The King’s Bench Division’s decision in Lodhia v Twelve Trees Management Company (Bromley-by-Bow) Limited & Ors [2026] EWHC 1177 (KB) addresses the costs consequences of discontinuance where a claimant sought to displace the usual rule under CPR 38.6 on multiple grounds.
Background
Mr Amar Lodhia, a leaseholder at the Maltings residential estate in East London, brought defamation and malicious falsehood claims against five defendants: Twelve Trees Management Company (Bromley-by-Bow) Limited (“TTMC”), the corporate entity managing the estate; Urang Group Limited trading as Urang Property Management (“Urang”), the property management company; and three individual residents who were also TTMC directors, Mr Thomas Squires (the third defendant), Mr Andrew Cregan (the fourth defendant), and Mr Tasleem Malleck-Amode (the fifth defendant). Mr Lodhia described himself as a legal consultant, social entrepreneur, and public interest advocate. He worked as a supervised legal consultant at JSC Chambers and was undertaking a postgraduate degree at the University of Law.
The claim arose from a newsletter sent to leaseholders on 6 March 2025, authored by Mr Squires and distributed by Urang. The newsletter criticised Mr Lodhia’s litigation activities, accused him of lying and making baseless allegations, stated that he was bankrupt and had no formal legal training, and referred to a previous general civil restraint order made against him. It encouraged leaseholders to seek independent legal advice before acting on his recommendation to withhold service charge payments.
Proceedings were issued on 15 May 2025. The original Particulars of Claim sought damages for defamation and malicious falsehood against all five defendants in relation to eleven statements in the newsletter. Mr Lodhia had been made bankrupt on 10 June 2024 and was automatically discharged on 10 June 2025, meaning the claim was issued during his bankruptcy.
Rather than filing a defence, the TTMC defendants applied on 15 July 2025 for summary disposal, seeking: a declaration under section 10 of the Defamation Act 2013 that the court lacked jurisdiction to hear defamation claims against the fourth and fifth defendants; strike-out or summary judgment on remaining claims against those defendants; strike-out or summary judgment on the malicious falsehood claim against the first and third defendants; and strike-out of paragraphs concerning the defendants’ insurance position. By order dated 13 November 2025, Steyn J listed the summary disposal application and a trial of preliminary issues as to meaning for hearing on 21 and 22 January 2026.
On 11 January 2026, Mr Lodhia applied to amend his Particulars of Claim. The proposed amendments deleted the fourth and fifth defendants entirely, abandoned all malicious falsehood claims, reduced the statements complained of from eleven to six, and removed the paragraphs concerning insurance. This conceded the summary disposal application in its entirety, despite Mr Lodhia having previously described it as “misconceived”.
On 15 January 2026, Mr Lodhia applied to postpone the January hearing, which was granted on 19 January 2026 by Collins Rice J, who attached particular weight to a letter from Dr Myrto Tsakopoulou, a Complex Emotional Needs and Complex Trauma Lead Psychologist at East London NHS Foundation Trust, dated 15 January 2026. That letter stated that Mr Lodhia’s treatment had been extended and that he was required to attend hospital on Thursdays, one of which fell during the listed hearing dates. The defendants subsequently raised questions about the authenticity of that letter.
A relisting appointment took place on 12 February 2026, which Mr Lodhia failed to attend. By order dated 16 February 2026, the matter was relisted for 6 and 7 May 2026. On 19 February 2026, Mr Lodhia applied again to postpone the May hearing on the grounds that his preferred counsel, Mr Chiffers, was unavailable. On 4 April 2026, he applied for a stay of proceedings until 30 September 2026 to facilitate mediation. Both applications were refused by Steyn J on 17 April 2026.
On 29 April 2026, Mr Lodhia made a further application to postpone the May hearing, supported by his tenth witness statement, which explained that he had only recently become aware that he was required to sit oral assessments at the University of Law on 6 and 7 May. Steyn J refused the application as originally framed but, in light of a subsequent witness statement indicating that the 6 May assessment could be rescheduled, ordered that the hearing proceed on 6 May only. She also expressed concerns about the authenticity of documents exhibited by Mr Lodhia and the truthfulness of his witness statement, and made directions for further evidence to address those concerns.
