Payment on Account Archives

“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].

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

Group litigation: a determination of costs related to common issues

Issues Based And Proportional Costs Orders: When Should They Be Made?

Payments On Account In Long Running Clinical Negligence Cases | Don’t Just Ask

An approach to costs where a claimant has “overwhelmingly” succeeded at trial but lost on some issues

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

Costs After Mixed Success In Multi-Claim IP Litigation | Applying The Three-Question Test

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].

Some You Win Some You Lose | Partial Success And The Courts’ Approach To Costs

Issues Based And Proportional Costs Orders: When Should They Be Made?

Partial Success, Conduct, Offers And Alleged Exaggeration

Identifying The Winner

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

CPR 3.15A | Costs Budget Revisions | Significant Developments And The Need To Act Promptly

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

Detailed Assessment, New Costs Blog, Payment on Account

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

Background

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

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

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

Costs Issues Before the Court

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

The Parties’ Positions

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

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

The Court’s Decision

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

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

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

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

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

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

Sanction for delay in commencing detailed assessment proceedings

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

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

Commencement of detailed assessment proceedings: Earliest time for commencement

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

Costs of detailed assessment proceedings: Entitlement

Indemnity Costs Awarded Where Defences Were ‘Built On Deliberate Lies’

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

The High Court’s decision in JSC Commercial Bank Privatbank v Kolomoisky [2025] EWHC 2909 (Ch) confirms that conduct viewed “in the round” can justify indemnity costs where multiple factors including dishonest defences, disclosure failures, and expert evidence deficiencies take the case outside the norm.

Background

The claimant, JSC Commercial Bank Privatbank, brought proceedings against multiple defendants, including Igor Kolomoisky and Gennadiy Bogolyubov, alleging misappropriation of funds through a fraudulent scheme. On 30 July 2025, the court handed down judgment ([2025] EWHC 1987 (Ch)) finding the defendants liable for substantial sums. A consequentials hearing was convened to address unresolved matters, including the quantification of the judgment sum, interest, costs, and ancillary relief. The Bank, as the successful party, sought its costs of the proceedings. The defendants opposed the Bank’s applications regarding the basis of assessment, an interim payment on account, and interest on costs. The Corporate Defendants were not represented at the hearing, as their solicitors had come off the record.

Costs Issues Before the Court

The court was required to determine three principal costs issues:

- - first, whether the Bank’s costs should be assessed on the indemnity basis rather than the standard basis;
  - second, the amount of any interim payment on account of costs pending detailed assessment; and
  - third, the rate and timing of interest payable on the Bank’s costs.

These issues arose in the context of the Bank having succeeded at trial and the defendants resisting the full extent of the costs relief sought.

The Parties’ Positions

The Bank contended that its costs should be assessed on the indemnity basis, arguing that the defendants’ conduct, both pre-action and during the proceedings, took the case outside the norm. It relied on factors including the nature of the underlying fraud, dishonesty in the defence, evidential failings, belated changes of case, and deficiencies in the defendants’ expert evidence. The Bank sought an interim payment on account of costs of £80 million, representing approximately 72% of its claimed costs of £110,524,169.99. It also sought interest on costs at the Bank of England base rate plus 3% from the dates costs were paid, with post-judgment interest at the statutory rate from the date of the costs order.

The defendants opposed indemnity costs, arguing that their conduct did not justify departure from the standard basis. Mr Bogolyubov submitted that he had adopted a proportionate approach to the litigation. Both individual defendants contested the amount of the interim payment, with Mr Bogolyubov proposing £36.67 million held by his solicitors pending appeal. They also disputed the interest rate sought by the Bank, suggesting that a lower rate would be appropriate, and argued that post-judgment interest on costs should not run until three months after the order to allow for assessment of liability.

The Court’s Decision

The court awarded the Bank its costs on the indemnity basis. It found that the defendants’ conduct, viewed in the round, was outside the norm. Key factors included:

- - the serious nature of the underlying fraud;
  - the advancement of defences built on deliberate falsehoods;
  - significant disclosure failures;
  - the defendants’ decision not to give evidence;
  - belated abandonment of key arguments; and
  - the unsatisfactory nature of their expert evidence.

The court rejected arguments that certain defences should be carved out from indemnity costs, noting their pervasive impact on the proceedings.

On the interim payment, the court determined that a reasonable sum was £76.4 million, after adjusting the Bank’s claim. This comprised 65% of claimed profit costs (£42.4 million), 70% of counsel’s fees (£10.5 million), and 75% of other disbursements (£23.5 million). The court considered the evidence of costs incurred, the defendants’ criticisms of hourly rates and counsel numbers, and the principles from Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm). The payment was ordered within 14 days, consistent with the judgment debt.

Regarding interest on costs, the court awarded pre-judgment interest at the Bank of England base rate plus 3% from the date costs were paid until payment. This rate was deemed appropriate to compensate the Bank for being kept out of its money, reflecting commercial borrowing costs. Post-judgment interest on the interim payment would run at the statutory rate from the due date. For the balance of costs, post-judgment interest would begin three months after the judgment date, allowing the defendants time to assess liability, following the approach in Involnert Management Inc v Aprilgrange Ltd [2015] EWHC 2834 (Comm).

Dishonest Evidence And Baseless Allegations Justify Indemnity Costs Order

Failed Fraud Allegations Justify Indemnity Costs Order Despite Proper Conduct

Indemnity Costs And The High Risk Of Pursuing A Weak Case

Costs Thrown Away, Indemnity Costs And Payments On Account

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

Two Way Costs Orders And CPR 44.2(8) | Payments On Account

Failed Fraud Allegations Justify Indemnity Costs Order Despite Proper Conduct

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

The Commercial Court’s decision in Malhotra Leisure Limited v Aviva Insurance Limited [2025] EWHC 2901 (Comm) establishes that properly pleaded and responsibly pursued fraud allegations can still attract indemnity costs where their objective weaknesses should have been apparent and they caused foreseeable harm.

Background

The case arose from a claim by Malhotra Leisure Limited against Aviva Insurance Limited concerning water damage to a hotel in July 2020. Aviva denied cover, alleging the escape of water was deliberate and formed part of a fraudulent conspiracy by the Malhotra principals to defraud the insurer. In the liability judgment ([2025] EWHC 1090 (Comm), 7 May 2025), the court rejected those allegations and found in favour of the Claimant. The subsequent costs judgment ([2025] EWHC 2901 (Comm), 6 November 2025) determined consequential costs matters following a July 2025 hearing.

