially shift and in any event their approach had no significant impact on costs. It was Mr Lodhia’s approach to pleading the statements complained of (complaining of eleven statements and then reducing this to six several months later) which unnecessarily increased the costs.
  - Third, Mr Lodhia relied on Mr Squires’ alleged defamatory statements about him at the 29 April AGM. It appeared that Mr Squires referred to the litigation and made uncomplimentary remarks which Mr Lodhia argued were implicitly about him. Assuming for present purposes that Mr Lodhia’s account and interpretation were accurate, the judge accepted that this was a recent development but did not regard it as a relevant change of circumstances. Mr Squires’ remarks were a reason for Mr Lodhia to continue with the claim rather than discontinue. Whatever Mr Squires said or implied on 29 April did not cause Mr Lodhia to discontinue. Rather, having decided that he wanted out of the litigation he alighted on this as a lever to use in an attempt to secure a drop hands settlement by threatening further proceedings, and to avoid paying the costs of the proceedings. Even if Mr Squires’ conduct was unreasonable, this was not unreasonable conduct of the litigation and in any event it had no bearing on the costs of the proceedings.
  - Fourth, Mr Lodhia relied on the fact that the defendants were insured in relation to the litigation. He said there was inequality of arms or resources between the parties. This was true but it was not a change of circumstances and did not amount to unreasonable conduct. Mr Lodhia’s own position was that he was aware the defendants were insured in December 2025. The fact that they were represented by qualified and competent lawyers may be a point of difference but this had been the position throughout the proceedings. He also said that although the defendants may be liable for the costs of their lawyers, the fact that they were insured against these costs rendered it unfair that he should have to pay them. This argument was misconceived for obvious reasons.
  - Fifth, Mr Lodhia relied on the alleged insolvency of TTMC, of which he implied he had first become aware from a report dated 9 December 2025. This, he said, was a change of circumstances. It also meant that TTMC would not be able to satisfy any adverse costs order. In fact, Mr Lodhia had a report dated 2 August 2025 which said that TTMC was insolvent. He relied on this report in his 20 August 2025 submissions resisting the summary disposal application and seeking to continue the litigation on all fronts. The insolvency issue was not a relevant change of circumstances and had no bearing on Mr Lodhia’s decision to discontinue or on the costs of the litigation. TTMC was insured against any liabilities in damages or costs, and in any event Mr Lodhia could recover against the other defendants.
  - Sixth, Mr Lodhia relied on the fact that he was discharged from bankruptcy after proceedings were issued. The judge had dealt with the bankruptcy issue above. Mr Lodhia’s discharge was not a relevant change of circumstances and did not amount to unreasonable conduct on the part of the defendants.
  - Seventh, he relied on the defendants’ refusal to accept various offers of settlement which he made and their alleged refusal to engage constructively with his proposals for mediation or other negotiation. The short answer, having considered the without prejudice materials, was that Mr Lodhia had not done better in these proceedings than any offer to settle which he made. He had recovered nothing and was liable to pay substantial costs even leaving aside the effect of his 30 April notice of discontinuance. On the other hand, the defendants did make a without prejudice save as to costs offer of settlement on 13 June 2025 which Mr Lodhia had failed to beat. They had also been prepared to engage in alternative dispute resolution through mediation. They engaged with Mr Lodhia’s proposals but it did not prove possible to reach agreement as to the terms of the mediation, let alone the terms of any settlement. There was no relevant change of circumstances and no unreasonable conduct on the part of the defendants such as would lead to any of their costs being disallowed.
  - Eighth, Mr Lodhia relied on a complaint which he had made to the Solicitors Regulation Authority about a point made in the defendants’ solicitor’s fourth witness statement. Although this would ultimately be a matter for the SRA to determine, there appeared to be nothing in the point. In any event, Mr Lodhia’s complaint and the witness statement were not a relevant change of circumstance and did not amount to unreasonable conduct on the part of the defendants such as would lead the court to disallow their costs.

The judge noted that Mr Lodhia also advanced what he described as “hopeless” arguments, including that he should not be required to pay twice given that part of the service charges which he pays goes towards TTMC’s budget for legal expenses, and that the doctrine of estoppel or approbation applied to prevent TTMC from recovering its costs. The judge observed that TTMC was entitled both to levy service charges and to claim its costs of the proceedings: there was no inconsistency and no question of double recovery.

The judge therefore ordered that Mr Lodhia would pay the costs of the proceedings up to the date of service of the notice of discontinuance. Those costs would be assessed on the standard basis, if not agreed, pending the responses to Steyn J’s 29 April Order and the judge’s directions for further evidence, and there would be liberty to apply in the light of that evidence.

Interim Payment on Account of Costs

Mr Lodhia did not advance any reason to depart from the presumption under Rule 44.2(8) that a reasonable sum should be paid on account of costs. His arguments were that no order for costs should be made in favour of the defendants and that, in any event, their Statements of Costs claimed disproportionately and unreasonably large sums. The judge held there was no good reason why an interim payment on account of costs should not be ordered in the case of both sets of the defendants’ legal representatives.

As to quantum, the judge applied the guidance given by Christopher Clarke LJ in Excalibur Ventures LLC v Texas Keystone Inc & Others [2015] EWHC 566 (Comm). Any figure ordered to be paid on account need not be “the irreducible minimum” in terms of what was likely to be recovered on a detailed assessment. A reasonable sum would often be one that was an estimate of the likely level of recovery subject to an appropriate margin to allow for error in the estimation.

As the judge understood TTMC’s Statement of Costs dated 5 May 2026, the figure of £112,779 plus VAT included the costs of the 6 May hearing rather than being limited to the costs to the service of the notice of discontinuance. In fairness to Mr Lodhia, the question whether he should pay TTMC’s costs of the 6 May hearing had not been the subject of submissions. The judge therefore reserved this issue and gave Mr Lodhia an opportunity to put in written submissions, limited to 5 pages, as to why he should not pay those costs and Urang’s costs of the hearing. The judge would then determine this matter on paper.

In the meantime, the judge worked on the rough and ready basis that approximately £25,000 of the £112,779 was in respect of the 6 May hearing so that approximately £90,000 related to the costs to service of the notice of discontinuance, which the judge treated as 30 April 2026.

Doing the best he could, the judge considered that a reasonable sum at this stage in respect of the costs to 30 April was £55,000 plus VAT. Although this was not a legally complex case, it was made more complex and expensive by Mr Lodhia’s approach. There were multiple emails, letters and witness statements from him generating voluminous material which required to be considered and responded to as appropriate. There were also the applications which generated additional costs, and there was the late postponement of the hearing in January. These considerations meant that the TTMC Defendants might well recover significantly more than £55,000 on a detailed assessment.