On 30 April 2026, Mr Lodhia filed a notice of discontinuance of the entire claim. Steyn J directed that the 6 May hearing be shortened to half a day to deal with consequential matters and outstanding costs issues. The hearing before Linden J took place on 6 May 2026. Mr Lodhia appeared in person. Jonathan Price KC and Percy Preston appeared for the TTMC defendants, instructed by rradar Limited. Greg Lazarev of Lazarev Cleaves LLP appeared for Urang. Judgment was handed down on 18 May 2026.
Costs Issues Before the Court
The costs issues arising at the 6 May hearing were numerous and arose against the backdrop of Mr Lodhia’s notice of discontinuance filed on 30 April 2026. The court was required to determine the costs consequences of several distinct procedural events, as well as the applicable basis of assessment and the question of an interim payment on account.
Before turning to the substantive costs issues, two preliminary points were raised by Mr Lodhia. First, he argued that his trustees in bankruptcy, Begbies Traynor, and his father (who held a lasting power of attorney over his property and financial affairs) should have been served before any costs determination could be made. Second, he contended that he was not personally liable for any adverse costs order, on the basis that such liability would attach to the bankruptcy estate. The court dealt with both points as threshold matters before proceeding to the substantive costs questions.
The substantive costs issues were: first, the costs of the summary disposal application brought by the TTMC defendants on 15 July 2025, which was effectively conceded by Mr Lodhia’s amendment application of 11 January 2026; second, the costs of the three applications to postpone hearings and the application for a stay, all made by Mr Lodhia; third, the costs consequences of the notice of discontinuance filed on 30 April 2026, with the central question being whether the presumption under CPR Rule 38.6 should apply or whether the court should “order otherwise”; fourth, whether any costs awarded in the defendants’ favour should be assessed on the indemnity basis; and fifth, whether an interim payment on account of costs should be ordered pursuant to CPR Rule 44.2(8) and, if so, in what sum.
The indemnity basis issue was ultimately not pursued by Mr Price KC at the hearing, on the basis that liberty to apply would be preserved pending the outcome of the further evidence directed by the court. The remaining issues were determined on the evidence before the court on 6 May.
An additional procedural matter arose from the TTMC defendants’ invitation to the court to make directions for further evidence in light of concerns about the veracity of certain evidence given by Mr Lodhia and the authenticity of certain documents produced by him. These concerns went beyond those already addressed in Steyn J’s 29 April Order and formed a significant part of the hearing.
The Preliminary Issues
Bankruptcy
Mr Lodhia’s position throughout the proceedings was that he was not personally liable for any adverse costs order and that such liability would attach to the estate in bankruptcy. He relied on sections 283 and 306 of the Insolvency Act 1986 and submitted that the trustees should be given the opportunity to respond to what he called “the potential non-party costs order”.
Linden J rejected this argument. The judge held that any order against Mr Lodhia would not be a bankruptcy debt or liability for the purposes of section 382 of the Insolvency Act or Part 14 of the Insolvency Rules 2016, given that there was no relevant “obligation incurred before the commencement of the bankruptcy”. The newsletter was not written until after his bankruptcy, and any order would be made long after the bankruptcy and his discharge from it.
In any event, the trustees had been aware of the proceedings for some time and had not expressed any wish to participate or make representations. Their view, which the court shared, was that Mr Lodhia was liable in respect of any order for costs against him and they were not. The court noted that if Mr Lodhia thought the trustees should be before the court, it was open to him to take steps to bring this about.
Lasting Power of Attorney
Mr Lodhia argued that his father should have been served in accordance with CPR Rules 6.13 and 6.25 because he had entered into a lasting power of attorney with his father in respect of his property and financial affairs. He submitted that he was a “protected party” to whom CPR Rule 21 applies.
Linden J rejected this argument. There was no evidence that Mr Lodhia lacked capacity or had lacked capacity at any stage of the litigation. His Particulars of Claim and other documents boasted in detail of his alleged public profile, abilities and successes. He described himself as working as a legal consultant at JSC Chambers, being responsible for day-to-day handling of leaseholder disputes, having considerable success in pre-action litigation, and having brought at least two other claims in his own name.
While Mr Lodhia described himself as disabled and vulnerable, and submitted evidence from Dr Tsakopoulou stating that he had complex post-traumatic stress disorder and required reasonable adjustments, Dr Tsakopoulou did not suggest that Mr Lodhia lacked capacity to conduct the proceedings. The judge observed that the evidence fell far short of establishing lack of capacity, and that Mr Lodhia’s performance at the hearing cast real doubt on whether he continued to experience the impairments identified by Dr Tsakopoulou.