Costs Issues Before the Court

The central issue was whether costs should be assessed on the indemnity or standard basis. This was significant because the Claimant’s actual costs of £1,202,957 were more than double its approved budget of £546,731. An indemnity costs order would render the budget irrelevant under CPR 3.18(a), whilst a standard basis order would require “good reason” to exceed it. The court also had to decide who should bear the costs of a specific disclosure application and the appropriate quantum of an interim payment on account (agreed at either £475,000 or £660,000 depending on the basis of assessment).

The Parties’ Positions

The Claimant argued that Aviva’s failed fraud allegations took the case “out of the norm” and warranted indemnity costs. It relied on Thakkar v Mican [2024] 1 WLR 4196, which confirmed that whilst there is no presumption, failed allegations of fraud will “very often” lead to indemnity costs. The Claimant submitted that Aviva’s fraud case was objectively weak from the outset, lacked proper evidential foundation for the alleged financial motive, and evolved at trial with unpleaded allegations. The Claimant highlighted significant financial and reputational harm suffered by its principals, including increased insurance costs, inability to obtain bank financing, and impacts on health and business relationships.

Aviva contended that costs should be assessed on the standard basis. It argued its fraud defence was properly pleaded, supported by credible lay and expert evidence, and pursued responsibly by experienced counsel. Aviva submitted the court must avoid hindsight and recognise the legitimate difficulties insurers face in challenging potentially fraudulent claims. The Defendant emphasised that insurers have a duty to challenge suspicious claims, as failing to do so adversely impacts all policyholders through higher premiums.

The Legal Framework

The court reaffirmed that indemnity costs are exceptional and awarded only where a case is “out of the norm.” An indemnity costs order is considerably more favourable than standard basis because it places the onus of showing costs are unreasonable on the paying party, disapplies proportionality, and renders approved budgets irrelevant. Failed fraud allegations often meet the “out of the norm” threshold, though there is no presumption. As the Court of Appeal stated in Thakkar v Mican, “what is sauce for the goose is sauce for the gander” – just as a dishonest claim attracts indemnity costs against a claimant, failed fraud allegations very often lead to indemnity costs against the defendant.

The Court’s Decision

Nigel Cooper KC, sitting as a Judge of the High Court, ordered that Aviva pay the Claimant’s costs on the indemnity basis. Critically, the judge accepted at [27] that Aviva’s allegations “were properly pleaded and pursued in an appropriate way” by experienced counsel. The court also acknowledged the case was supported by expert evidence and that there was evidence supporting the possibility of deliberate causation.

Nevertheless, the court concluded at [30] that “looking at the circumstances of the case overall an order for indemnity costs is appropriate.” The judge identified six specific factors justifying this conclusion:

- - First, the exceptional seriousness of the allegations | The allegations were at the highest level – that three individuals had entered into a fraudulent conspiracy to damage property and defraud the insurer, supported by lies to both the insurer and the court.
  - Second, foreseeable harm | The Claimant suffered financially (significantly increased insurance costs), Mr Meenu Malhotra was unable to obtain bank financing for developments, and both principals suffered reputational harm and impacts on health and business relations. These consequences were reasonably foreseeable, as evidenced by Aviva’s solicitors’ letter of 5 March 2021.
  - Third, pursuit to the end | The allegations were pursued through to the end of trial without settlement discussions being pursued.
  - Fourth, objective weakness apparent from the outset | The serious risks associated with Aviva’s allegations were, or should reasonably have been, apparent from when first raised. There was no direct evidence of deliberate causation. Aviva’s own expert initially considered the escape fortuitous and accepted in cross-examination that each required failure was plausibly capable of occurring fortuitously. Physical evidence was consistent with Tank 18 overspilling, yet none of Aviva’s proposed deliberate mechanisms involved this. The pleaded financial motive lacked proper evidential foundation – Aviva had early access to audited accounts and a screening report from its agent Sedgwick concluding the Malhotra Group was profitable and solvent with no signs of financial stress. The weakness of the motive case was apparent from an early stage, not only with hindsight.
  - Fifth, evolving case at trial | Aviva’s motive case evolved at trial with new, unpleaded allegations concerning asbestos in the hotel and an alleged aim of constructing a sports bar. Neither was properly pleaded despite both requiring pleading. Both necessitated supplemental evidence and submissions. Both failed.
  - Sixth, late withdrawal of specific allegations | Aviva pursued an allegation that Mr Malhotra was not celebrating his 60th birthday on the relevant night. The Claimant provided extensive disclosure in August 2021 and August 2022. The allegation was only dropped three weeks before trial, after the Claimant had procured witness statements from 10 individuals and obtained witness summonses for their attendance.

The court observed at [28] that Aviva was “determined to pursue this case through to trial,” as was apparent from counsel’s submissions. Despite the obvious difficulties and the serious risk of an indemnity costs order, Aviva chose to proceed.

The judge clarified at [17] that the effect of an indemnity costs order on costs management was “not a relevant circumstance” for deciding whether to make such an order. The disparity between budgeted and incurred costs did not itself justify indemnity costs.

On the specific disclosure application, the court made no order as to costs, meaning each party bore its own costs. The judge found it neither fruitful nor straightforward to determine what a contested hearing would have achieved given the parties’ cooperation in resolving the application.

Aviva was ordered to pay £660,000 on account of costs within 21 days, being the sum agreed as appropriate where costs are assessed on the indemnity basis.

Implications for Practice

This decision reinforces several important principles for costs practitioners and insurers:

- - Proper pursuit does not insulate from indemnity costs | The court’s explicit acknowledgment that Aviva’s allegations were properly pleaded and pursued through experienced counsel demonstrates that technical compliance with pleading requirements and responsible litigation conduct does not prevent an indemnity costs order. The focus is on whether the overall circumstances take the case out of the norm.
  - Objective assessment, not hindsight | Whilst courts must avoid hindsight bias, they will assess whether case weaknesses were or should have been apparent when allegations were first raised. Early availability of evidence undermining core elements (particularly motive) is highly relevant. Here, Aviva had access from an early stage to audited accounts and professional reports contradicting its financial motive theory.
  - Foreseeable harm matters | Courts give weight to whether the consequences of serious fraud allegations – financial, reputational, and personal – were or should have been foreseeable. Solicitors’ correspondence acknowledging such consequences may be used against the alleging party in costs assessment.
  - Aggressive pursuit includes refusing settlement | Pursuing allegations through to trial’s end without exploring settlement, combined with other factors, contributes to findings of aggressive pursuit warranting indemnity costs.
  - Evolving theories require pleading | Introducing new aspects of case theory at trial (here, asbestos and sports bar allegations) that should have been pleaded supports indemnity costs awards, particularly where they necessitate supplemental evidence and submissions from the opposing party.
  - Strategic withdrawal timing is scrutinised | Dropping specific allegations shortly before trial after the opposing party has incurred substantial costs responding (here, 10 witness statements and witness summonses) is relevant to assessing aggressive pursuit.
  - Costs budgets become irrelevant | Once indemnity costs are awarded, approved budgets no longer constrain recovery under CPR 3.18(a). However, budget disparity alone does not justify indemnity costs.

