CPR 47.20(1) Decides Who Is Entitled to the Costs of Assessment, Not Where the Money Comes From | Detailed Assessment Is Not New Proceedings

The Senior Courts Costs Office’s decision in Lemos and others v Church Bay Trust Company and others [2026] EWHC 2402 (SCCO) clarifies the scope of CPR 47.20 and the status of detailed assessment as part of existing proceedings, not new litigation.

Background

The claimants brought a section 423 Insolvency Act 1986 claim under CR-2016-008560, dismissed following trial in June and July 2023. An order dated 18 October 2023 provided by consent that the claimants pay the defendants’ costs on the standard basis, to be assessed by detailed assessment if not agreed, with £957,814 on account.

The Defendants served a Form N252 Notice of Commencement, with the bill of costs, on 27 June 2024. A consent order dated 14 August 2025 added BCR Legal Assist Limited, the second and third claimants’ ATE insurer, as an interested party. A preliminary issue concerning the status of orders made by ICC Judge Jones in relation to costs budgeting was heard on 23 September 2025 and determined by judgment dated 18 November 2025. The bill was subsequently settled at £957,814, leaving only the costs of assessment in dispute.

Costs Issues Before the Court

The second and third claimants applied, supported by the defendants, for an order that BCR Legal Assist Limited be jointly and severally liable with them for the defendants’ costs of the detailed assessment proceedings, with a 100% contribution inter se. The application was expressly not a non-party costs order application, nor one under section 51 of the Senior Courts Act 1981. It was put solely under CPR 47.20(1)(b), with reference to the CPR 47.20(3) factors.

The Parties’ Positions

Mr Waszak, for the second and third claimants, submitted that CPR 47.20(1) is a starting point only, makes no mention of who pays, and that 47.20(1)(b) confers a discretion to be exercised by an evaluative judgment as to where justice lies, relying on Hickinbottom LJ in Sirketti v Kupeli at paragraph 5(i). Mr Teasdale, for the defendants, argued that no real party test was needed because BCR Legal Assist Limited was a party, and observed in reply that CPR 47.20 does not say who should do the paying and that no category of payer is identified, referring to “all the parties” in 47.20(3)(a).

Mr Nicol, for the interested party, submitted that the paying and receiving parties had already agreed that the receiving party would have its costs of assessment, and queried how the court could then make “some other order” under 47.20(1)(b). He described CPR 47.20 as “the gateway to make a costs of assessment order”.

The Court’s Decision

Costs Judge Nagalingam dismissed the application. Central to the reasoning was the court’s characterisation of what a detailed assessment is. The underlying claim, the section 423 action, constituted “the proceedings” (para 164). The detailed assessment flowed from that action under CR-2016-008560, in which the defendants held an order for costs payable by the second and third claimants (para 166).

Detailed assessment in these circumstances was therefore “not new proceedings, but in fact part of the existing proceedings which led to the costs order in the Defendants’ favour” (para 167). The judge restated the point at para 180: detailed assessment proceedings are “not a new set of proceedings but rather a procedure that follows where it is impracticable for the originating court to maintain the case for the purpose of assessing costs which the parties cannot agree”.

From that characterisation followed the conclusion at para 181 that “CPR 47.20 cannot be used to alter an existing order for costs”. The second and third claimants’ primary liability to pay the defendants’ costs of the main action could not be reversed or altered, and they did not seek to avoid it.

The judge then analysed the reach of CPR 47.20(1). The provision that the receiving party is entitled to the costs of the detailed assessment proceedings was described as “the usual order” (para 170). Critically, CPR 47.20(1) “does not dictate the source or sources of funds a paying party calls on when the sum they are liable for has crystallised, whether by agreement or assessment”; it “simply addresses which party is entitled to the costs of the detailed assessment proceedings” (para 172).

Accordingly, the exception in 47.20(1)(b) “must be limited to the question of entitlement, rather than the source or sources of funds once the amount of the entitlement has been concluded” (para 173). The “usual order” decides entitlement “without dictating how that entitlement is later discharged”, and any exception is similarly confined (para 174). Interference under 47.20(1)(b) is concerned with “whether someone other than the receiving party ought to be entitled to the costs of the detailed assessment proceedings” (para 176).

The application did not seek to upset the usual order at all: the draft order provided for payment of the receiving party defendants’ costs of assessment (para 177). What the second and third claimants sought was to use 47.20(1)(b) “to effectively transfer their liability for the costs of the detailed assessment proceedings to the Interested Party” (para 178). Put shortly, they agreed the defendants were entitled to those costs but said they should not have to pay them (para 184).

The judge accepted, agreeing with Mr Waszak, that CPR 47.20 is not drafted in such restrictive terms that it could not be applied to an interested party, and recognised that CPR 47.20(3) does not set out an exhaustive list of factors to consider, but rather certain common factors (para 205). But the rule is “very much geared toward consideration of the conduct of the parties to a claim” (para 206).

A second strand concerned the preliminary issue hearing. Mr Teasdale had argued that the interested party would have sought their costs of the preliminary issues hearing had the point raised been accepted by the court. The judge rejected that characterisation of how liability for the costs of a point of dispute is ordinarily addressed (para 197). Had the court found against the defendants at the preliminary issue hearing, that would not necessarily have ended the detailed assessment; it would have been premature to make any order as to the costs of assessment (para 198). Nor does the fact that the assessment did not immediately continue “present an opportunity to hive off a selected element of the wider points of dispute” and make a costs order based on the de facto winner of an individual point (para 199).

It is not uncommon to win and lose various points during a detailed assessment, “but it is the overall result that matters, when contrasted with offers (if indeed any were made) and factors such as conduct” (para 200). A detailed assessment does not stop for a summary assessment of the costs of every point taken; instead, when a CPR 47.20 order is made, either party may ask the court to exercise its discretion as to any particular item or point (para 201). “The order for costs of assessment is dictated by the overall result” (para 202). The judge’s own concluding comments in the 18 November 2025 judgment, recording costs reserved with no separate order, were “an explicit explanation that the preliminary issues heard were simply part of the detailed assessment” (para 218). Listing such a hearing earlier than other dates is a function of court management and does not change that position (paras 299 to 301).

Practical Implications

This first instance decision has a direct drafting consequence. The consent order of 14 August 2025 added BCR Legal Assist Limited as an interested party and set out defined permissions: to serve and file written submissions, to file evidence, and to attend and participate in hearings as directed, limited to matters affecting the interested party’s interest (para 313). The judge observed that both the claimants and defendants “conveniently neglect to address the fact it was they who consented to the addition” with “no provision (nor by later variation or amendment) for BCR Legal Assist Limited to be liable for or contribute to the costs of assessment” (para 349). Silence on costs was treated as significant, not neutral.

Where an insurer, funder or other interested party is to be joined for the purposes of a detailed assessment, any party contemplating a later costs claim against it should address costs expressly in the joinder order, or seek a variation. Restrictions attaching to a party in its capacity as interested party cannot be applied retrospectively to the period when it was a non-party (para 312).

Practitioners should also note that the detailed assessment is part of the existing action and the CPR 47.20 order turns on the overall result. Arguments constructed around the outcome of a discrete preliminary issue, whether to claim costs or to resist them, should be reserved for the final 47.20 exercise, where the court may be asked to exercise its discretion as to any particular item or point taken.

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