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

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

Background

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

Costs Issues Before the Court

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

The Parties’ Positions

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

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

The Court’s Decision

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

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

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

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

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

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

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

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

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Director Ordered To Pay Creditor’s Costs Personally Despite Rule 3.4 In Failed Administration Application

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This costs judgment in Settle v Sandstone Legal Limited [2025] EWHC 2771 (Ch) provides a modern example of a director being held personally liable for an opposing creditor’s costs in an administration application, following findings that he knowingly misled the court with false witness evidence.

Background

On 31 January 2025, Mr Andrew Settle (sole director of Sandstone Legal Limited) applied for an administration order seeking appointment of his chosen nominees to facilitate a pre-pack sale to his new company, Precision. At the first hearing on 7 February 2025, ICC Judge Barber rejected the pre-pack as the consideration was so low it failed even the third limb of paragraph 11(b) of Schedule B1 to the Insolvency Act 1986. The court adjourned the application and appointed Phillippa Smith and Jessica Thomas as interim managers.

At the resumed hearing on 21 February 2025, the court granted an administration order but appointed Ms Smith and Ms Thomas as administrators—rejecting Mr Settle’s original nominees. In a judgment reported at [2025] EWHC 742 (Ch), ICC Judge Barber found Mr Settle had knowingly included “material, self-serving untruths likely to mislead the Court” in his first and second witness statements. All employees had been made redundant and lease break clauses exercised by 31 January 2025—yet Mr Settle’s evidence portrayed the company as a going concern requiring urgent pre-pack administration.

Costs were reserved to a hearing on 18 June 2025, with judgment handed down on 30 October 2025.

Costs Issues

The court determined four key costs issues:

      • Petitioning creditor’s costs: Whether Medical-Legal Appointments Limited’s costs of its winding-up petition should be payable as an administration expense
      • Administrators’ pre-administration costs: Whether the interim managers’ costs qualified as pre-administration expenses under rule 3.52 IR 2016
      • Applicant’s costs: Whether Mr Settle’s costs were automatically payable as an expense under rule 3.12(2) IR 2016
      • Personal costs order: Whether Seven Stars Legal Limited could recover costs directly from Mr Settle despite rule 3.4 IR 2016 (which treats a director’s application as made by the company)

Decision

1. Petitioning Creditor’s Costs

The court ordered that the petitioning creditor’s costs of both the winding-up petition and administration application be paid as an administration expense. Applying Irish Reel Productions Ltd v Capitol Films Ltd [2010] EWHC 180 (Ch), the court held that rule 3.12(2)’s phrase “any person whose costs are allowed by the court” encompasses costs of a winding-up petition dismissed at the same time as an administration order is made. No party opposed this order.

2. Administrators’ Pre-Administration Costs

The court declared the interim managers’ costs were pre-administration expenses under rule 3.52 IR 2016. ICC Judge Barber held that “so long as a sufficiently direct and appropriate connection can be demonstrated between the work carried out by an insolvency practitioner pre-administration and the achievement of the ultimate administration itself,” such costs qualify as pre-administration expenses. The interim managers were found to have been “highly effective in their work, in extremely challenging conditions” and their work “was all directed to the enablement of the administration that followed.”

However, the court refused the application to re-prioritise these expenses under rule 3.51(3) without a properly evidenced formal application on notice to affected parties.

3. Applicant’s Costs | No Automatic Right Under Rule 3.12(2)

Mr Settle argued that rule 3.12(2) IR 2016—which states “the costs of the applicant… are payable as an expense of the administration“—gave the court no discretion to deny his costs. The court emphatically rejected this submission.

ICC Judge Barber held that rule 3.12(2) “must be read subject to section 51 of the Senior Courts Act and paragraph 13(1)(f) of Schedule B1.” By operation of rule 12.41 IR 2016, CPR r.44.2 was “plainly engaged.” The court was “fortified in that conclusion” by Ardawa v Uppall [2019] EWHC 1663 (Ch).

Applying the “costs follow the event” principle under CPR 44.2, the court found Mr Settle was not the successful party. His pre-pack application had been “roundly rejected” and different administrators appointed. The court held Seven Stars was “in substance the successful party” as it had successfully opposed the pre-pack and secured appointment of its chosen nominees.