For insurers, this decision serves as a clear warning: whilst entitled and sometimes duty-bound to investigate and defend potentially fraudulent claims, insurers must carefully assess the objective strength of fraud allegations before pursuing them through to trial. The duty to policyholders through maintaining premium levels does not override the costs risks of aggressively pursuing objectively weak fraud defences where core elements (particularly motive) lack proper evidential foundation from an early stage.

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The High Court’s decision in Burgess v Whittle [2025] EWHC 2829 (Ch) held that maintaining a probate challenge without reasonable basis for eight years constituted grossly unreasonable conduct justifying indemnity costs, and the court rejected arguments that circumstances had warranted the Spiers v English exception.

Background

The substantive proceedings concerned the validity of the will of the deceased, dated 12 June 2014 [§6]. The claimant, Fiona Jane Burgess, sought a grant of probate in solemn form of this will. The first defendant, Julie Elizabeth Whittle, opposed the grant, challenging the will on the grounds of lack of testamentary capacity, want of knowledge and approval, undue influence, and the absence of the original will [§17]. The second defendant, Robert Paul Rowell, did not participate in the proceedings.

The deceased died on 13 April 2017 [§6]. In May 2017, the first defendant, then acting in person, lodged a caveat against the grant of probate [§6]. The originally appointed executor, Abbotts Wills and Probate Services Ltd, was dissolved in late 2020 before the caveat was lifted [§6]. The claimant issued the present claim on 7 September 2023 – more than six years after the death [§21]. The first defendant served a defence and counterclaim in October 2023 [§7].

A key procedural feature was the first defendant’s late application in October/November 2024 for permission to instruct a joint expert on testamentary capacity, which was granted [§10-11]. Notably, at the first Case and Costs Management Conference in August 2024, the first defendant had expressly confirmed she was not seeking expert evidence on capacity [§8, §21]. The joint expert’s report, produced in March 2025, concluded that the deceased had testamentary capacity when making the will [§13].

On the day before the trial was due to commence, 13 October 2025, the first defendant, by then legally represented, served her skeleton argument conceding the issues of testamentary capacity and undue influence and declaring neutrality on the remaining issues [§17]. The trial consequently lasted less than an hour [§17]. In the substantive judgment handed down on 16 October 2025, the court held the 2014 will to be valid and ordered that a grant issue to the claimant [§1]. The matter then proceeded to a determination on costs.

Costs Issues Before the Court

The court was required to determine several consequential costs issues [§1]. The primary issue was whether the general rule that costs follow the event should apply, or whether the case fell within the second probate exception from Spiers v English, which could justify a departure from that rule [§5, §18]. Subsidiary issues included whether any costs order against the first defendant should be on the standard or indemnity basis [§23]; the amount of any interim payment on account of costs [§26]; whether interest should be awarded on costs [§28]; and whether the claimant was entitled to an indemnity from the estate for any costs not recovered from the first defendant [§29-32].

The Parties’ Positions

The claimant sought an order that the first defendant pay her costs of the claim on the indemnity basis, to be assessed if not agreed, together with a substantial interim payment [§1]. The claimant also sought an order that she be indemnified out of the estate for any costs not recovered from the first defendant [§1]. The claimant argued that the general rule on costs should apply, as the first defendant’s challenge to the will was speculative, weak, and pursued unreasonably [§23]. She highlighted the first defendant’s last-minute concession, the fact that the claimant had travelled from Australia for a trial that became unnecessary, and a history of settlement offers from the claimant that were rejected by the first defendant [§23-25].

The first defendant did not seek her own costs but argued that there should be no order as to costs between the parties [§1]. Her primary submission was that the circumstances engaged the second probate exception from Spiers v English, as her knowledge and means of knowledge had reasonably led to an investigation of the will’s validity [§5]. She contended that this provided good reason to depart from the general rule that the unsuccessful party pays the successful party’s costs [§5].

The Court’s Decision

The court ordered that the first defendant pay the claimant’s costs of the claim on the indemnity basis, with a detailed assessment if not agreed [§22]. It also ordered an interim payment on account of £109,000 [§27], awarded interest on costs [§28], and granted the claimant an indemnity from the estate for any costs not recovered from the first defendant [§32-33].

Rejection of the Second Probate Exception

On the incidence of costs, the court held that the second probate exception did not apply [§18, §22]. It found that there was no reasonable basis for the first defendant to suspect the will was invalid [§19-22]. The estrangement from the deceased was not a ground for challenging capacity or knowledge and approval [§19]. People fall out and testators are entitled to change their minds [§19]. The will was made professionally and independently [§19], and the beneficiary change kept the gift within the family by giving the first defendant’s share to her own two sons [§19].

Crucially, the first defendant had taken no substantive investigative steps for years despite having access to all relevant material [§20-21]. In September 2022, the will-writers confirmed they had seen the original will after the deceased’s death, removing any basis for suspecting destruction [§20]. In February 2023, the claimant sent copies of the will file and medical records, neither of which gave grounds for suspicion [§20]. The first defendant did not herself seek medical or social care records until making her third-party disclosure application in October 2024 – more than seven years after the death [§20-21]. When these records were produced, they showed no grounds for suspicion [§21].

The court concluded: “Overall, on these facts, and in my judgment, there is simply no room for the application of the second exception in Spiers v English to operate. The first defendant had no reasonable basis to suspect that the 2014 will was invalid, and therefore no reason to investigate” [§22].

Indemnity Costs for Conduct “Out of the Norm”

The court found the first defendant’s conduct to be “out of the norm”, justifying an indemnity costs order [§23-25]. This was based on three main grounds.

First, the case was “entirely speculative and objectively weak” [§23]. All evidence in the first defendant’s possession before the claim was issued pointed to the will’s validity, with none pointing to invalidity [§23]. The first defendant challenged the will on four separate bases, including undue influence for which there was “simply no evidence whatever” [§23]. She did not seek evidence on incapacity until more than a year after the claim was issued, and when obtained, that evidence was also against her case, including the expert report [§23].

Second, the first defendant effectively conceded the case only on the day before trial via an overdue skeleton argument [§24]. By that time, the claimant had flown from Australia to give evidence. The court held: “This should never have happened” [§24]. The decision to concede should have been taken “months, if not years before” [§24]. Importantly, the fact that the first defendant was a litigant in person for much of the proceedings “cannot excuse her in this respect” [§24]. The procedural rules apply equally to litigants in person and represented parties [§24].