The Costs of the Summary Disposal Application
Mr Lodhia sought dismissal of the summary disposal application on the ground that it was “otiose” in light of his proposed amendments, and sought his costs of that application and the amendment application on the basis that the defendants had failed to comply with the Pre-Action Protocol for Media and Communications Claims (“the PAP”).
In his fourth witness statement, dated 10 January 2026, Mr Lodhia said he had sent a letter to the solicitors for TTMC on 6 March 2025 which complied with the PAP, and a further letter of claim to TTMC and Urang on 7 March 2025 by first class post. He stated that no defendant responded at all to either letter of claim, and there was no acknowledgement, substantive response, or engagement of any kind with the Protocol. As he had no factual confirmation as to which individual defendants authorised, edited, approved or authored the newsletter, he was forced to plead on the basis of reasonable inference. He sought further information in July 2025 but did not receive it until he read the witness statements supporting the summary disposal application. The defendants should therefore pay his costs.
The defendants’ position was that there was no breach of the PAP, nor any failure to engage in pre-action correspondence. The amendment application conceded the summary disposal application and discontinued against the fourth and fifth defendants. Mr Lodhia should pay the costs of the summary disposal application and the costs thrown away by reason of the amendments regardless of the outcome of the application for costs on the subsequent discontinuance of the proceedings as a whole.
Linden J agreed that Mr Lodhia should pay the defendants’ costs of the summary disposal application, the discontinuance against the fourth and fifth defendants, and the amendment application in any event. The judge did not accept that there was any breach of the PAP by the defendants, nor any failure to engage reasonably with Mr Lodhia in correspondence. Even if this was wrong, the judge did not accept that this made any difference to Mr Lodhia’s approach to starting, pleading and pursuing his case. His approach in the correspondence to the arguments which subsequently formed the basis of the summary disposal application was also unreasonable and directly gave rise to the need to make that application.
The PAP does not specifically require a prospective claimant or defendant to identify who authorised, edited, approved or authored the publication, nor does CPR Practice Direction 53B specifically require these matters to be pleaded. The principal target of the claim in defamation is the publisher of the statements complained of. In this case the publisher was TTMC, as was apparent on the face of the newsletter and as Mr Lodhia was well aware.
There was an issue as to whether Mr Lodhia actually asked who authorised, edited, approved or authored the newsletter prior to commencing proceedings. In the 6 March 2025 pre-action letter, the furthest he went was to seek “a written explanation of how these defamatory statements were approved for publication and by whom”. There was also an issue as to whether the second pre-action letter of 7 March 2025 was really sent, given that it was sent by post only and not by email, and the defendants’ evidence was that it was not received.
Even assuming the 7 March letter was posted and received, the judge did not accept that there was a failure to engage or a breach of the PAP. Rradar responded to the 6 March letter on 20 March 2025, pointing out that Mr Lodhia’s letter did not comply with the PAP in that it did not identify the specific statements complained of or give details of the serious harm alleged. Instead of providing the information requested, Mr Lodhia set a deadline of 24 March for various demands to be met. The correspondence continued, and on 24 March he stated that proceedings had been issued on CE File, despite not being under any limitation pressure.
The original Particulars of Claim, dated 25 March 2025, correctly pleaded that Mr Squires was the principal author and editor of the newsletter. The case against the fourth and fifth defendants was not pleaded simply on the basis that they were authors; it included allegations about piercing the corporate veil and particulars of the case that they were not acting as agents of TTMC. This was not a case in which the pleader based his case on an allegation that they were authors in circumstances where the true position had not been revealed to him in correspondence, and then discontinued that case when the true position became apparent.
On 13 June 2025, rradar wrote to Mr Lodhia stating that he was right to plead that Mr Squires was the author but arguing that there was no viable case against the fourth and fifth defendants. The terms of section 10 of the Defamation Act 2013 were set out, as were the flaws in Mr Lodhia’s case. The difficulties with piercing the corporate veil were also pointed out. He was invited to discontinue against the fourth and fifth defendants and told that an application would be made if he did not do so.
He did not do so. Instead, Mr Lodhia continued robustly to dismiss rradar’s arguments, to assert that the fourth and fifth defendants were personally liable, and to contest other aspects of the defendants’ position. On 26 June 2025, rradar wrote again, repeating the arguments which subsequently formed the basis for the summary disposal application and stating that they would seek instructions to make that application if he persisted. There was a further attempt to persuade Mr Lodhia on 30 June 2025, but he continued to dismiss the defendants’ arguments up to and including 15 July 2025.