Mr Settle’s recoverable costs were capped at the issue fee only. The court acknowledged his application achieved a “short reprieve” for the company, but held “the fact that the Company was not ultimately wound up… was not down to Mr Settle… but rather to the hard work of Seven Stars, supported by the Petitioner, the interim managers and the solicitor manager.“

4. Personal Costs Order | When Rule 3.4 Doesn’t Protect Directors

Seven Stars sought a personal costs order against Mr Settle under section 51 of the Senior Courts Act 1981. Mr Settle resisted, arguing rule 3.4 IR 2016 precluded this—rule 3.4 provides that once filed, a director’s administration application “is to be treated for all purposes as an application by the company.”

The court rejected this defence, holding that “rule 3.4 must be read subject to section 51 of the Senior Courts Act and paragraph 13(1)(f) of Schedule B1.”

Even if rule 3.4 made Mr Settle a “non-party” for costs purposes, the court held it was just to make a personal costs order because “Mr Settle was plainly the ‘real party’ over that period, seeking to benefit personally from his proposed pre-pack administration and conducting the litigation on self-serving evidence which he knew to be materially false, without proper regard for the interests of the Company or the creditors as a whole.”

The court found the circumstances exceptional. Mr Settle’s knowingly false evidence “tainted and distorted the whole of the first hearing, which ran late into the evening.” He had acted without transparency, failed to respond to creditors’ information requests, and “put arrangements in place to set up Precision and to line up a short, covert, purported marketing process” using insolvency practitioners he had previously used for another pre-pack. “Had Mr Settle engaged constructively and transparently with the Company’s creditors and put in place a proper marketing process… the administration application could easily have been dealt with in one hearing.”

Mr Settle was ordered to pay Seven Stars’ costs up to and including the 7 February 2025 hearing personally, without recourse to the insolvent estate, subject to detailed assessment if not agreed.

The court declined to make a personal order for costs after 7 February 2025, recognising Mr Settle’s neutral stance at the resumed hearing and that he corrected the false evidence in his third witness statement (albeit without apology or adequate explanation). Those later costs were ordered as an administration expense.

The court distinguished Med-Gourmet Restaurants Ltd v Ostuni Investments Ltd [2013] BCC 47 (where both sides’ costs were allowed as expenses despite misleading information), noting “there appears to have been little or no debate on costs” in that case and emphasising that “judicial rulings on costs are highly fact-specific.“

Key Takeaways for Practitioners

1. Directors’ personal exposure persists: Rule 3.4 IR 2016 does not shield directors from personal costs orders under section 51 SCA 1981 where they are the “real party” pursuing the litigation for personal benefit with dishonest evidence. This applies even though the application is formally treated as made by the company.

2. Rule 3.12(2) is not automatic: Courts retain discretion to deny or cap applicant’s costs as administration expenses. Rule 3.12(2) must be read subject to section 51 SCA and CPR 44.2 applies via rule 12.41. Applicants who fail to achieve their sought relief (particularly failed pre-packs) risk recovering only nominal costs.

3. Conduct matters significantly: Knowingly false witness evidence justifies exceptional costs sanctions including personal liability, even where the substantive application is initially well-founded. Lack of transparency, covert pre-pack arrangements, and failure to engage constructively with creditors will compound costs exposure.

4. Pre-administration costs require direct connection: Interim managers’ costs qualify as pre-administration expenses under rule 3.52 where “sufficiently direct and appropriate connection” exists to the eventual administration. However, re-prioritising such expenses under rule 3.51(3) requires formal application with proper evidence—creditors’ approval alone is insufficient.

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£70,000 Costs Order Upheld Against Unrepresented Tenants For Vexatious Conduct In The FTT (Property Chamber)

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Coogan v Taheri [2025] UKUT 293 (LC)

The Upper Tribunal has dismissed an appeal against a £70,000 costs order made by the First-tier Tribunal (Property Chamber), confirming that unrepresented parties pursuing serious allegations without foundation can face substantial costs sanctions under rule 13(1)(b) of the Tribunal Procedure Rules 2013.