Third, the claimant made repeated settlement offers, all of which the first defendant refused [§25]. Although the offers were technically flawed because they involved discontinuance rather than a court order under CPR rule 57.11, “if the first defendant had otherwise been prepared to accept one of them, a means would have been found to implement it” [§25]. The court regarded the first defendant’s conduct overall as “grossly unreasonable, taking more than eight years to decide that there was in fact no basis for challenging the validity of the deceased’s will” [§25].

Payment on Account of Costs

Regarding the payment on account, the court noted that the usual practice of ordering 90% of an approved costs budget does not apply where indemnity costs are awarded [§26]. This is because CPR 3.18, which prevents departure from budgeted costs without good reason, does not apply to indemnity basis assessments [§26]. As Coulson LJ observed in Burgess v Lejonvarn, “if there is an order for indemnity costs, then prima facie any approved budget becomes irrelevant” [§26].

Nevertheless, having regard to the claimant’s varied budget of £109,133.50 (excluding VAT) and her evidence of total costs incurred of approximately £155,000, the court considered £109,000 to be a reasonable sum to order as an interim payment [§27]. The court acknowledged that the budget included some costs not actually incurred (such as the second day of trial and mediation disbursements) but also that there were other incurred costs not included in the budget [§27].

Interest on Costs

The court awarded interest on the claimant’s costs at 2% above the Bank of England base rate from the dates on which she paid her legal costs invoices until the date of judgment [§28]. This was to compensate the claimant for the loss of use of her money [§28]. The statutory Judgments Act 1838 rate of 8% per annum would apply to interest accruing after judgment [§28].

Indemnity from the Estate

Finally, the court held that the claimant, as a successful party propounding a will where the executor had not acted, was entitled to the same costs indemnity from the estate that an executor would have received [§29-33]. This principle, derived from Sutton v Drax (1815) 2 Ph 323 and confirmed by subsequent authorities including Wilkinson v Corfield (1881) 6 PD 27, provides that where a legatee propounds a will and succeeds, “thereby fulfilling the duty of the executor, the legatee is entitled to have his expences paid out of the estate of the deceased” [§29, §31].

The court noted that the claimant had filed the required notice of her intention to seek costs from the estate on issue of the claim, as mandated by CPR PD 3E, paragraph 5.4 [§32]. Accordingly, the claimant was entitled to her costs of the claim on the indemnity basis out of the estate, to the extent not recovered from the first defendant [§33]. Since the claimant was to be administratrix of the estate, it would be her duty to seek to recover those costs from the first defendant in the first instance [§33].

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The High Court’s decision in Clarke v Guardian News & Media Ltd [2025] EWHC 2575 (KB) demonstrates when dishonest conduct in defamation proceedings justifies an order for indemnity costs and a substantial payment on account.

Background

The case concerned a claim for defamation and data protection brought by the actor Noel Anthony Clarke against Guardian News & Media Ltd. The claim arose from a series of articles published by the defendant in 2021, which contained allegations of misconduct against the claimant. The claimant’s case was that these articles were defamatory and caused serious harm to his reputation. The defendant defended the claim on the grounds of truth and public interest. Following a liability trial, Mrs Justice Steyn handed down a judgment on 22 August 2025, dismissing the claimant’s claims in their entirety [§2]. The court found that the defendant had established both the truth defence and the public interest defence. The judgment also concluded that the claimant had advanced a baseless conspiracy allegation and had made dishonest statements in his evidence [§20-21]. The hearing on 23 September 2025 was convened to deal with consequential matters, including the resolution of several outstanding costs issues.

Costs Issues Before the Court

The court was required to determine four distinct costs issues following the dismissal of the claim. The first was the appropriate costs order to be made upon the dismissal of the claim [§1]. The second concerned the treatment of various ‘costs reserved’ orders made during the proceedings [§4]. The third issue was whether the costs should be assessed on the standard or indemnity basis [§13]. The fourth and final issue was whether the defendant was entitled to a payment on account of costs and, if so, in what amount [§25].

The Parties’ Positions

The defendant sought an order that the claimant pay its costs of the claim, to be assessed on the indemnity basis [§16]. It argued that the claimant’s conduct, including advancing and maintaining dishonest evidence and pursuing baseless allegations of conspiracy and dishonesty against the defendant’s witnesses, justified a departure from the standard basis. The defendant also sought a payment on account of costs in the sum of £3 million [§28], citing its incurred costs which were significantly in excess of £6 million [§26]. Regarding the ‘costs reserved’ orders, the defendant submitted that no further order should be made, meaning they would be treated as costs in the case [§6].

The claimant, who appeared in person [§19], did not formally contest that the defendant was entitled to its costs but opposed an order for indemnity basis assessment [§17]. He submitted that he had a right to bring the claim to defend his reputation, had relied on legal advice, and had made efforts to settle. He argued that his social media posts did not amount to courting publicity and urged the court to consider the devastating financial impact of the litigation on him and his family [§17]. He opposed any payment on account, or alternatively submitted that it should be modest, proportionate to his means, and stayed pending a potential appeal [§29]. In relation to the reserved costs, he argued that the interim non-disclosure application was unnecessary as he had given undertakings promptly, and that the proposed new defendants in the amendment and joinder application were never joined and incurred no costs [§7].

The Court’s Decision

The court ordered that the claimant pay the defendant’s costs of the claim, to be subject to detailed assessment on the indemnity basis [§24]. It found no reason to depart from the general rule that the unsuccessful party should pay the costs of the successful party [§2-3].

In deciding on the indemnity basis, the court applied the test from Three Rivers DC v Bank of England, which requires conduct that is “unreasonable” rather than morally condemnable [§16]. The court highlighted three specific factors justifying indemnity costs [§20-22]:

1. 1. First, the claimant had made statements in his pleaded case and evidence that were found to be untrue and dishonest. The court referred to the principle from Esure Services Limited v Quarcoo that where a claim is maintained dishonestly, “it will be normal for a court to seek to mark its disapproval” with an indemnity costs order [§20].
  2. Secondly, the claimant maintained a false case by advancing baseless allegations of dishonesty and bad faith against almost all the defendant’s witnesses, including untrue allegations that victims were lying and other serious allegations such as falsification of documents, theft, perversion of justice, and conspiracy — all of which caused distress, particularly to those recounting personal incidents of sexual misconduct [§21].
  3. Thirdly, the claimant made and maintained wholly unfounded allegations of dishonesty against three professional journalists. The court noted that when such allegations are made and not substantiated, courts have long shown themselves ready to respond with indemnity costs orders [§22].

The court also noted that while it was not necessary to show the unreasonable conduct increased costs, the conspiracy allegation had in fact “inevitably” and “significantly” increased the defendant’s costs [§23].