As for Urang’s costs, Mr Lodhia’s submission was that Lazarev Cleaves LLP had not been sufficiently involved to justify the figure of £7,364 plus VAT which was claimed. Mr Lazarev explained that in fact Urang’s costs could have been significantly higher. They instructed Counsel to advise them and thereafter had a watching brief in the sense that they were content for rradar and the TTMC Defendants to “make the going” rather than duplicate their efforts. Urang’s costs related principally to consideration of Mr Lodhia’s correspondence and witness statements. The judge rejected Mr Lodhia’s argument that Urang should not recover any of its costs.

As the judge understood Urang’s Statement of Costs, their costs to 30 April 2026 were in the order of £6,000 plus VAT. A reasonable sum at this stage in respect of those costs assuming assessment on a standard basis was £3,600 plus VAT.

Directions for Further Evidence

The judge made extensive directions for further evidence to address concerns about the veracity of certain evidence given by Mr Lodhia and the authenticity of certain documents produced by him. The judge explained to Mr Lodhia that Steyn J’s 29 April Order and these directions were not just relevant to the question whether costs should be assessed on the indemnity basis. Depending on what the evidence in response said, consideration might in due course be given to the question of proceedings for contempt of court. The judge expressly warned at paragraph 115 of the judgment that this possibility existed.

The directions covered: compliance with Steyn J’s 29 April Order; the 6 and 7 March 2025 letters of claim and associated certificates of service; Mr Lodhia’s dealings with Begbies Traynor; Dr Tsakopoulou’s letters; the role of Joseph Chiffers; and Mr Lodhia’s father’s role under the lasting power of attorney. The judge directed that the Order be served by the Defendants rather than by Mr Lodhia, noting that the experience in relation to Steyn J’s 29 April Order demonstrated that it would be “cleaner” for him not to be involved in the various witnesses’ compliance with the Order. This would ensure transparency and confidence in relation to the reliability of the responses received.

The judge gave liberty to apply to Begbies Traynor, Dr Tsakopoulou and Mr Chiffers to vary, set aside or stay the Order so far as it affected them, given that the Order had been made without giving them an opportunity to make representations.

CPR 38.6: Discontinuance And Costs – The Legal Principles

CPR 38.6 | Default Rule Disapplied On Discontinuance

CPR 38.6 | Post-Discontinuance Conduct Can Be Considered

CPR 38.6 Presumption Partially Displaced By 20% Due To Collateral Use Of Witness Statements

MEX Group v Ford | Costs After Discontinuance and Contempt

Indemnity Basis Costs Following Discontinuance

Indemnity Costs Awarded After Contempt Proceedings Used As Commercial Pressure

Commercial Litigation, Detailed Assessment, Indemnity Costs, New Costs Blog, Payment on Account

The High Court’s decision in Bargain Busting Ltd v Shenzhen SKE Technology Company Ltd [2026] EWHC 1146 (Ch) addresses the basis and quantum of costs following dismissal of a contempt application that the court found had been used to weaponise the criminal jurisdiction to pursue the applicant’s private interests.

Background

These proceedings arose from a contempt application brought by Bargain Busting Limited (“BBL”) against Shenzhen SKE Technology Company Limited, Stobbs IP Limited, Wan-Yi Tsai, and Jixuan Si. The contempt application was started in August 2025 and concerned allegations that the respondents had interfered with the administration of justice by writing to the Intellectual Property Office (“IPO”) to request that it delay registration of a trade mark pending the outcome of an application for permission to appeal to the Court of Appeal. The respondents included both the first defendant company and the solicitors and fee earners who had acted on its behalf, namely Stobbs IP Limited and two of its lawyers.

The substantive hearing took place before HHJ Paul Matthews, sitting as a Judge of the High Court in the Business and Property Courts in Bristol. On 23 April 2026, judgment was handed down ([2026] EWHC 933 (Ch)) dismissing the contempt application, together with associated strike out applications and a joinder application. The court commented adversely in that judgment on the use of the contempt jurisdiction in the circumstances of the case.

Following the handing down of the main judgment, written submissions were invited on consequential matters, including the basis of the costs order, the mode of assessment, whether a payment on account should be ordered, and permission to appeal. A clip of correspondence and attendance notes was also placed before the court for the purposes of those consequential matters. The consequential judgment was handed down on 13 May 2026.

BBL was represented by Aidan Eardley KC, instructed by Brandsmiths. The respondents were represented by Fiona Horlick KC and Charlotte Elves, with Kingsley Napley LLP acting for the first respondent and Hickman and Rose acting for the remaining respondents.

Costs Issues Before the Court

BBL accepted that it had been unsuccessful in the strike out applications, the contempt application, and the joinder application, and did not resist an order that it pay the respondents’ costs. The live issues before the court on consequential matters were therefore: first, whether those costs should be assessed on the standard basis or the indemnity basis; second, whether the costs should be subject to summary assessment or detailed assessment; and third, whether a payment on account should be ordered and, if so, in what amount. A fourth issue, namely permission to appeal, was also addressed.

The claimant calculated the total costs claimed by the respondents across their costs schedules as some £293,460. The court corrected this to £296,099.61 plus applicable VAT on the costs of Hickman and Rose, producing a total of £322,628.77. The respondents sought indemnity costs, relying on the conduct of BBL and its solicitors during the course of the litigation. BBL resisted the indemnity basis and submitted that, in any event, the costs should be subject to detailed assessment rather than summary assessment, and that no payment on account was appropriate.

The Parties’ Positions

The respondents’ position on the basis of assessment

The respondents argued that costs should be assessed on the indemnity basis. They contended that BBL by these proceedings had sought to weaponise the contempt jurisdiction against the defendants, to drive a wedge between the defendants and their lawyers, to strike fear and loss of professional status amongst the defendants’ lawyers, and to boast to the IP legal market.

The respondents relied on a number of features of BBL’s conduct during the litigation. First, an open offer of settlement had been made in August 2025, on the basis that BBL would discontinue and pay the respondents’ costs on the indemnity basis. That offer was maintained at various points and was not withdrawn until January 2026. Second, at a directions hearing on 16 January 2026, Trower J had remarked that the weaponisation of the contempt jurisdiction was a problem and that the application appeared to fall squarely into that category. Third, a letter dated 23 January 2026 from BBL’s solicitors had, in the respondents’ submission, threatened to report the second to fourth respondents to the Solicitors Regulation Authority unless the defendants agreed to pay BBL’s costs incurred in connection with the trade mark applications. Fourth, a without prejudice save as to costs telephone call on 11 March 2026 had, in the respondents’ submission, revealed that the contempt proceedings had been issued as a form of pressure on the defendants to cease attempting to persuade the IPO to delay registration of the trade mark.