The Costs Dispute

Steven and Louise Coogan, unrepresented tenants of residential premises in London, brought multiple applications before the FTT against their landlords. Following a two-day hearing where only one minor allegation from their section 22 notice was substantiated – a 17-year-old statutory declaration matter – the landlords applied for costs under rule 13(1)(b).

The FTT made a costs order for £70,000, finding the tenants had acted unreasonably in bringing and conducting their applications. The tenants appealed, challenging both the finding of unreasonable conduct and the tribunal’s exercise of discretion in making the order.

The Costs Arguments

The landlords’ costs application rested on two grounds. First, they argued the tenants had pursued obviously hopeless allegations, noting that beyond the single substantiated matter from 2007, other allegations were unsupported by documents, inherently implausible, legally flawed, or too historical to be relevant to a manager appointment application.

Second, they contended the tenants had pursued serious allegations vexatiously, pointing to repeated unfounded allegations of harassment and fraud culminating in Mr Coogan’s skeleton argument accusing them of Bribery Act offences and comparing their conduct to torture of prisoners of war.

The tenants countered that their position reflected a genuine dispute legitimately pursued over 17 years of poor landlord-tenant relations, emphasising their substantial property improvements and reasonable concerns about contributing 25% towards roof repairs affecting only upper floors.

The Three-Stage Willow Court Test

The Upper Tribunal confirmed the established approach from Willow Court Management Co v Alexander [2016] UKUT 290 (LC), which requires sequential consideration of three questions:

  1. Has the party acted unreasonably?
  2. Should a costs order be made given any unreasonable conduct found?
  3. What should be the terms of any order?

At stage one, unreasonable conduct follows the Ridehalgh v Horsefield definition – conduct that is vexatious and designed to harass rather than advance case resolution. The acid test remains whether the conduct permits a reasonable explanation.

Stage One | Finding of Unreasonable Conduct

The FTT had properly considered the tenants’ unrepresented status but located them within the spectrum of unrepresented litigants, noting Mr Coogan’s property experience and Mrs Coogan’s advocacy skills. The Upper Tribunal rejected the argument that this imposed a higher standard, finding the FTT was correctly assessing what behaviour could reasonably be expected from these particular unrepresented parties.

Crucially, the FTT made a finding of fact that Mr Coogan was “willing to say whatever suited his purpose, regardless of its truthfulness.” The Upper Tribunal confirmed this amounted to a finding of dishonesty, noting that recklessness about truth falls within the classic definition of deceit.

The costs judgment had to be read alongside the substantive judgment and underlying materials, including the skeleton argument containing allegations of deliberate falsehoods, harassment, unlawful eviction, fraud, bribery, and modern slavery. Without a hearing transcript, the tenants could not discharge their burden of proving the FTT’s evaluation was wrong.

Stage Two | Exercise of Discretion

The FTT characterised this as a “bad case” where “obviously bad points were pursued vigorously” and “serious allegations of fraud and bad faith were bandied about vexatiously.” The Upper Tribunal found this assessment was open to the FTT based on the evidence.

The tribunal confirmed that “vexatiously” was used in its ordinary sense – conduct designed to harass rather than advance case resolution. The skeleton argument’s extensive allegations of criminal behaviour and misconduct supported this characterisation.

While a different tribunal might have exercised discretion differently, the FTT had properly directed itself on the law, considered relevant matters, and reached a rational conclusion.

The Appeal Decision

The Upper Tribunal dismissed the appeal on both grounds. The fact that the landlords subsequently voluntarily appointed the same manager the tenants had proposed did not vindicate the tenants’ approach, particularly given the FTT’s evaluation of how the application had been conducted.

The £70,000 costs order stands as a significant exception to the FTT’s usual no-costs approach, demonstrating that pursuing serious allegations without foundation can trigger substantial costs sanctions even for unrepresented parties.

This decision reinforces that rule 13(1)(b) provides meaningful costs protection for respondents facing vexatious tribunal applications. The three-stage Willow Court framework remains the established approach, with unreasonable conduct assessed objectively against the Ridehalgh standard. While unrepresented status remains relevant at stage one, tribunals can properly differentiate between different types of unrepresented litigants when assessing reasonable expectations of conduct.

