CPR 45.8 Fixed Costs Apply From Provisional Track Allocation

CPR 45.8 Fixed Costs Apply To Interim Applications From Date Of Provisional Track Allocation

Fixed costs provisions under CPR 45.8 apply to interim applications from the moment of provisional track allocation, creating binding caps that cannot be exceeded without exceptional circumstances. This High Court appeal clarifies the narrow scope for departing from Intermediate Track fixed costs limits and reinforces procedural compliance requirements under Section VII of CPR Part 45.

MAZUR AND ORS V CRS LLP [2025] EWHC 2341 (KB)

In Mazur and Ors V CRS LLP [2025] EWHC 2341 (KB) the High Court allowed an appeal against a costs order made following an application to lift a stay of proceedings. The stay had been imposed due to an issue concerning the authorisation of an individual conducting litigation. The court addressed two principal costs issues: first, whether the judge at first instance, HHJ Simpkiss, had erred in law in his interpretation of the Legal Services Act 2007, which formed the basis for the costs order against the Appellants; and second, whether the judge had the power to award costs of £10,653 given the claim’s provisional allocation to the Intermediate Track, which engages the fixed costs regime under CPR Part 45. On the first issue, the court found the judge had erred in law by incorrectly relying on an SRA letter and misinterpreting section 21(3) of the 2007 Act, holding that an employee must themselves be authorised to conduct litigation and cannot merely act under an authorised person’s supervision; this legal error vitiated the basis for the costs award. On the second issue, the court held that CPR 45.8 applied as the case was on the Intermediate Track, capping recoverable costs for the interim application at a fixed sum of £333 plus a court fee of £303. The judge had not identified the ‘exceptional circumstances’ required by CPR 45.9 to depart from this cap, and the substantial compliance with Precedent U did not affect the application of the fixed costs regime. The court quashed the costs order and varied it to ‘no order as to costs’.

At the time of the hearing before His Honour Judge Simpkiss the case had provisionally been allocated to the Intermediate Track: the case was therefore one which fell within Section VII for the purposes of CPR Part 45. Accordingly, unless "exceptional circumstances" applied, a cost cap had to be applied to any award... Accordingly, the learned judge made an error in ordering the Appellants to pay the costs of the application to lift the stay (which was essentially the costs of Counsel) in the sum of £10,653. Rather, the only award that His Honour Judge Simpkiss could have made pursuant to the regime for Intermediate Track cases would have been £333 plus the appropriate court fee of £303.

Citations

Baxter v Doble [2023] EWHC 486 (Ch) When determining whether litigation is being conducted by an unauthorised person, the court must consider whether the individual has assumed responsibility for conducting the litigation and exercises professional judgment, applying the statutory definition narrowly and focusing on substance over form. Solicitors Regulation Authority v Khan [2021] EWHC 3765 (Ch) An unauthorised person cannot rely on the employer’s authorisation to carry out reserved legal activities; each individual must be separately entitled under the Legal Services Act 2007 to conduct litigation. Jetly v Secretary of State for the Home Department [2019] EWHC 204 (Admin) The court must interpret statutory rules relating to representation and litigation narrowly, assessing whether the litigation was properly conducted in accordance with the Legal Services Act 2007. R v AUH [2023] EWCA Crim 6 The conduct of litigation under the Legal Services Act 2007 is a reserved activity construed narrowly, limited to formal steps in the proceedings and excluding clerical or mechanical functions.

Key Points

Where a claim has been provisionally allocated to the Intermediate Track, the fixed costs regime in Section VII of CPR Part 45 applies to interim applications, capping recoverable costs unless exceptional circumstances are identified. [69–70]
Pursuant to CPR 45.8, the recoverable costs for an interim application in Intermediate Track proceedings are limited to the fixed amount prescribed in Table 1, plus any applicable court fee. [70]
A court may depart from the fixed costs regime under CPR Part 45 only where it finds that exceptional circumstances exist, and must expressly identify such circumstances to justify any departure. [72–73]
The requirement under CPR 45.63(2) for a party to file a Precedent U costs statement before an interim hearing may be satisfied by a document that substantially complies with the rule, provided the other party is not disadvantaged. [71]
An erroneous legal basis for awarding costs—such as a finding that a party lost a point of law when in fact the law was misapplied—vitiates the costs order and entitles the appellate court to substitute an alternative costs order. [47–48, 68, 78]

"The Appellants submitted to this Court that no fixed costs should have been payable at all because the Respondent had not submitted a completed Precedent U form 24 hours before the hearing: this document is called for pursuant to CPR Part 45.63(2). I reject this argument. The Respondent did not use that particular form, but did produce a document that set out their costs. In substance, therefore, the Respondent had complied with the rule, and the Appellants were not disadvantaged in any way by the form in which the costs were presented."

Key Findings In The Case

His Honour Judge Simpkiss ordered the Appellants to pay the Respondent’s costs of £10,653 on the erroneous basis that they had wrongly raised legal objections under the Legal Services Act 2007, despite the appellate court finding that those objections had legal merit and the judge had misapplied the law [47–48, 68].
At the time of the interim hearing, the claim had been provisionally allocated to the Intermediate Track, meaning that the fixed costs regime under Section VII of CPR Part 45 applied, and the judge was not entitled to summarily assess costs beyond the fixed level without first identifying exceptional circumstances [69–70, 73].
The Respondent failed to submit a Precedent U costs statement as required under CPR 45.63(2), but the Court accepted that the submitted document substantially complied with the rule and did not cause unfairness to the Appellants; therefore, no procedural penalty applied in this regard [71].
The Court found no evidence that “exceptional circumstances” existed to justify a departure from the fixed costs limits under CPR 45.9, nor did the judge at first instance expressly identify such circumstances in making the £10,653 costs order [72–73].
Mr Justice Sheldon varied the first instance costs order pursuant to CPR 52.20(2), substituting it with an order of “no order as to costs”, holding that although lifting the stay was justified due to subsequent developments, the erroneous legal arguments made by the Respondent could not support a costs award against the Appellants [77–78].