BBL’s position on the basis of assessment

BBL submitted that the court had made no findings in the main judgment that its applications were abusive, or any other findings capable of taking the case out of the norm. It argued that the August 2025 offer was not a genuine offer to settle, as it required BBL to discontinue and pay costs on the indemnity basis. It also submitted that the respondents had not referred in correspondence to the points which ultimately succeeded, and had not made strike out applications until January 2026. As to the January 2026 letter, BBL submitted that it did not contain a threat to report the respondents to the SRA; rather, it explained that the conduct alleged would, if well-founded, amount to breaches of the SRA Code, and provided reassurance that BBL would not raise those matters in another forum if the contempt application were settled. BBL further submitted that the telephone call of 11 March 2026 had been mischaracterised, and that it represented a genuine attempt to resolve the proceedings.

Mode of assessment

The respondents submitted that summary assessment was appropriate, relying on paragraph 9.2 of CPR PD44, which provides that the court should make a summary assessment at the conclusion of a hearing lasting not more than one day. The hearing had lasted less than one day. BBL submitted that detailed assessment was appropriate, primarily because of the size of the costs claimed.

Payment on account

BBL submitted that a lack of clarity about the respondents’ costs made a payment on account inappropriate. The respondents sought a payment on account. BBL also raised points about duplication of effort between Stobbs IP and Kingsley Napley, both of whom had acted for the first respondent, and about the rates claimed in the costs schedules.

The Court’s Decision

Indemnity costs

The court ordered costs on the indemnity basis. HHJ Matthews confirmed that it was not necessary for the main judgment to have made findings on all matters relevant to the costs decision. The general conduct of the parties in litigation is not ordinarily an issue for determination in the substantive judgment, and the court may make supplementary findings for the purpose of consequential matters after giving the parties an opportunity to be heard. The court noted that it had, in any event, commented adversely on the weaponisation of the contempt jurisdiction in paragraphs 33 to 34 of the earlier judgment.

The court applied the well-established principle that an award of indemnity costs is appropriate where the conduct of the paying party or the circumstances of the case take it out of the norm: Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hammer Aspden and Johnson [2002] EWCA Civ 879; Hosking v Apax Partners Ltd [2019] 1 WLR 3347, [42]. The court also noted the range of factors that may be taken into account in such an assessment, as set out in Three Rivers DC v Bank of England [2006] EWHC 816 (Comm), [25].

The court observed that the proceedings themselves were of an unusual nature, making very serious allegations against officers of the court, and potentially having far-reaching professional consequences for those officers. In terms of seriousness, the court put the allegations in the contempt application on the same level as allegations of dishonesty. The court noted that there is no presumption that a failure to make good allegations of dishonesty should normally lead to an order for costs on the indemnity basis; instead, it is a factor to take into account, and may be a reason for making such an order: Thakkar v Mican [2024] EWCA Civ 552.

Three factors were identified as particularly significant. First, the nature of the alleged contempt: writing to the IPO to request a delay in registration pending an application for permission to appeal was described as the kind of thing solicitors do routinely, and was supported by the IPO’s own published practice and decisions. The court found it difficult to understand how BBL’s solicitors could have formed the view that such conduct amounted to a criminal offence. Second, the January 2026 letter: notwithstanding BBL’s submissions, the court found, to the civil standard, that the letter was intended to be read as a threat to report the respondents to the SRA unless they agreed to BBL’s terms. Even if that intention could not be established, the letter fell to be judged by its effect on the reasonable addressee, and any reasonable addressee would have understood it as such a threat. Third, the without prejudice save as to costs telephone call of 11 March 2026: the court found that the call made clear that the claimant justified the issue of criminal contempt proceedings in August 2025 as a form of pressure on the defendants to cease trying to persuade the IPO to delay registration of their client’s trade mark. Criminal proceedings should not be used for such a purpose.

The court held that, whether or not these various factors would each individually justify an award of costs on the indemnity basis, taken together they did so overwhelmingly. The claimant made very serious allegations against the defendants, and lost. It was wrong and out of the norm for the claimant’s solicitors opportunistically to seek to use criminal contempt proceedings, in which the touchstone is the public interest in the administration of justice, in order to pursue their client’s private interests. It was wrong and out of the norm for the claimant’s solicitors to threaten the defendants with being reported to the SRA in order to persuade them to agree to their client’s terms.

Mode of assessment

The court ordered that the costs should be subject to detailed assessment. This was not simply because the amount of money involved was significant. It was because these were complex and hard-fought multi-party proceedings which had lasted about eight months. On any view, a lot of work had been done by all those involved. The fact that the hearing which put an end to these proceedings lasted less than one day did not tell the full story. Justice to both sides required a detailed assessment.

Payment on account

The court ordered a payment on account of £215,000 under CPR rule 44.8, which provides that where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so. The court applied the guidance in Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm), in which Christopher Clarke LJ stated that what is a reasonable amount will depend on the circumstances, the chief of which is that there will, by definition, have been no detailed assessment and thus an element of uncertainty. Any sum will have to be an estimate. A reasonable sum would often be one that was an estimate of the likely level of recovery subject to an appropriate margin to allow for error in the estimation.

The court noted that this was complex, high-value work carried out by specialists on both sides, which would amply justify the London 1 guideline hourly rate. The claimant’s solicitors claimed rates in their costs schedules of £1,100 and £605 for grade A, £550 and £500 for grade B, £380 and £370 for grade C, and £240 for grade D, all of which considerably exceeded the London 1 rate. In contrast, those claimed by the defendants’ and Mr Rebling’s solicitors fell partly within and partly outside the London 1 rates, whilst those for Stobbs IP itself (when acting for the first defendant) were all within the London 1 rates. The claimant made a point about duplication of effort between Stobbs IP and Kingsley Napley, both of whom acted for the first defendant. The claimant also made a point about VAT on Kingsley Napley’s costs schedule, but this had been corrected.

The court referred to Thomas Pink Ltd v Victoria’s Secret UK Ltd [2014] EWHC 3258 (Ch), in which the judge made an order for a payment on account equal to 90% of the approved budget. Given that there was no approved costs budget for these proceedings, the court considered it should be more cautious. Overall, the court considered it should build in a margin of about one third, and ordered the claimant to pay £215,000 on account of costs, to be paid to the three solicitors’ firms pro rata to their schedules of costs.

Permission to appeal

The court refused permission to appeal. Under CPR rule 52.6, in a first appeal the court may not grant permission to appeal unless either there is a real prospect of a successful appeal or there is some other compelling reason why an appeal should be heard. The phrase ‘real prospect’ does not require a probability of success (that is, more likely than not), but merely means a prospect which is ‘not unreal’: Tanfern v Cameron-MacDonald [2001] 1 WLR 1311, [21]; Re R (A Child) [2019] EWCA Civ 895, [31]. If the application passes that threshold test, however, the court is not obliged to give permission to appeal; instead it has a discretion to exercise.

The claimant put forward five grounds of appeal, each containing multiple sub-points.