Regarding the ‘costs reserved’ orders, the court made no further order [§12]. This meant that the costs of the interim non-disclosure application and the amendment and joinder application would be treated as costs in the case, and thus payable by the claimant as part of the defendant’s overall costs. The court found the non-disclosure application was necessary due to a threat of publication for which the claimant and his legal team bore responsibility [§8]. On the amendment application, the court noted that the conspiracy allegation was without foundation and permission would have been refused as having no real prospect of success [§9].

The court ordered a payment on account of costs in the sum of £3 million, to be paid within 28 days [§39]. It held that there was no good reason not to make such an order, rejecting the claimant’s assertion of inability to pay as a relevant consideration at this stage, citing Bank St Petersburg PJSC v Arkhangelsky [§30]. The court emphasized that a party’s ability to pay is not relevant when considering what costs order to make in principle, but becomes relevant at the stage of enforcement [§18, §30].

The court found the sum of £3 million was a “reasonable sum” representing a reasonable estimate of the likely level of recovery. Applying Excalibur Ventures LLC v Texas Keystone Inc, the court noted that a reasonable sum often allows an “appropriate margin to allow for error in the estimation” [§35]. The court concluded that £3 million was “substantially lower than the defendant’s likely level of recovery on detailed assessment” and therefore allowed a “suitably wide margin of error,” particularly given the indemnity basis of assessment [§39]. The court addressed and rejected the claimant’s various objections to specific cost items, finding that the costs appeared to have been reasonably incurred in the context of the litigation [§32-38].

Finally, the court refused the claimant’s application to extend time for seeking permission to appeal [§42] and, consequently, refused to stay the costs order [§43]. It noted that the claimant had already had more than the usual period to consider an appeal and had not identified any potential grounds.

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The High Court’s decision in Fernandez v Fernandez [2025] EWHC 2530 (Ch) confirms that unreasonable refusal to mediate on appeal may independently justify indemnity costs, and that executors conducting appeals in their own interest lose their right to indemnity from the estate.

Background

This judgment follows HHJ Paul Matthews’ substantive appeal judgment handed down on 22 September 2025 ([2025] EWHC 2373 (Ch)), which dismissed Julian Fernandez’s appeal against his removal as executor. Having invited written submissions on consequential matters, the court now addresses the specific costs orders arising from the appeal, including whether unreasonable refusal to mediate justifies indemnity costs.

The case concerned an appeal by Julian Fernandez against an order made by District Judge Wales on 3 December 2024, which removed him as executor of the estates of his parents and of a trust established during their lifetimes. The respondents to the appeal were his siblings, Leessa Karen Fernandez and Graeme Nicholas Fernandez, along with other defendants to counterclaim. The appeal was heard by HHJ Paul Matthews, who handed down a written judgment on 22 September 2025 dismissing the appeal [§1]. Following the substantive decision, the court invited written submissions on consequential matters, leading to this judgment dealing exclusively with costs-related issues [§1].

Costs Issues Before the Court

The court was required to determine five matters arising from the dismissed appeal [§2]: (i) the incidence of costs, specifically whether the unsuccessful appellant should pay the respondents’ costs; (ii) the basis of assessment, namely whether costs should be assessed on the standard or indemnity basis; (iii) whether a payment on account of costs should be ordered and in what amount; (iv) whether interest should be awarded on costs; and (v) whether the appellant was entitled to an indemnity from the estates and trust fund for his own costs and any costs liability to the respondents [§2]. The court also determined whether summary or detailed assessment was appropriate [§25-28].

The Parties’ Positions

The respondents sought an order that Julian pay their costs of the appeal on the indemnity basis [§4, §13]. They argued that Julian’s conduct warranted indemnity costs, citing his unreasonable refusal to mediate, his pursuit of unwarranted factual enquiries, his making and failure to withdraw improper allegations, his misdescription of legal authorities, and the over-elaborate and repetitive nature of his grounds and skeleton arguments [§13]. They also requested a detailed assessment of costs [§25], a payment on account of £46,000 (approximately 60% of their claimed costs of £77,663.91) [§31], interest on costs at 2% above base rate from the dates of payment [§34], and a declaration that Julian was not entitled to an indemnity from the estates or trust for his costs or his liability to pay theirs [§36].

Julian’s position on costs was ambiguous [§4]. In his submissions dated 25 September 2025, he initially appeared to argue that the respondents should not be entitled to recover costs at all, primarily due to their late service of a costs statement, which he claimed was served after 16:00 on the day before the hearing and therefore deemed served on the hearing day [§4, §7]. However, his draft order proposed that he pay the respondents’ costs on the standard basis [§4]. He opposed indemnity costs, contending that the grant of permission to appeal by Michael Green J indicated his conduct was not “out of the norm” [§14]. He also argued that the respondents’ costs were inflated and disproportionate, suggesting that summary assessment was appropriate and disputing the need for a payment on account or interest [§26, §31-32]. On the indemnity issue, Julian did not provide a substantive response to the respondents’ application [§37].

The Court’s Decision

The court ordered Julian to pay the respondents’ costs of the appeal on the indemnity basis, to be subject to detailed assessment if not agreed, with interest at 2% above bank base rate from the dates the respondents paid their legal costs until judgment [§38]. A payment on account of £38,832 was required by 4 pm on 20 October 2025 [§38]. The court also declared that Julian was not entitled to any indemnity from the estates or trust fund for his own costs of the appeal or for his costs liability to the respondents [§37-38].

Incidence of Costs

On the incidence of costs, the court applied the general rule under CPR rule 44.2(2)(a) that the unsuccessful party should pay the costs of the successful party [§3, §6]. As the appeal had been dismissed, the respondents were the successful party, and no reason was found to depart from the general rule [§6]. Julian’s argument that the respondents should be denied costs due to late service of their costs statement was rejected [§7-11]. The court found that any prejudice was minimal, as Julian had the statement the evening before the hearing, and the case was not suitable for summary assessment, rendering the point largely irrelevant [§11]. The court cited authority, including Macdonald v Taree Holdings Ltd [§9], that failure to comply with the practice direction should not lead to a total deprivation of costs where otherwise entitled. The court described Julian’s submission as “formalism of the most unthinking kind” [§11].

Basis of Assessment

Regarding the basis of assessment, the court held that indemnity costs were justified due to Julian’s conduct, which was “out of the norm” [§24]. The court referenced Hosking v Apax Partners Ltd [§12] in emphasising that indemnity costs are appropriate where behaviour takes the case out of the norm.