Unreasonable conduct and costs in the First-tier Tribunal

Costs Of And Incidental To Proceedings In The Case Of Compulsory Purchase – Upper Tribunal (Lands Chamber) guidance on costs awards and the scope of proceedings, relevant to tribunal costs jurisdiction principles.

The Power To Strike Out Points Of Dispute In The First-Tier Tribunal – Upper Tribunal decision addressing vexatious conduct and abuse of process in FTT proceedings.

Unreasonable conduct and costs in the First-tier Tribunal – Contains detailed analysis of the Willow Court three-stage test and unreasonable conduct standards for unrepresented parties.

Costs On Indemnity Basis For Wasted Hearing Due To Unreasonable Adjournment Application.

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Background

The costs determination arose from Century Property (Leeds) Limited’s successful application for mandatory injunctions to enforce a judgment debt against Dr Jason Aldiss’s self-invested personal pension (SIPP). The underlying judgment debt of £402,500 stemmed from an order made by Master Eastman on 31 October 2023, which was subsequently assigned to Century Property on 1 December 2023.

The enforcement proceedings involved Century Property obtaining a charging order over Dr Aldiss’s SIPP on 11 June 2024, with the total sum due reaching £450,939 by 29 April 2025, accruing interest at £88.22 daily. The SIPP, valued at £618,249.94 as of 16 April 2025, could not be accessed until Dr Aldiss reached his 55th birthday on 17 August 2025.

The application proceedings involved two hearings. At the first hearing, Dr Aldiss, appearing as a litigant in person, successfully applied for an adjournment to gather evidence to respond to Century Property’s application. Despite being granted this adjournment, Dr Aldiss failed to serve any evidence and provided no explanation for this failure. Shortly before the second hearing in April 2025, Dr Aldiss made an application to the Court of Appeal for permission to appeal the original Tomlin Order, and at the second hearing, he unsuccessfully sought both an adjournment and a stay of enforcement proceedings.

Following the court’s judgment on 4 June 2025 allowing Century Property’s application, the parties were directed to submit written representations on consequential matters, including costs, by 30 May 2025. Dr Aldiss’s response to Century Property’s statement of costs was delayed due to an injury, with his submissions ultimately provided on 9 June 2025.

Costs Issues Before the Court

The court was required to determine three principal costs issues following the successful enforcement application. First, whether Dr Aldiss should bear Century Property’s costs or whether the circumstances justified departing from the general rule under CPR 44.2(2)(a) that the unsuccessful party pays the successful party’s costs.

Second, the court needed to consider the appropriate basis of assessment. Century Property sought its costs on the indemnity basis, arguing that Dr Aldiss’s conduct throughout the proceedings was sufficiently unreasonable to take the case “out of the norm” as established in Excelsior Commercial and Industrial Holdings Ltd v. Salisbury Hannah Aspden & Johnson [2002] EWCA Civ 879. The alternative was assessment on the standard basis.

Third, the court was asked to summarily assess the quantum of costs. Century Property submitted two statements of costs: the first dated 28 April 2025 for £55,363.02 (including VAT) covering both hearings, and the second dated 29 May 2025 for £2,204.41 (including VAT) for work on consequential matters, totalling £57,567.43. The court needed to determine whether these costs were reasonable and proportionate in accordance with CPR 44.3(5) and 44.4.

The Parties’ Positions

Dr Aldiss advanced four principal arguments against any costs order. He emphasised his status as a litigant in person who found the litigation uniquely stressful as it concerned both his reputation and his sole retirement asset. He contended that the enforcement application was premature given that his 55th birthday was not until August 2025. He pointed to his recent application for permission to appeal the Tomlin Order as evidence of genuine concerns about its validity. Finally, he maintained that his challenges were not designed to delay enforcement but reflected legitimate concerns about the underlying settlement.

Regarding the basis of assessment, Dr Aldiss argued for the standard basis, relying on the same grounds he had advanced against any costs order being made.

On quantum, Dr Aldiss challenged the costs as disproportionate and sought only nominal costs. He specifically criticised Mr Toby Starr’s hourly rate of £685 and the Grade C associate solicitor’s rate of £420 as significantly exceeding guideline rates without justification for enhancement. He argued that the claims for work on documents (£14,375), email correspondence, and counsel fees (£15,405) were excessive without proper breakdown or itemisation. He alleged duplication of work and excessive time on routine tasks, suggesting the statements had been “padded out”.