First ground: public interest. This ground contained three points. The first was that the court had wrongly directed itself that the presence of a private interest rules out the possibility of a party invoking the law of criminal contempt. The court rejected this, clarifying that what it had sought to express was that it was impermissible to use criminal contempt proceedings simply for the purpose of pursuing private interests. The second point was that the court had misunderstood the significance of BBL’s submission that there is no requirement for a person who brings a contempt application as of right to demonstrate some wider public interest. The court held that even if it had misunderstood the “significance” of the submission, the claimant did not say the court was wrong to say that a wider public interest must be shown. The third point was that the court was wrong to hold that BBL could not show any sufficient public interest in prosecuting these allegations of criminal contempt. The court held that this was an evaluative judgment, essentially part of fact finding, and that appellate courts will not interfere with evaluative judgments unless compelled to do so.

Second ground: the ‘Representations’. The claimant argued that the court was wrong to break down the ‘Representations’ into indicative and subjunctive/imperative statements and to disregard the latter. The court held that this missed the point: the complaint was that the solicitors had said things that they knew to be untrue, but you cannot tell lies in making a request or issuing a command. Moreover, the court had expressly gone on to deal with the position if it were wrong to break down the ‘Representations’ in this way.

Third ground: ‘interference’. This ground contained two points. The first was that the court’s finding that there could be no arguable ‘interference’ with the administration of justice was vitiated by mischaracterisation of the claimant’s case and failure to take into account the entirety of the statements complained of in the three emails. The court held that the allegation of “mischaracterisation” was not understood, and that it could not give permission for a ground which it did not understand. To the extent that this point depended upon the second ground, it must fail. The second point was that the court was wrong to hold that there could be no interference in circumstances where the IPO alone had the power to decide to register, it knew exactly what the legal position was, and acted in accordance with its own internal guidance at the time. The court held that this was an attempt to appeal against findings of fact, but that the appellant court will not interfere with that unless it is satisfied that the judge was plainly wrong, that is, that the decision was one that no reasonable judge could have reached.

Fourth ground: ‘impropriety’. This ground contained two main points. The first was that the court had mischaracterised the impugned communications as submissions about the meaning and effect of the order of the High Court. The court rejected this, clarifying that its view was that submissions that an order of the court should not yet be implemented for some reason or another were, in this context at least, not improper. There was nothing about “submissions about the meaning and effect” of an order. The second point was that the court’s rejection of the claimant’s case on impropriety was vitiated by its finding that there was simply no real prospect of showing at the hearing of the contempt application that the third and fourth defendants were doing otherwise than asking the IPO to implement its own guidance. The claimant argued that the court was wrong to make that finding because the emails made no reference to the guidance or to the practices of the IPO, and the third and fourth defendants did not give evidence. The court held that the third and fourth defendants could not be obliged to give evidence, and had chosen not to. Realistically, the court was never going to hear from them. Accordingly, the only material before the court on which it could make a finding was the emails, the manual, the decisions of Dr Porter and their own experience as IP lawyers. On that basis the court was entitled to make its finding. Once again, the claimant was simply challenging the court’s finding of fact, and the court saw no real prospect of an appellant court overturning it.

Fifth ground: mens rea. The claimant argued that the court’s conclusion that there was no real prospect of showing that the third and fourth defendants acted with the relevant mens rea was vitiated by its finding that there was simply no real prospect of showing that they were doing otherwise than asking the IPO to implement its own guidance. The claimant argued that that finding was not open to the court, for the reasons given under the fourth ground. The court held that since the fourth ground failed, so did the fifth. The court also noted that the mens rea point was strictly unnecessary anyway.

Since none of these five grounds had any real prospect of success, the court could not give permission to appeal on any of them. The claimant did not suggest that there was any other compelling reason for an appeal, and the application was therefore dismissed.

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The Chancery Division’s decision in United Kingdom Hydrographic Office v Samyung ENC Co Limited [2026] EWHC 206 (Ch) addresses the court’s approach to summary assessment of costs, payment on account, and indemnity costs where a defendant has deliberately disengaged from proceedings.

Background

The Claimant, the United Kingdom Hydrographic Office (UKHO), an executive agency of the Ministry of Defence, brought a claim against the Defendant, Samyung ENC Co Ltd (Samyung), a South Korean company. The dispute concerned Samyung’s breach of licence agreements relating to UKHO’s Admiralty Vector Chart Service (AVCS) data. Samyung had copied, decrypted, and converted this data into its own ‘S+Map’ format, which it then installed on navigation devices sold globally and made available for download.

On 8 November 2022, Sir Paul Morgan granted summary judgment to UKHO on liability for breach of contract and ordered an inquiry as to damages (the Inquiry). Samyung was also ordered to provide Island v Tring disclosure regarding sales. Following a Costs and Case Management Conference on 29 January 2025, Master Pester gave directions for trial, including an order for Extended Disclosure by 7 May 2025. A separate order (paragraph 10 of the CCMC Order) required Samyung to provide certain information about its disclosure process (the Paragraph 10 Information) by 19 February 2025.

Samyung failed to provide the Paragraph 10 Information. On 3 March 2025, Deputy Master Arkush ordered compliance by 14 March 2025 and gave UKHO permission to apply for an unless order. Samyung again failed to comply. On 28 April 2025, Master Pester made a First Unless Order providing that if Samyung did not supply the Paragraph 10 Information by 8 May 2025, the scope of its Extended Disclosure search would be automatically defined by parameters identified in that order, drawn from UKHO’s proposals. Samyung would be required to provide Extended Disclosure on that basis together with a confirmatory statement. Samyung did not comply.

During this period, Samyung’s solicitors, Hill Dickinson, applied to come off the record in February 2025, citing financial difficulties and an intention to file for “default”. Samyung did not subsequently provide a UK address for service as required. In March 2025, Samyung applied for rehabilitation proceedings in South Korea, and an Administrator was appointed in May. The court later inferred that Samyung’s non-compliance with its disclosure obligations was not the result of oversight or forces beyond its control, but that it had chosen not to comply as part of a strategy to delay or derail the proceedings.

On 11 June 2025, UKHO issued the UO/SJ Application, seeking an unless order that, unless Samyung complied with disclosure, its Defence be struck out and judgment entered for approximately £61.7 million plus interest and costs, or alternatively summary judgment. On 15 July 2025, UKHO made a separate application (the AS Application) for prospective orders permitting alternative service of documents, given the difficulties in serving Samyung.

The hearing of the UO/SJ Application in July 2025 was vacated following a temporary stay granted by the Insolvency and Companies Court after Samyung applied for recognition of the Korean rehabilitation proceedings. That stay was lifted by ICC Judge Barber on 11 December 2025, who found the English Inquiry was the better and quicker forum to resolve quantum. Despite representations from Hill Dickinson that disclosure work was underway, Samyung took no steps to comply. In December 2025 the Korean rehabilitation proceedings were cancelled, but Samyung immediately applied for new ones. Hill Dickinson informed the court they were without instructions. Samyung did not attend the hearing on 23 January 2026.