Key factors included:

- - Unreasonable refusal to mediate | Julian delayed responding to mediation offers for ten weeks (from 14 April to 23 June 2025) and failed to propose alternative dates, effectively frustrating the process [§15-16]. On 14 April 2025, the respondents proposed 26 dates for mediation (5 in May, 21 in June) [§15]. They chased for a response on 9 May and 8 June, but received only a holding response on 13 June [§15]. Julian’s substantive response on 23 June stated none of the 26 dates was possible and that mediation was unlikely before the appeal hearing on 8 July [§15]. The court found it “unacceptable to take so long to respond” and “equally unacceptable not to be able to make some re-arrangement” for at least one of 26 dates [§16]. It concluded that “Julian just did not wish to mediate” [§16]. This alone warranted a costs sanction, as per Thakkar v Patel [§17-18].
  - Pursuit of matters beyond the core issue | Julian insisted on pursuing matters other than whether he should be replaced as executor, including what he called “central issues” that were not even pleaded [§19]. This constituted “conduct out of the norm” [§19].
  - Other conduct points | The court considered allegations regarding misdescription of authorities and over-elaborate pleadings but found these, standing alone, were not sufficient to justify indemnity costs [§21-22]. The court was not prepared to conclude that counsel deliberately miscited authorities and proceeded on the basis of mistaken understanding [§21]. Similarly, over-elaborate and repetitive pleadings, whilst regrettable, were not of themselves “conduct out of the norm” [§22].

The court concluded that the mediation refusal and pursuit of unpleaded issues “amply justify an award of costs on the indemnity basis” [§24].

Method of Assessment

On the method of assessment, the court ordered detailed assessment rather than summary assessment [§25-28]. Although Julian argued that summary assessment was suitable for a hearing lasting one day or less under CPR PD 44 paragraph 9.2(b) [§26], the court noted he had omitted the final part of the rule, which provides for detailed assessment where “there is good reason to do so, for example where the paying party shows substantial grounds for disputing the sum claimed” [§27]. The court found substantial grounds for disputing the costs existed, which could not be dealt with summarily, and therefore ordered detailed assessment [§28].

Payment on Account

For the payment on account, the court applied CPR rule 44.2(8), which requires such a payment unless there is good reason not to do so [§29]. Julian’s arguments about inflated costs went to quantum rather than the principle, and no good reason was found to avoid an order [§32]. The respondents sought 60% of £77,663.91, rounded down to £46,000 [§31]. The court, applying the approach in Excalibur Ventures LLC v Texas Keystone Inc [§30], considered factors including hourly rates exceeding guidelines and potential duplication of work [§33]. District Judge Wales had previously expressed concerns about the respondents’ costs [§33]. Taking a cautious approach, the court ordered 50% of the claimed costs, amounting to £38,832 (to the nearest pound), payable within 14 days [§33].

Interest on Costs

Interest on costs was awarded at 2% above bank base rate from the dates the respondents paid their legal costs until judgment [§34-35]. The court noted this power is “now routinely exercised” following trial [§34, citing Involnert Ltd v Aprilgrange Ltd]. The court rejected Julian’s argument that inflated costs made interest inappropriate, noting that interest would apply only to costs allowed on detailed assessment, not the claimed amounts [§35].

Indemnity from Estates

Finally, the court denied Julian any indemnity from the estates or trust fund for his costs or his liability to pay the respondents’ costs [§36-37]. The court held that the appeal was conducted entirely in Julian’s own interest, not for the benefit of the estates or trust [§37]. Costs were therefore not properly incurred under section 31(1) of the Trustee Act 2000 and CPR PD 46 paragraph 1.1(b) [§37]. The court noted that the judge below had been entitled to reach the same conclusion regarding Julian’s indemnity for costs of hostile litigation at first instance [§36].

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

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

Commercial Litigation, Indemnity Costs, New Costs Blog, Part 36, Payment on Account, YT

The High Court’s decision in Learning Curve (NE) Group Limited v Lewis & Anor [2025] EWHC 2491 (Comm) demonstrates the difficulty parties face when attempting to avoid Part 36 consequences after failing to beat a claimant’s offer, with the court rejecting challenges to offer validity, interest rates, cost basis, and payment on account quantum.

Background

The claim arose from a Share Purchase Agreement (SPA) dated 29 October 2021, under which the claimant, Learning Curve (NE) Group Limited, acquired shares from the defendants, Richard Huw Lewis and Melanie Probert. The claimant brought proceedings for breaches of warranty and under an indemnity clause in the SPA. In a judgment dated 4 August 2025 ([2025] EWHC 1889 (Comm)), the court found the defendants liable, and the claimant elected to enter judgment in the sum of £5,211,625 for breach of warranty. This sum was reduced by a prior payment of £783,325 made by the defendants under the indemnity, resulting in a net judgment debt of £4,428,300, which was payable by 19 September 2025.

Prior to the trial, the claimant had made a Part 36 offer on 7 February 2024, offering to settle for £5,211,625, which was not accepted by the defendants. Following the main judgment, the court addressed consequential matters, including the effect of the Part 36 offer, interest on the judgment sum, costs, permission to appeal, and a stay pending appeal. The parties provided written submissions, and the court determined these issues on the papers without a further hearing [§8, §11].

The Defendants’ Multi-Pronged Challenge

Following judgment in the claimant’s favour for the exact sum offered under Part 36, the defendants mounted challenges on multiple fronts, seeking to avoid or reduce the consequences under CPR 36.17(4). The court addressed each argument in turn.

Challenge 1 | The Offer Was Unclear

The defendants’ first argument was that the Part 36 offer lacked clarity because it offered £5,211,625 but was silent about the £783,325 already paid by the defendants under the indemnity in October 2022. They contended it was unclear whether the offer required payment of the full £5,211,625 in addition to the amount already paid, meaning the judgment (which credited the earlier payment) had not matched the offer [§19, §23].

The court rejected this argument. HHJ Russen KC held that the £783,325 was properly treated as a payment on account of the larger warranty claim. The offer’s silence on this sum was appropriate because the defendants’ counterclaim sought its return, meaning it could not be “appropriated” by either party until the counterclaim was resolved. The offer included settlement of the counterclaim, so acceptance would have resulted in the claimant retaining the £783,325 as part of the £5,211,625 total. The defendants had not requested clarification under CPR 36.9, and the court found no genuine ambiguity [§20-25].

Drawing on the reasoning in Macleish v Littlestone [2016] EWCA Civ 127 and Synergy Lifestyle Ltd v Gamal [2018] EWCA Civ 210, the court applied a presumption that the payment on account would be treated as made on account of the sum offered, absent contrary clarification. Any other interpretation would produce an “absurd result” [§25].

Challenge 2 | The Claimant’s “Shifting Case” Made Application Unjust

The defendants argued that it would be unjust to apply CPR 36.17(4) consequences because the claimant’s case on quantum had shifted significantly—from £6.8m in the claim form to £10.18m in particulars of claim to different valuations in expert evidence. They contended this uncertainty meant they could not properly evaluate the offer when made [§29-30].