Century Property’s position was straightforward on liability: having succeeded on the application, there was no reason to depart from the general rule requiring the unsuccessful party to pay costs. On the basis of assessment, Century Property argued that Dr Aldiss’s conduct warranted indemnity costs, citing his non-compliance with the Tomlin Order, his request for an adjournment to gather evidence which he subsequently failed to serve, his unreasonable opposition to the application, his unsubstantiated challenges to the Tomlin Order’s validity, and his failed attempts to adjourn the second hearing and stay enforcement. Century Property maintained that this conduct took the case “out of the norm”.

On quantum, Century Property defended its costs as reasonable given the unusual nature of the application, which had only been considered in three reported first instance cases. Century Property made no specific submissions responding to Dr Aldiss’s detailed criticisms of the costs claimed.

The Court’s Decision

On the principle of costs liability, the court applied the general rule under CPR 44.2(2)(a) and ordered Dr Aldiss to pay Century Property’s costs. The court found that none of Dr Aldiss’s four grounds provided sufficient reason to displace the general rule. Whilst acknowledging his status as a litigant in person and the litigation’s impact, the court noted that Dr Aldiss had “vigorously fought, but lost, the application”. The prematurity argument had already been dismissed in the substantive judgment at paragraph 53(e). The pending appeal application did not justify departing from the general rule, and whilst not doubting Dr Aldiss’s sincerity, the court noted he had done nothing to substantiate his validity challenges despite being given opportunities to submit evidence.

On the basis of assessment, the court adopted a nuanced approach. After reviewing the principles from Excelsior Commercial and Industrial Holdings Ltd v. Salisbury Hannah Aspden & Johnson [2002] EWCA Civ 879 and Three Rivers DC v. Bank of England [2006] EWHC 816 (Comm), the court recognised that the test was unreasonableness rather than moral condemnation. The court acknowledged that the application was “far from straight-forward”, concerning an area of law with limited authority, and that Dr Aldiss was entitled to defend against enforcement directed at his sole retirement asset.

However, the court found that Dr Aldiss, as “a professional and articulate man”, understood the need to present evidence and comply with orders. His failure to serve evidence after obtaining an adjournment specifically for that purpose, without good reason or application to vary the timetable, was particularly significant. The court concluded that Dr Aldiss’s applications at both hearings were “designed to delay determination of Century Property’s application and, ultimately, enforcement of the judgment debt”.

The court ordered costs on the standard basis, except for the costs of the first hearing which were to be assessed on the indemnity basis. This reflected a balance between the unusual nature of the application and the fact that the first hearing costs were “wasted because of Dr Aldiss’ ultimately pointless application to adjourn”.

On quantum, the court conducted a summary assessment applying the principles from West v. Stockport NHS Foundation Trust [2019] EWCA Civ 1220. For the first statement of costs, the court found the solicitors’ hourly rates and counsel’s fees reasonable. However, it reduced the correspondence costs from the claimed amount to £6,000, finding the costs for correspondence with Dr Aldiss higher than expected given its “brief and succinct nature”. The court also reduced the documents costs to £13,000, finding excessive time spent on the chronology and response to Dr Aldiss’s request for information.

The court approved the second statement of costs in full at £2,204.91. The total costs allowed were £54,432.93 (including VAT), reduced from the £57,567.43 claimed. The court found this sum proportionate under CPR 44.3(5) and 44.4, considering the unusual nature of the application, the substantial sums at stake (approximately £450,000), the additional work caused by the adjournment, and Dr Aldiss’s conduct in seeking information on matters previously communicated to him. The court refused to stay the costs order for the same reasons it had refused to stay enforcement of the substantive order.