Costs Issues Before the Court

Three costs issues arose. First, the costs of the UO/SJ Application, including the appropriate basis and summary assessment. Second, whether UKHO was entitled to its costs of the entire Inquiry if the unless order was triggered, and the amount of any payment on account. Third, the costs of the AS Application. The court was required to determine all three issues without the benefit of any submissions from Samyung.

The Parties’ Positions

UKHO sought costs of the UO/SJ Application on the indemnity basis, summarily assessed at 90% of a total Statement of Costs of £113,637.73, equating to £102,273.96. Where items on the Statement of Costs related to both the UO/SJ Application and the AS Application (such as hearing attendance), they had been apportioned 90% to the former and 10% to the latter. Indemnity costs were said to be justified because Samyung had deliberately chosen not to comply with court orders, conduct that was unreasonable to a high degree and took the case out of the norm. UKHO submitted that the hourly rates claimed were below guideline rates and the overall sum modest given the complexity of the application and an abortive hearing in July 2025.

On the Inquiry costs, UKHO sought an order that if judgment were entered following non-compliance, Samyung should pay its costs on the standard basis, together with a payment on account of £235,241.58, representing 70% of the total incurred costs of £336,059.40. That total comprised the updated Precedent H figure of £325,501.59 and £10,557.81 for the First Unless Order application, the costs of which had been reserved at the time that order was made.

For the AS Application, UKHO sought summary assessment on the standard basis in the full amount of its Statement of Costs, £13,248.09.

Samyung did not attend and filed no evidence or submissions in response to any of the costs claims.

The Court’s Decision

Costs of the UO/SJ Application

The court awarded UKHO its costs on the indemnity basis. The same findings that justified the unless order — principally the inference that Samyung had deliberately chosen not to provide disclosure as part of a strategy to delay or derail the proceedings — were held equally to justify a finding that its conduct was unreasonable to a degree sufficient to take the case out of the norm.

However, the court did not accept UKHO’s proposed figures. Recognising that only the unless order aspect of the application had been resolved at this stage (the summary judgment aspect having been adjourned to a future expedited hearing), the court applied a 20% reduction to the total Statement of Costs, rather than the 10% UKHO had proposed. The judge considered that the witness statements and skeleton argument relating to the summary judgment aspect engaged more complex legal issues than the unless order, and that a 10% reduction understated the costs properly referable to that unresolved element. Applying an 80% allowance to the total of £113,637.73 produced £90,910.18.

The court then declined to summarily assess the costs at 90% of that reduced figure, as UKHO had proposed. Even in the absence of any submissions from Samyung on the Statement of Costs, the judge considered that 80% better reflected the level of costs which were recoverable. Applying 80% to £90,910.18 produced £72,728.14, which the court rounded up to £73,000.

Costs of the Inquiry

The court confirmed that UKHO would be entitled to its costs of the Inquiry on the standard basis in the event the unless order was triggered and Samyung’s defence struck out. The judge noted that UKHO’s own draft order had omitted the qualification that costs were payable on the standard basis, a drafting point requiring correction.

On the payment on account, the court accepted that the total incurred costs of £336,059.40 were reasonably incurred, reasonable in amount, and proportionate given the scale of the claim and Samyung’s conduct throughout. The hourly rates were below guideline rates. The court was satisfied UKHO would recover at least £235,000 on a detailed assessment and ordered that sum on account, conditional on the unless order being triggered. The judge observed that in the scenario where judgment was entered following non-compliance, a detailed assessment was unlikely ever to occur, which reinforced the importance of a realistic payment on account figure.

Costs of the AS Application

The court awarded UKHO its costs of the AS Application on the standard basis. Whilst the claimed sum of £13,248.09 was modest in the overall scheme of the litigation, the judge declined to summarily assess costs at 100% of the amount claimed. Even in the absence of opposing submissions, the court applied its own judgment and assessed the costs at £11,000.

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

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Part 36 & Fixed Recoverable Costs

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Unless Order Stands | Defendants Fail To Evidence Impecuniosity After Non-Payment Of Interim Costs

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The Senior Courts Costs Office’s decision in Fieldfisher LLP v Scherbakova & Anor [2026] EWHC 104 (SCCO) confirms that parties seeking relief from unless orders on grounds of impecuniosity must adduce proper evidence, not rely on inference.

Background

The Claimant, Fieldfisher LLP, provided legal services to the Defendants, Olga Scherbakova and Alexander Scherbakov, in relation to a contentious probate claim concerning their late father’s estate, under engagement letters dated December 2022 and January 2023 [§3, §5]. The Defendants ceased instruction in August 2023 [§7]. During the retainer, the Claimant issued invoices totalling £1,944,078.48, of which a substantial balance remained unpaid [§8].

The Claimant commenced proceedings to recover the unpaid fees as a debt [§9]. In their Defences, the Defendants admitted liability to pay costs subject to reasonableness [§20–21]. On 2 December 2024, HHJ Pearce entered judgment for the Claimant for an amount to be decided and transferred the matter to the Senior Courts Costs Office for “damages to be assessed” [§48]. A directions order on 29 April 2025 set a timetable for the assessment of the disputed fees, adopting a procedure akin to CPR 46.10 by analogy, though the proceedings were not brought under the Solicitors Act 1974 [§10–12, §24].

The Claimant’s application for an interim payment was heard on 7 July 2025 [§25]. The Defendants opposed it, alleging impecuniosity, but the court was not persuaded by the evidence provided [§28–30]. Costs Judge Nagalingam ordered the Defendants to pay an interim payment on account of £741,122.85 by 5 August 2025, with summarily assessed costs of £20,000 [§33]. The judge regarded this sum—approximately 50% of the outstanding balance—as modest [§30–32].

The Defendants did not pay, apply to vary, or appeal this order [§34]. On 12 August 2025, the Claimant applied for an unless order [§35]. The Defendants said they would be unrepresented due to a lack of funds and did not attend the hearing on 1 September 2025, instead submitting written representations—a course the court later characterised as a choice rather than a necessity [§37, §142]. The court made an unless order requiring payment by 22 September 2025, failing which the Defences would be struck out and judgment entered for the full claimed sum plus interest [§42]. The Defendants again did not pay by the deadline, instead issuing the present application on 22 September 2025 [§43].