The court found this argument backfired. Rather than supporting injustice, these points “reinforced the effectiveness of the Offer.” The claimant had not made good its pleaded case for £10m+, and the defendants would have “spared themselves both the continuing uncertainty over the level of their financial exposure, including ongoing interest, and the very significant legal costs incurred by both sides since the Offer was made” if they had accepted it [§30].

HHJ Russen KC cited the “formidable obstacle” test from Smith v Trafford Housing Trust [2012] EWHC 3320 (Ch), endorsed by the Court of Appeal in Webb v Liverpool Women’s NHS Foundation Trust [2016] EWCA Civ 365. By making the offer a year before trial at just over half the pleaded sum, the claimant had given defendants a genuine settlement opportunity. The defendants “come nowhere close to overcoming the ‘formidable obstacle'” required to escape Part 36 consequences [§31-33].

Challenge 3 | Enhanced Interest Rate Too High

On interest, the defendants proposed that if enhanced Part 36 interest applied, it should be limited to 4% above base rate rather than the 8% sought by the claimant [§41].

The court awarded 8% above base rate for the period from 28 February 2024 (expiry of the relevant period) to 4 August 2025 (judgment date). This decision was supported by evidence from the claimant’s witness that the claimant had borrowed at rates equivalent to 4.5-7.14% above base since 2021, meaning 8% provided appropriate compensation while remaining within the 10% maximum under CPR 36.17(4)(a). The court noted that enhanced interest under Part 36 may include a “non-compensatory element” as an incentive to settle [§44-46].

For the earlier period (29 October 2021 to 28 February 2024), the court awarded 2% above base under section 35A of the Senior Courts Act 1981, rejecting the defendants’ proposal of 1% [§42, §44].

Challenge 4 | Costs Should Be Reduced by 50%

The defendants argued that the claimant’s costs recovery should be capped at 50% because the claimant had “deliberately exaggerated its claim” by pursuing £10m when the true value was approximately £5m. They also contended that any payment on account should exclude pre-budget incurred costs, limiting it to £846,206.50 [§52-53].

The court rejected this comprehensively. The existence of the Part 36 offer undermined the exaggeration argument—defendants had a clear opportunity to settle at the sum now established as correct. The claimant succeeded “on all material issues presented by the parties” and was entitled to full recovery [§54-55]. The court specifically noted that costs reserved from an earlier disclosure application should be included, as these would never have been incurred if the offer had been accepted [§57].

Challenge 5 | Payment On Account Too High

The court ordered payment on account at 100% of the approved budgeted costs (£1,257,382), departing from the common practice of 90% [§58].

HHJ Russen KC explained that the usual 90% approach reflects the protection CPR 3.18 gives to approved budgets on standard basis assessment—providing confidence that this percentage is unlikely to constitute overpayment. However, CPR 3.18 does not apply to indemnity basis costs. Citing Burgess v Lejonvarn [2020] EWCA Civ 114, the court held that where a significant portion of costs will be assessed on the indemnity basis, approved budgets become “prima facie irrelevant” to those costs [§59-60].

With total invoiced costs of £2,210,133 and a significant element on the indemnity basis, the payment on account of £1,257,382 represented only 57% of total costs incurred. The court was satisfied this was unlikely to constitute overpayment even allowing for reasonableness challenges [§61].

Final Elements | The Additional Amount and Interest on Costs

The court ordered:

- - The additional amount of £75,000 under CPR 36.17(4)(d), payable within 6 weeks [§34]
  - Interest on costs at 2% above base until 28 February 2024 and 8% above base until 4 August 2025, with the Judgments Act rate thereafter [§63]

Permission to Appeal and Stay—Also Refused

For completeness, the defendants also sought permission to appeal on four grounds and a stay pending appeal. Permission was refused on all grounds, with the court finding no real prospect of success [§67-80]. The stay application was rejected as the defendants had not demonstrated “solid grounds of irremediable harm” and appeared able to access resources to meet their liabilities [§85-88].

Key Takeaway

This judgment illustrates that comprehensively challenging Part 36 consequences rarely succeeds. The “formidable obstacle” test means courts will apply the full range of CPR 36.17(4) benefits unless clear injustice can be demonstrated—and arguments that defendants could have avoided expense by settling will typically reinforce rather than undermine those consequences.

CPR 36.17 And The Just Rewards Of A Good Part 36 Offer

igh Court decision on full CPR 36.17(4) consequences including enhanced interest at 6% above base, indemnity costs, and additional amount. Directly relevant authority on when courts apply Part 36 benefits.

CPR 36.17 | Part 36 Offer To Accept £1 Was A Genuine Attempt To Settle

Court of Appeal guidance on the “formidable obstacle” test and when Part 36 consequences apply. Discusses the strict compliance required and high hurdle for escaping consequences.

CPR 36.17(5) | Costs Following Trial On Liability And The Effect Of An Extant Part 36 Offer

High Court decision on CPR 36.17(5) mandatory factors and when costs must be reserved. Explores the “formidable obstacle” threshold in split trial context.

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

Guidance on payment on account principles, including the standard 90% of budgeted costs approach and the relevance of CPR 3.18 on assessment.

When Part 36 Offers Demand Total Capitulation | Matière v ABM

Recent High Court decision on what constitutes a genuine Part 36 offer and when offers may be challenged as demands for capitulation rather than settlement.

When Is A Part 36 Offer Not A Part 36 Offer?

Court of Appeal guidance on Part 36 offer validity and construction, relevant to the offer clarity arguments in Learning Curve.

Variation Of Costs Orders After Successful Appeal | When Previous Orders Should Stand

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

The Court of Appeal’s decision in Potanina v Potanin (No.2) (Costs) [2025] EWCA Civ 1223 addresses variation of costs orders on appeal, confirming that costs orders should not be varied where the fundamental basis of the earlier success remains undisturbed by a subsequent appellate decision on different grounds.

Background

The proceedings concerned a costs judgment following a remitted appeal in one of the most protracted and high-value matrimonial disputes in English legal history. The parties, both Russian nationals, divorced in Russia in 2014 after a 30-year marriage. In the Russian proceedings, the wife received what was described as a “tiny fraction” of the parties’ estimated $20 billion wealth, as only assets legally owned by the husband were divided — the vast majority of his wealth held through trusts and corporate structures was excluded. The wife subsequently relocated to London and in October 2018 applied for leave to bring financial remedy proceedings in England under Part III of the Matrimonial and Family Proceedings Act 1984.