Speculative Claims, Indemnity Costs And The Effect Of An Approved Costs Budget

Solicitor’s Costs Budget Figure, Prepared on Reasonable and Proportionate Basis, Does Not Inherently Constitute Misleading or Improper Conduct Under CPR 44.11

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Background

The Vardy v Rooney case concerned defamation proceedings brought by Rebekah Vardy (the Claimant) against Coleen Rooney (the Defendant). The Claimant’s claim was unsuccessful, leading to an order by Steyn J requiring the Claimant to pay 90% of the Defendant’s costs on an indemnity basis. A subsequent hearing from 7 to 9 October 2024 before Senior Costs Judge Andrew Gordon-Saker examined preliminary issues concerning the Defendant’s Bill of Costs. The present appeal, brought by the Claimant, contested one aspect of the judgment dated 8 October 2024 concerning allegedly improper or unreasonable conduct by the Defendant’s legal team under CPR 44.11(1)(b). Specifically, the appeal focused on whether the Defendant’s solicitors had created a misleading impression during costs budgeting by understating incurred costs and criticising the Claimant’s higher figures without full transparency.

Costs Issues Before the Court

The core issue was whether the Senior Costs Judge was correct in declining to find that the Defendant’s legal representatives acted improperly or unreasonably under CPR 44.11(1)(b). If such conduct had been established, the court would then consider whether to impose a sanction under CPR 44.11(2)(a) by disallowing some of the Defendant’s recoverable costs. The appeal’s focus was strictly on the conduct of the Defendant’s legal representatives in submitting Precedent H, a costs budgeting document which must include a statement of truth. The Claimant argued that the Defendant’s lawyers created a misleading impression by providing understated incurred costs figures without clarifying that these figures were estimates of what would be recoverable on a standard basis, not the actual costs incurred.

The Parties’ Positions

The Claimant contended that the Defendant’s legal team failed to be transparent about their Precedent H figures, leading to a misleading comparison with the higher costs figures in the Claimant’s Precedent H. This lack of clarity allegedly prevented an accurate assessment of costs and improperly influenced the costs budgeting process. The Claimant argued that this constituted unreasonable and improper conduct, warranting a sanction under CPR 44.11.

Conversely, the Defendant maintained that their Precedent H figures were prepared accurately based on a reasonable and proportionate assessment of costs, as they believed was required by CPR guidelines. The Defendant’s team posited that they assumed the Claimant’s figures were similarly prepared, thus negating any intent to mislead. The Respondent’s Notice added that no adverse inferences could be drawn against the Defendant’s counsel or their solicitors without waiving privilege or having sought cross-examination.

The Court’s Decision

The High Court upheld the Senior Costs Judge’s decision, finding that the Claimant had not met the burden of proving that the Defendant’s legal team acted improperly or unreasonably. The judge acknowledged some lack of transparency but concluded it fell short of misconduct under CPR 44.11. The court identified no misleading conduct that would meet the narrow definitions of “unreasonable” or “improper” as clarified in Bamrah v Gempride Ltd. The court reasoned that the Defendant’s legal team might reasonably have assumed the Claimant’s costs figures were similarly adjusted for proportionality. Therefore, the submission that the Defendant’s legal team should have been more transparent was accepted as a justified criticism but did not rise to the level of unreasonable or improper conduct requiring a sanction.
Ultimately, the appeal was dismissed, reinforcing the importance of clear and transparent communication in costs budgeting while recognising that failure to provide perfect transparency does not inherently constitute actionable misconduct under CPR 44.11.

High Court Reinstates Default Costs Certificate Despite Invalid Email Service Of N252

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Following the making of a wasted costs order against them, the Claimants’ solicitors, Kesar, agreed via their principal Mr Kesar “to accept service by email as [long as] this is reciprocated”. Mr Donnelly, for the Defendant replied “No problem. Yes I’m happy to agree that moving forwards service of documents by email between us is accepted”.

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

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In this short judgment, Master James (costs judge) dealt with an application by the paying party for disallowance of the Claimant’s costs on grounds of unreasonable and improper conduct.

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CPR 44.11: Misconduct in detailed assessment proceedings

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There have been number of cases recently dealing with alleged misconduct in the course of detailed assessment proceedings and applications under CPR 44.11. In this latest decision, an appeal from the Senior Courts Costs Officer, the High Court upheld the decision of Deputy Master Campbell (formerly Master Campbell) that notwithstanding a number of mis-certifications in the Bill of Costs these were all explainable errors none of which amounted to unreasonable or improper conduct under CPR 44.11.

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Applications concerning misconduct or wasted costs: Deciding whether to make a wasted costs order

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