Costs Issues Before the Court

The Defendants’ application, as refined at the hearing, raised three core costs issues for determination [§2, §191]. First, whether the unless order dated 1 September 2025 should be discharged pursuant to the court’s general case management powers under CPR 3.1(7). Second, and alternatively, whether the Defendants should be granted relief from the sanctions imposed by that unless order under CPR 3.9. Third, whether the interim payment order should be varied under CPR 25.20(6) to account for security the Claimant allegedly held over the Defendants’ Belgian properties, a route which the Defendants argued could also lead to the discharge of the unless order. The Defendants had abandoned their request for permission to appeal [§189].

The Parties’ Positions

The Defendants’ Position: The Defendants contended that enforcing the unless order would cause unjust enrichment, as the Claimant would recover the full invoice value without undergoing an assessment that would likely result in significant reductions [§65–66]. They relied on a report from a costs draftsman, Mr Stuart Waters, which criticised the level of fees, suggesting duplication, excessive internal meetings, and unreasonable time [§58–63]. The Defendants argued that this report constituted a material change of circumstances—an argument the court rejected, holding that these were points always capable of being raised earlier [§59, §75, §181–184].

They maintained they were impecunious and that an unless order would stifle their defence, constituting a denial of justice [§73, §80]. They submitted that the unless order was effectively a variation of the interim payment order under CPR 25.20(6)(b) and should be discharged [§71, §78]. They also argued that the Claimant had security over Belgian properties, an assertion the court found was unsupported by reliable evidence as to value or priority [§74, §204–209].

The Claimant’s Position: The Claimant argued there had been no material change in circumstances to justify varying or revoking the unless order under CPR 3.1(7) [§92–93]. The points in Mr Waters’ report were always available to the Defendants and did not justify revisiting the orders [§84]. The Claimant stressed that the Defendants had never provided cogent evidence of impecuniosity, a point noted when making both the interim payment and unless orders [§94, §101]. The fact the Defendants could now fund leading counsel with a €200,000 loan undermined their impecuniosity claim [§97, §105].

The Claimant submitted that CPR 25.20(6) was the wrong mechanism, as the unless order was a separate sanction for non-compliance, not a variation of the interim payment amount [§82, §116]. On relief from sanctions, the Claimant argued the breach was serious and significant, the reason for default (alleged impecuniosity) was unevidenced, and all circumstances pointed against granting relief [§118–121]. The Claimant also noted the Defendants had forgone the opportunity to trigger a Solicitors Act assessment, which would have stayed the debt claim [§133–135, §162].

The Court’s Decision

Costs Judge Nagalingam dismissed the Defendants’ application in its entirety [§248].

On CPR 3.1(7) and Discharge of the Unless Order: The court applied the principles from Tibbles v SIG plc [2012] EWCA Civ 518 [§113, §193–194]. It found no basis to discharge the unless order. There was no “manifest mistake” in the order’s formulation [§196]. Crucially, there was no material change of circumstances since the order was made [§199–200]. The contents of Mr Waters’ report represented arguments the Defendants could and should have raised at the earlier hearings [§181–182, §184]. The existence of Belgian properties was known at the interim payment hearing, and the court found the purported security was of uncertain value and potentially illusory given competing claims from Belgian tax authorities [§52, §204–209]. The court noted that the only apparent change was the Defendants’ newfound ability to raise €200,000 for legal fees [§201].

On CPR 25.20(6) and Variation of the Interim Payment Order: The court rejected the argument that the unless order was a variation of the interim payment order under CPR 25.20(6)(b) [§213–214]. The two were separate orders; the unless order imposed a conditional sanction for non-compliance with the first, not an adjustment of the payment amount [§214–215]. Even if wrong on this point, the court saw no basis to discharge the order for the same reasons outlined elsewhere [§222].

On Relief from Sanctions under CPR 3.9: Applying the Denton principles [§223], the court held:

- - Stage 1: The breach (non-payment of a substantial interim costs order) was serious and significant [§227].
  - Stage 2: The reason for the breach—alleged impecuniosity—was not made out. The Defendants had consistently failed to provide “detailed, cogent and proper evidence” of their financial position, including full and frank disclosure of their means and prospects of raising funds, as required by authorities such as Michael Wilson & Partners Ltd v Sinclair [2017] EWHC 2424 (Comm) [§103–104, §231, §250]. Their evidence relied on inference rather than disclosure [§177, §254].
  - Stage 3: Considering all circumstances, relief was not justified [§233–248]. The Defendants had ample opportunity to challenge the fees via a Solicitors Act assessment but did not [§135, §237]. They ignored the interim payment order without applying to vary or appeal it [§34, §164–165]. Their non-attendance at the unless order hearing was a choice, not a necessity [§142–143, §230]. There was no public interest in allowing parties to ignore court orders based on unevidenced assertions [§236]. The Claimant’s legitimate interest in not litigating further without payment was recognised [§185].

On Impecuniosity and Unjust Enrichment: The court found the Defendants had not established impecuniosity, even to a prima facie standard [§232, §247]. The claim that enforcing the unless order would lead to unjust enrichment was rejected [§262]. The judgment sum represented a contractual debt, and the entry of judgment consequent upon the Defendants’ default was “a consequence of the default”, not unjust enrichment [§263–265]. The loss of the chance to argue reasonableness at an assessment was a direct consequence of the Defendants’ own conduct in breaching court orders [§246, §264–265]. The court also accepted the Claimant’s assurance that any recovery would be netted off against any security held [§260].

Consequently, the unless order and its sanctions remained in effect. The Defendants were ordered to pay the Claimant’s costs of the application, to be summarily assessed on the standard basis [§269].

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“Extraordinarily High” Costs With “Paucity Of Information” Result In £43 Million Payment On Account

Commercial Litigation, Disbursements, New Costs Blog, Payment on Account

The Technology and Construction Court’s decision in Município de Mariana v BHP Group (UK) Ltd & Anor [2026] EWHC 73 (TCC) provides practical guidance on determining payments on account in high-value litigation where costs evidence is limited and no costs budgeting has taken place.

Background

On 14 November 2025, the court handed down its judgment following the Stage 1 Trial of this substantial group litigation concerning liability for the collapse of the Fundão dam in Brazil [§1]. The claimants, including the Município de Mariana and numerous other individuals and entities, succeeded on key issues including strict liability under Brazilian Environmental Law, fault-based liability under the Civil Code, limitation/prescription, and the standing of the Municipalities [§2, §17]. The defendants, BHP Group (UK) Ltd and BHP Group Limited, were unsuccessful on those core points.

A consequentials hearing was listed to determine matters arising from that judgment [§3]. The parties were unable to agree on costs, leading to the need for the court’s determination on several consequential issues.

Costs Issues Before the Court

The court was required to determine five principal matters following the Stage 1 Trial judgment [§3]. The claimants applied for: (i) an order that the defendants pay their costs of the whole proceedings up to the conclusion of the Stage 1 Trial, including consideration of scope and any reduction for issues lost; (ii) a payment on account of those costs; (iii) pre-judgment interest on costs; and (iv) an order for a detailed assessment of costs to proceed forthwith. In response, the defendants applied for permission to appeal the substantive judgment and, in relation to costs, argued that no immediate order should be made or, if one was made, that it should be limited in scope and amount.