"There was no indication in the judgment, or in the transcript of the hearing, that the learned judge considered that there were 'exceptional circumstances' in this case. Moreover, if the 'exceptional circumstances' were the arguments about the proper interpretation of the LSA then they would not have justified an award of costs above the cap in any event, for the reasons given above."

The High Court’s decision in Mazur & Anor v Charles Russell Speechlys LLP [2025] EWHC 2341 (KB) confirms that CPR 45.8 fixed costs apply from the moment of provisional Intermediate Track allocation.

Background

The case originated from a claim brought by the Respondent law firm, Charles Russell Speechlys LLP, to recover unpaid legal fees totalling £54,263.50 from the Appellants, Mrs Julia Mazur and Mr Jerome Stuart. Goldsmith Bowers Solicitors (GBS) was instructed to pursue the debt recovery. A claim was issued, and the Appellants subsequently filed a Defence and Counterclaim. The Claim Form was signed by GBS, and the Particulars of Claim were signed by Peter Middleton, identified as the “Head of Commercial Litigation” at GBS.

The Appellants raised an issue regarding Mr Middleton’s authorisation, as he did not hold a current practising certificate. They applied for directions, seeking an order that the Respondent replace Mr Middleton with a qualified solicitor. The application was opposed. Acting on his own motion, Deputy District Judge Campbell ordered a stay of proceedings. He found evidence that Mr Middleton was engaging in “reserved activity” under the Legal Services Act 2007 by conducting litigation. The order required any application to lift the stay to be supported by a statement from a partner providing a full explanation. If no application was made within three months, the claim would be struck out automatically.

The Respondent applied to lift the stay. The matter came before His Honour Judge Simpkiss. The initial hearing was adjourned, and further submissions were heard on 17 December 2024. In the interim, on 2 October 2024, Mr Middleton’s involvement ceased, and he was replaced by Lisa Adkin, a qualified solicitor. On 18 November 2024, a director at GBS, Mr Robert Ashall, made a self-report to the Solicitors Regulation Authority (SRA) concerning Mr Middleton’s employment. The SRA decided not to investigate on 2 December 2024.

Costs Issues Before the Court

The primary costs issue before the court was whether the Appellants should be liable for the Respondent’s costs of the application to lift the stay, which had been summarily assessed at £10,653. This award was made following the judge’s decision to lift the stay. The appeal raised two core costs-related issues: firstly, whether the judge erred in his interpretation of the Legal Services Act 2007, which formed the basis for finding the Appellants’ challenge unsuccessful and thus liable for costs; and secondly, whether the judge had the power to award costs in that amount given that the claim had been allocated to the Intermediate Track, which attracts a fixed costs regime for interim applications.

The Parties’ Positions

The Appellants argued that the judge erred in law by concluding that Mr Middleton was entitled to conduct litigation under the supervision of an authorised solicitor. They contended this misinterpretation of the Legal Services Act 2007 was the foundation for the costs order against them. They further submitted that the case was subject to CPR Part 45 as it had been allocated to the Intermediate Track. Consequently, the recoverable costs for an interim application were fixed at £333 plus a court fee of £303, pursuant to CPR 45.8. They also argued the Respondent had failed to comply with CPR 45.63 by not filing a completed Precedent U form.

The Respondent argued that the judge was entitled to make the costs order as they were the successful party on the application. They contended the fixed costs regime under CPR Part 45 did not apply because the claim was only formally allocated to the Intermediate Track at the conclusion of the hearing before HHJ Simpkiss. They also submitted that their costs statements, though not on a Precedent U form, substantially complied with the rules.

The Court’s Decision

The High Court allowed the appeal and quashed the costs order. On the first issue, the court found that HHJ Simpkiss had erred in law by relying on the SRA’s letter and concluding that section 21(3) of the Legal Services Act 2007 permitted an employee to conduct litigation under supervision. The court held that the LSA draws a clear distinction between authorised persons and their employees. An employee is not entitled to conduct a reserved legal activity merely by virtue of their employment by an authorised entity; they must themselves be authorised or fall within a specific exemption. The SRA’s interpretation in its letter was incorrect, and the judge’s reliance on it was a legal error that vitiated the basis for the costs award.

On the second issue, the court held that the case was subject to the fixed costs regime in Section VII of CPR Part 45 because it had been provisionally allocated to the Intermediate Track. CPR 45.8 therefore applied, limiting the recoverable costs for an interim application to the fixed sum of £333 plus the court fee of £303. The judge had not identified any “exceptional circumstances” under CPR 45.9 that would justify departing from this fixed cap. The award of £10,653, which was based on counsels’ fees, therefore exceeded the court’s powers. While the Respondent’s costs statement was found to be in substantial compliance, this did not alter the application of the costs cap.

The court rejected the appellants’ argument that no costs should be payable due to non-compliance with CPR 45.63. Although the respondent had not used a Precedent U form, their cost statements provided sufficient detail. The court found substantial compliance with the rule, noting the appellants suffered no disadvantage from the alternative format.

The court varied the order of HHJ Simpkiss to “no order as to costs” to reflect the fact that while the application to lift the stay was correctly granted (as Mr Middleton was no longer involved), the Respondent’s primary legal argument on the point had been erroneous. The court declined to make any other orders, such as striking out the claim or referring individuals to the SRA, leaving any further regulatory action to the SRA’s discretion.

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