CPR 47.20(1)(b) Addresses Entitlement To Assessment Costs | It Does Not Redirect Who Pays An Agreed Liability

In Joanna Lemos & Ors v Church Bay Trust Company & Ors [2026] EWHC 2402 (SCCO), a Costs Judge refused to make an ATE insurer, joined as an interested party, jointly liable for the receiving party’s costs of assessment. CPR 47.20(1)(b) was held to go to entitlement to those costs, not to who discharges a liability the paying party has already accepted. Practitioners looking to shift assessment costs onto an insurer need to know where that route ends.

Background

The underlying claim was a section 423 Insolvency Act 1986 claim, dismissed after a trial in 2023 [19]. A consent order of 18 October 2023 required the Claimants to pay the Defendants’ costs on the standard basis, with £957,814 payable on account [20]. The 2nd and 3rd Claimants held ATE cover from BCR Legal Assist Limited, with a limit of indemnity for adverse costs of £1,000,000 [43].

A BCR costs entity took over conduct of the costs negotiations in November 2023 [27]. BCR Legal Assist Limited was later added as an interested party by a consent order dated 14 August 2025 [34]. After a preliminary issues hearing on costs budgeting, Gowlings resumed conduct and on 15 January 2026 accepted £957,814 against the bill [44]. The only remaining dispute concerned the costs of assessment [9].

Costs Issues Before the Court

The 2nd and 3rd Claimants, supported by the Defendants, applied for an order that they and “BCR” pay the Defendants’ costs of the detailed assessment proceedings, jointly and severally, with BCR liable inter se for a 100% contribution [2]. The court had to decide whether CPR 47.20 permitted such an order against the Interested Party [204] and, if so, whether conduct or the reasonableness of the points taken under CPR 47.20(3) justified it [229].

The Parties’ Positions

For the 2nd and 3rd Claimants, Mr Waszak confirmed that the application was brought under CPR 47.20(1)(b) only, and was neither a section 51 application nor an application for a non-party costs order [56]. He relied on CPR 47.20(1) making no mention of who pays [51], and submitted that because BCR Legal Assist Limited was a party, it could be ordered to pay costs [50].

Mr Teasdale, for the Defendants, supported the application and submitted that CPR 47.20 identifies no category of payer, referring instead to “all the parties” [154]. Mr Nicol, for the Interested Party, observed that the paying and receiving parties had already agreed that the receiving party would have its costs of assessment [144]. He submitted that there was no power under CPR 47.20(1)(b) to make the order sought [146].

The Court’s Decision

Costs Judge Nagalingam treated the receiving party’s entitlement to the costs of the detailed assessment proceedings as the usual order under CPR 47.20(1), with CPR 47.20(1)(b) providing the exception where the court makes some other order [170], [171]. He held that CPR 47.20(1) does not dictate the source of funds a paying party calls on once its liability has crystallised; it simply addresses which party is entitled to the costs [172].

It followed that the exception must be limited to entitlement [173]. In the judge’s words, “the ‘usual order’ decides entitlement without dictating how that entitlement is later discharged” [174]. The interference that some other order permits is concerned with whether someone other than the receiving party ought to be entitled to the costs of the detailed assessment proceedings [176].

The application did not seek to upset the usual order. The draft order itself provided for payment of the Defendants’ costs of assessment [177]. Instead, the 2nd and 3rd Claimants sought to use CPR 47.20(1)(b) to transfer their liability for those costs to the Interested Party [178]. In substance, they agreed that the Defendants were entitled to the costs of assessment but said they should not have to pay them [184].

The judge placed this within the structure of the proceedings. Detailed assessment is not a new set of proceedings but a procedure within the proceedings that produced the costs order [167], [180]. He stated that “CPR 47.20 cannot be used to alter an existing order for costs.” The primary liability of the 2nd and 3rd Claimants for the main action costs could not be reversed or altered, and they did not seek that outcome [181].

Mr Teasdale’s point that CPR 47.20 does not say who pays was answered directly. The judge said that was not the subject matter of the application, which required him to address who is liable and the status of BCR Legal Assist Limited [186]. The rules generally concern who is liable to pay, not who ultimately writes the cheques [188]. The 2nd and 3rd Claimants had been free to agree the sum and then invoke their contractual right to compel the insurer to pay out [189].

The judge also rejected the premise that the insurer was the funder. Payment out on a policy is not the same as a third party funding arrangement; by using the indemnity they had paid for, the 2nd and 3rd Claimants were the funders [194]. He was not persuaded that intermeddler and real party principles had any relevance to the facts [203].

On whether the court could make the order sought, the judge did not read the rule narrowly. He agreed with Mr Waszak that “the rule is not drafted in such restrictive terms that it could not be applied to an interested party”, and recognised that CPR 47.20(3) sets out common factors rather than an exhaustive list [205].

That acceptance was limited. The judge considered CPR 47.20 very much geared toward consideration of the conduct of the parties to a claim [206]. Only the Defendants’ bill was subject to assessment, so the reasonableness of claiming a particular item applied to the Defendants only, with items disputed on behalf of the 2nd and 3rd Claimants [207].

On the merits, no point of dispute had been unreasonably taken, leaving no viable argument under CPR 47.20(3)(c) [229]. Nothing in the Interested Party’s conduct would have persuaded the judge to make some other order under CPR 47.20(3)(a) [341], [342]. The application was dismissed as lacking merit and entirely speculative [343], [344].

Practical Implications

This is a first instance decision of the SCCO. An application for some other order under CPR 47.20(1)(b) should be framed around entitlement to the costs of assessment: whether the receiving party should lose some or all of them, or, as the judge considered the rule likely envisages, whether the paying party should recover its own. A paying party that has agreed liability cannot use the rule to redirect that liability to its insurer.

Where a paying party looks to an ATE insurer, the route is contractual. The judge noted that no contractual argument was advanced and no reliance was placed on the insurer acting outside the policy [350], [351]. Solicitors for insured parties should check the policy terms and the limit of indemnity before agreeing liability for the costs of assessment.

Where an insurer is added as an interested party by consent, the parties should consider whether the order deals with costs. Here, it contained no provision for the insurer to be liable for or contribute to the costs of assessment [349]. A party wanting a direct costs remedy against an insurer should also note that the 2nd and 3rd Claimants did not pursue a non-party costs order, which the judge considered telling, albeit sensible [352].

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