The Parties’ Positions

The claimants’ position was that they were the successful parties in the Stage 1 Trial and were therefore entitled to their costs [§4]. They sought an order for the defendants to pay their costs of the whole proceedings to date, quantified at approximately £189 million. They requested a payment on account of 60% of that sum, equating to £113.5 million [§27]. The claimants also sought pre-judgment interest on costs at a commercial rate of 1% above base from 1 August 2023, the date at which half the fees were incurred, arguing they had a contingent liability to funders that should be compensated [§47]. They further applied for an immediate detailed assessment of their Stage 1 Trial costs and the costs of earlier jurisdictional challenges ordered by the Court of Appeal [§53].

The defendants’ primary position was that no immediate costs order should be made; any decision on costs should be deferred until after the Stage 2 Trial when the overall success of the litigation would be clearer [§6]. If the court was against them on that point, they argued that any costs order should be limited to the costs of the Stage 1 Trial only, not the entirety of the proceedings. They submitted that the claimants’ costs should be subject to a significant percentage reduction to reflect the issues on which the defendants had succeeded, namely: strict liability under Article 927 (sole paragraph) of the Civil Code; liability under Articles 116 and 117 of the Corporate Law; and certain issues regarding settlements and releases [§19]. The defendants said the payment on account sought was “outrageously high” [§6] and “shockingly excessive” [§28], and pointed to the disparity between the parties’ costs (£189m vs £125m) as raising proportionality concerns [§39]. They opposed any award of pre-judgment interest, arguing the claimants had not paid costs upfront and were not out of pocket [§48].

The Court’s Decision

The court granted the claimants a costs order but on terms more limited than they had sought. Applying the principles in Weill v Mean Fiddler Holdings Ltd [2003] EWCA Civ 1058 and Langer v McKeown [2021] EWCA Civ 1792, the judge held it was appropriate to make an immediate costs order in respect of the Stage 1 Trial, as the claimants had obtained substantial findings on key liability issues [§13–§17]. However, the scope of the order was confined to the costs “of, and incidental to, the Stage 1 Trial” [§18]. The court rejected the argument that the claimants were entitled to the costs of the whole litigation to date, as that would presume ultimate success for all claimants, which remained to be determined.

On the issue of a percentage reduction, the court accepted the defendants’ submissions that the claimants had lost on discrete issues [§19–§24]. The failed claims under Article 927 (sole paragraph) of the Civil Code and the Corporate Law, along with certain points on settlements, had required separate expert evidence and court time. The post-collapse conduct point was discounted as “negligible” in terms of costs incurred [§23]. The court held that a fair and proportionate reduction to the claimants’ recoverable Stage 1 Trial costs would be 10% [§24].

The court then turned to the contentious issue of the payment on account. There had been no costs budgeting for the Stage 1 Trial [§33]. The claimants’ evidence of costs was found to be at a “very high level” with a “paucity of information”, making a “very cautious approach” necessary [§38]. The judge noted the huge disparity between the parties’ costs and expressed concern over reasonableness and proportionality [§39].

Critically, the court held that substantial costs related to claimant sign-up, processing, and call centre operations were not recoverable as part of the Stage 1 Trial costs. Applying Motto v Trafigura Ltd [2011] EWCA Civ 1150 at [104]–[114] and Weaver v British Airways plc [2021] EWHC 217 at [41]–[51], the court held that it was necessary to separate sign-up and collateral costs from subsequent legal advice and assistance [§40]. If recoverable at all, such costs would form part of the costs of the overall proceedings, rather than the Stage 1 Trial.

Stripping out those costs and making further adjustments for funding and insurer-related disbursements, the court arrived at a working figure of approximately £80 million for the purpose of the payment on account calculation [§41]. Applying the 90% recovery rate to this figure yielded approximately £72 million. Adopting a cautious 60% estimate for the payment on account, the court ordered £43 million [§41–§42]. The order for this payment was stayed pending the determination of any application for permission to appeal [§46].

On pre-judgment interest, the court exercised its discretion under CPR 44.2(6)(g) to award interest, applying the principles from Jones v Secretary of State for Energy and Climate Change [2014] EWCA Civ 363 [§50]. Although the claimants had not funded the litigation directly, they faced a contingent liability to pay success fees from any damages awarded, representing a funding cost that reduced their ultimate recovery [§51]. The court awarded interest at 1% above base rate from 1 August 2023, the date by which half the fees were incurred — an approach the court described as “pragmatic and proportionate” — up to the date of the costs order [§52].

The court refused the claimants’ application for an immediate detailed assessment of costs, adhering to the general rule in CPR 47.1 that assessment should await the conclusion of proceedings [§54]. The judge found that an assessment would be “complex and protracted” and would be “disruptive” to the preparation for the Stage 2 Trial [§56].

Finally, the court refused the defendants’ application for permission to appeal [§73–§75]. Having reviewed the nine detailed grounds, which largely alleged a failure by the trial judge to engage with key issues and provide adequate reasons, the court held the appeal had “no real prospect of success” [§73]. The judge provided a reasoned rebuttal of each ground [§64–§72], concluding that the substantive judgment had adequately addressed the critical issues and evidence. There was “no other compelling reason” for the appeal to be heard [§74]. Permission was refused, though the defendants’ time to apply to the Court of Appeal was extended by 28 days [§76].

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Commercial Litigation, Costs Against Successful Party, New Costs Blog, Payment on Account

The High Court’s decision in Getty Images (US), Inc & Ors v Stability AI Ltd [2025] EWHC 3419 (Ch) provides authoritative guidance on applying issue-based costs principles where a party loses overall but achieves commercial success on a standalone claim.

Background

The proceedings involved claims for trade mark infringement, secondary copyright infringement, and database rights infringement brought by six Getty Images entities against Stability AI Ltd. The claimants alleged that the defendant’s Stable Diffusion AI image-generation models infringed their intellectual property rights. A trial on liability took place. Shortly before closing submissions, the claimants abandoned three substantial elements of their claim: the Training and Development Claim, the Outputs Claim, and the Database Rights Infringement Claim [§3]. These abandoned claims were subsequently dismissed by order [§3].

The remaining live issues for determination were the Trade Mark Infringement Claim, a related Passing Off Claim, and a Secondary Infringement of Copyright Claim [§4]. In its judgment of 4 November 2025 ([2025] EWHC 2863 (Ch)), the court found that the claimants succeeded in part on the Trade Mark Infringement Claim in respect of Stable Diffusion Models v1.x and v2.x, leading to the defendant offering undertakings and submitting to an inquiry as to damages [§7, §42]. The court found it unnecessary to determine the Passing Off Claim [§4]. The defendant succeeded on the key issue of statutory construction in the Secondary Infringement of Copyright Claim [§4].