The Appeal History

In January 2019, Cohen J granted the wife leave on a without-notice basis. The husband applied to set aside that order, arguing the judge had been materially misled. After hearing both sides, Cohen J set aside his original order and refused leave. The wife appealed to the Court of Appeal. In May 2021, the Court of Appeal allowed her appeal [2021] EWCA Civ 702, finding that Cohen J had not been materially misled and that the proper approach was to adjourn set-aside applications unless the respondent could deliver a “knockout blow.” The court restored the grant of leave and ordered the husband to pay the wife’s costs, with payments on account totalling £491,439.80 [§6].

The husband appealed to the Supreme Court. In March 2024, the Supreme Court allowed his appeal by a majority of 3:2 [2024] UKSC 3. Critically, the Supreme Court succeeded on different grounds from those argued below. It held that the entire “knockout blow” practice was unlawful and contrary to procedural fairness, but did not disturb the Court of Appeal’s findings that Cohen J had not been materially misled. Because it succeeded on new procedural grounds, the Supreme Court remitted two of the wife’s grounds of appeal back to the Court of Appeal for determination under the correct legal principles. The Supreme Court also ordered the wife to pay 50% of the husband’s appeal costs, but deferred payment until final determination of the wife’s substantive Part III claim [§7].

The Present Proceedings

On 4 September 2025, the Court of Appeal handed down judgment on the two remitted grounds [2025] EWCA Civ 1136 [§1]. That substantive judgment allowed the wife’s appeal and granted her leave to make an application under Part III of the Matrimonial and Family Proceedings Act 1984. This subsequent judgment, handed down on 2 October 2025, addressed the costs issues arising from that remitted appeal and the protracted litigation history [§1-2].

The husband was a designated person under the Russia (Sanctions) (EU Exit) Regulations 2019, necessitating a licence for any financial transfers [§3]. The parties agreed that the husband should pay the wife’s costs of the appeal on a standard basis, to be assessed if not agreed, and that a licence would need to be obtained for payment [§3]. However, they disputed four ancillary costs matters [§4].

Costs Issues Before the Court

The court was required to determine four specific costs issues [§4]. First, whether the costs order made by the Court of Appeal in May 2021 should be varied in light of the subsequent decision of the Supreme Court in 2024, an issue remitted by the Supreme Court for the Court of Appeal’s consideration [§4(i)]. Second, whether the husband should make a payment on account of the wife’s costs of the appeal [§4(ii)]. Third, whether the husband could offset his liability for costs against the sum the wife was ordered to pay by the Supreme Court [§4(iii)]. Fourth, the appropriate time frame for the husband to meet any costs award, given the sanctions regime affecting him, with the husband seeking 90 days and the wife proposing 14 days [§4(iv)].

Previous Costs Orders

For context, the Court of Appeal’s May 2021 order included two separate costs awards on the standard basis: £255,301.20 on account for the appeal costs, and £236,138.60 on account for the set aside application costs [§6]. The Supreme Court’s March 2024 order required the wife to pay 50% of the husband’s appeal costs, but deferred payment until 90 days after the later of: obtaining a licence, conclusion of detailed assessment or agreement, or final determination of the wife’s substantive Part III claim [§7].

The Parties’ Positions

The wife contended that the 2021 costs order should remain unaltered, arguing that she had comprehensively succeeded in the earlier appeal by demonstrating that the first instance judge (Cohen J) had not been materially misled, a point not challenged by the husband in the Supreme Court appeal [§8]. She noted that the husband had succeeded in the Supreme Court on an argument which had not previously been raised [§8]. She sought a payment on account of £350,000, representing approximately 72% of her total costs [§10]. She proposed that payment should be made within 14 days of obtaining the required licence [§11]. She opposed any offset of the Supreme Court costs liability, noting that under that order, payment was deferred until the conclusion of the entire proceedings [§12, referencing §7].

The husband argued that the 2021 costs order should be varied to reflect the Supreme Court’s decision. He accepted liability for the wife’s costs of Cohen J’s de novo determination and the Maintenance Regulation case, but disputed liability for costs of the set aside aspect [§9]. As a compromise, he proposed that he pay 50% of the costs of the 2021 appeal and 50% of the costs before Cohen J, on the basis that each party had succeeded in their respective appeals [§9]. He disputed the necessity of any payment on account but, if ordered, did not appear to dispute the figure [§10]. He sought 90 days for payment after the licence was obtained, citing “formidable practical difficulties” in transferring funds through intermediary banks under sanctions compliance requirements, and noted potential delays beyond his control [§11]. He pointed out that the Supreme Court had allowed 90 days in its March 2024 order [§11]. He also requested that his costs liability be offset against the sum the wife owed under the Supreme Court’s costs order [§12].

The Court’s Decision

Variation Of Costs Orders On Appeal | The 2021 Order

The court declined to vary the 2021 costs order, establishing important principles on variation of costs orders on appeal [§13, §17(i)]. It found that the wife’s success in the earlier appeal was based on grounds not materially challenged or disturbed by the Supreme Court, which had decided the husband’s appeal on previously unargued points [§13]. The fundamental basis on which she succeeded in 2021 — that Cohen J had not been materially misled — was not challenged in, let alone disturbed by, the Supreme Court [§13, citing the Supreme Court’s decision at [40]].

The court considered the wife the successful party overall, as she had obtained leave to pursue her financial application [§13]. Applying the principle in Baker v Rowe [2009] EWCA Civ 1162 at [25], and noting that although the general rule does not apply to appeals from the Family Division under CPR 44.2(3)(a), the court found “no good reason why this should not be the ‘decisive factor’ in this case” [§13].

Payment on Account

The court ordered a payment on account of £350,000 [§14, §17(ii)(a)]. In line with CPR rule 44.2(8), the court was satisfied there was no good reason the wife should not receive a reasonable sum on account of her costs [§14]. The sum claimed — a little over 70% of the total costs claim per the wife’s form N260 — was deemed appropriate [§14].

Set-off Against Supreme Court Costs Order

The court rejected the husband’s request for an offset against the Supreme Court costs liability [§15, §17(v)]. It noted that it was not open to the court to vary the costs order made by the Supreme Court [§15]. The wife’s payment obligation under the Supreme Court order was deferred until the conclusion of the entire proceedings (specifically, “the final determination of the wife’s substantive Part III claim”) [§7, paragraph 1(a)(iii)].

Time for Payment

The court set a period of 60 days from the wife’s notification that the required licence had been obtained [§16, §17(ii)]. This balanced the husband’s cited practical difficulties against the wife’s preference for a shorter timeframe [§16]. The court found 90 days excessive but 14 days unrealistic [§16]. The order specified that if payment was not made by the due dates, interest at the applicable judgment rate would begin to accrue immediately [§17(iii)]. The order expressly confirmed that the Supreme Court’s costs order stood unaltered [§17(v)].

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