Following the substantive judgment, the parties were unable to agree on costs, leading to a separate hearing to determine that issue [§6]. Each side filed evidence, including analysis attempting to quantify the proportion of total costs attributable to the Trade Mark Infringement Claim [§12].

Costs Issues Before the Court

The central dispute was identifying the overall winner of the litigation for the purposes of costs, given the mixed outcome. This determination would govern the entitlement to ‘general costs’ – those not attributable to a specific issue [§27]. The specific costs issues for determination were:

1. 1. Whether the claimants or the defendant was the overall winner of the litigation.
  2. If the defendant was the overall winner, whether the Trade Mark Infringement Claim constituted a ‘suitably circumscribed issue’ on which it lost, warranting a departure from the general rule.
  3. If so, what costs order should be made in relation to that issue, considering the claimants’ partial success and failures within the claim.
  4. The appropriate percentage of total costs attributable to the Trade Mark Infringement Claim.
  5. Disputes regarding the interim payment on account of costs, specifically the rate to apply to out-of-budget interim application costs and the treatment of costs incurred by the defendant in excess of its approved budget [§63–74].

The claimants accepted that, on any analysis, they would be liable to pay the defendant’s costs for the claims on which they lost (the three abandoned claims and the Secondary Infringement claim), resulting in a net payment from claimants to defendant [§9].

The Parties’ Positions

The Claimants’ Position: The claimants contended they were the overall winner [§7]. They argued they had obtained substantive, valuable relief in the form of a finding of trade mark infringement, resulting in undertakings and an inquiry as to damages, which they could not have achieved without a trial [§7]. They submitted that the potential for a money transfer was the surest indicator of success, relying on AL Barnes Ltd v Time Talk (UK) Ltd [2003] EWCA Civ 402 [§19]. In the alternative, they argued that if there was no overall winner, general costs should be apportioned [§8]. Their fallback position was that even if the defendant was the overall winner, the Trade Mark Infringement Claim was a discrete issue on which the claimants had won, entitling them to their costs of that claim [§8]. They acknowledged that the issues within the trade mark claim were overlapping, making a more granular issue-based deduction impracticable [§48].

The Defendant’s Position: The defendant contended it was the clear overall winner [§11]. It had successfully defended four out of five main claims, with the claimants abandoning three significant claims very late [§33–34]. It argued that the claimants’ success on the Trade Mark Infringement Claim was extremely limited and historic, and that they had lost on many issues within that claim [§11, §50]. The defendant submitted that as the overall winner, it should recover all of its costs, including general and overlapping ‘marginal’ costs, relying on Monsanto v Cargill [2008] FSR 16 [§27–28]. It opposed any order requiring it to pay the claimants’ costs of the trade mark claim [§11]. On interim payments, it argued for a 70% rate on out-of-budget interim application costs and sought an interim payment for budget overspends, asserting there was good reason for the departure [§70–73].

The Court’s Decision

The court applied the well-established three-question approach from Hospira v Novartis [2013] EWHC 886 (Pat): (1) identify the overall winner; (2) determine if the winner lost on a suitably circumscribed issue; (3) decide if it is appropriate to make a costs order on that issue [§17].

On the first question, the court found the defendant to be the overall winner [§32]. Applying the test from Roache v News Group Newspapers Ltd [1998] EMLR 161 – “who, as a matter of substance and reality, has won?” – the court held that the defendant had substantially denied the claimants the success they sought [§18, §35]. The claimants had abandoned three substantial claims and lost on the Secondary Infringement claim [§33–34]. The relief obtained on the Trade Mark Infringement Claim, while valuable, did not outweigh the defendant’s success in substantially denying the claimants the wider injunctive relief and additional damages they had originally sought across multiple claims [§35–37]. The court rejected the suggestion that this was a “score draw” of the type identified in Vringo Infrastructure, Inc. v ZTE (UK) Ltd [2014] EWHC 4475 (Pat) [§40].

On the second question, the court held that the Trade Mark Infringement Claim was a suitably circumscribed issue [§42, §45]. It involved standalone causes of action, and the claimants had achieved a measure of commercial success, including undertakings and an inquiry [§42].

On the third question, the court considered it appropriate not merely to deprive the defendant of its costs of that issue, but to order it to pay a proportion of the claimants’ costs [§46]. The court reasoned that if viewed as a standalone claim, the claimants would have been the overall winner of the Trade Mark Infringement Claim, albeit with failures on several issues [§43]. To reflect justice, the defendant, as overall winner, would recover all general costs pursuant to Monsanto v Cargill [§41, §47], but the claimants should recover a portion of their costs specifically attributable to the trade mark claim [§46–47].

The court then had to quantify this. It rejected the claimants’ argument that they should recover 100% of the trade mark claim costs, as this would ignore their significant failures within that claim [§49]. These failures included losing on models SD XL, XL Turbo, and v1.6; infringement of the GETTY IMAGES mark for model v1.x; infringement of the iSTOCK mark for model v2.x; their main economic case; and their entire case under section 10(3) of the Trade Marks Act 1994 [§50]. In the absence of detailed evidence on apportionment, the court, using its knowledge of the trial, applied a 25% reduction to the claimants’ recoverable costs of the trade mark claim to reflect these failures [§54].

On the percentage of total costs attributable to the Trade Mark Infringement Claim, the court noted the parties’ widely differing estimates. The claimants originally calculated 26.3%, revised to 20.3% after stripping out general costs [§57–58]. The defendant calculated approximately 15% using a weighted mean [§58]. Doing the best it could, the court took a figure of 17.5% [§59]. Therefore, the defendant’s recoverable costs were reduced by 17.5% (the costs of that issue it could not recover) and by a further approximately 13% (representing 75% of the 17.5% attributable to the claimants’ costs) [§61]. This resulted in a total reduction of 30.6% from the defendant’s overall costs [§61].

The court stood back to assess whether the result reflected the overall justice of the case and concluded that it did [§62].

Interim Payment on Account

Regarding the interim payment, the court ordered [§63–74]:

- - Costs within the budget: 90% of budgeted costs and 70% of incurred costs [§63].
  - Out-of-budget interim application costs: an interim payment of 70%, rejecting the claimants’ submission that 50% was appropriate [§64–65].
  - Budget overspend: The court accepted the defendant was likely to establish ‘good reason’ for some overspend, particularly in pre-trial phases, due to the unprecedented case management, frequent pleading amendments, and evolving nature of the litigation [§71–73]. Adopting a cautious approach similar to that in Montres Breguet SA v Samsung Electronics Ltd [2022] EWHC 1895 (Ch), it awarded an interim payment of 20% of the claimed overspend of £394,985.31 [§74].

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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].