The judge rejected Mr Lodhia’s argument that there was unreasonable conduct by the defendants prior to issuing the summary disposal application. He was given every opportunity to make concessions which would avoid the need for an application to the court, but he did not do so. If anyone was unreasonable it was Mr Lodhia in filing his claim so soon and then failing to engage with the defendants’ arguments, which were clearly explained to him but ignored.
As to causation, Mr Lodhia accepted that the position was clear from the witness statements served in support of the summary disposal application. However, this did not cause him to reflect or alter his approach. On 15 July 2025 he immediately responded that the defendants’ arguments were “misconceived”. On 20 August 2025, he filed a formal response which again described the summary disposal application as “misconceived” and continued to assert his claims as pleaded. It was not until 11 January 2026 that he indicated he wished to concede the summary disposal application.
When asked why, if the information he said he sought was critical, he did not discontinue shortly after 15 July when he had this information, Mr Lodhia told the court that he understood he had been ordered or required to resist the summary disposal application by Master Armstrong’s Order of 16 December 2025. The judge regretted to say that he did not regard this answer as truthful, not just because Master Armstrong’s Order did not require him to do any such thing, but also because the Order postdated by a number of months his decision to take the position that the summary disposal application was “misconceived”.
The judge was satisfied that Mr Lodhia should pay the costs of the summary disposal application given that the defendants were wholly successful. He should also pay the fourth and fifth defendants’ costs of the proceedings given that he discontinued against them: there was no change of circumstances and no unreasonable conduct on their part. He should pay the costs thrown away by reason of his application to amend given that the need to amend arose through his approach to the proceedings.
The Costs of the Postponement and Stay Applications
Mr Lodhia made three applications to postpone hearings and one application for a stay. The first postponement application, made on 15 January 2026, was granted by Collins Rice J on 19 January 2026. She attached particular weight to medical evidence in the form of a letter from Dr Tsakopoulou dated 15 January 2026, stating that Mr Lodhia’s treatment had been extended and he was required to attend hospital on Thursdays, one of which fell during the listed hearing dates.
By the time of the 6 May hearing there was an issue as to the authenticity of Dr Tsakopoulou’s letter, given that until his application on 15 January 2026, the basis for saying a postponement was required was the non-availability of Mr Chiffers. Before this, Mr Lodhia did not mention the need to attend hospital although the defendants said he must have been aware of it in December.
Linden J was willing to assume for present purposes that the 15 January 2026 letter was entirely genuine. Even on this assumption, however, Mr Lodhia should pay the costs of the first application to postpone. His emails of 22 December 2025 first proposed the postponement on the grounds that he had instructed counsel who was not available for the hearing. Insofar as that was the true reason for his application, it was an unreasonable basis for a postponement and the defendants were fully entitled to refuse to agree. Even taking his evidence about the need to attend hospital at face value, his application succeeded on a ground introduced very late in the day. The defendants’ skeleton argument had been filed on 14 January and preparations were necessarily well advanced. The just course was to order that Mr Lodhia pay any costs thrown away by reason of the postponement.
On 19 February 2026, Mr Lodhia applied to postpone the May hearing on the grounds that Mr Chiffers was not available. On 4 April 2026 he issued an application to stay the proceedings until 30 September 2026 to facilitate mediation. On 17 April 2026, both applications were refused by Steyn J. She referred to the 15 January application and noted that Mr Lodhia had failed to attend the listing appointment on 12 February 2026. She found that he had no reasonable excuse for failing to do so, particularly given that the hearing was being relisted at his request. She noted that there had been delay in the proceedings and that Mr Lodhia had had plenty of time to instruct alternative counsel or represent himself. She noted that the defendants were willing in principle to engage in mediation but agreed with them that this did not mean the proceedings should be stayed given the delays.
Linden J was satisfied that the costs of the second postponement application and the application for a stay should be borne by Mr Lodhia given that both applications failed.
On 29 April 2026, Mr Lodhia filed a further application to postpone the May hearing, supported by his tenth witness statement dated 24 April 2026. The application notice appears to have been signed by Mr Chiffers as his representative although Mr Lodhia conducted the correspondence. This explained that on 21 April 2026 he had become aware that he was required to attend oral assessments at the University of Law on 6 and 7 May 2026. He had attempted to reschedule these assessments but had been told by the Programme Lead, Ms Salome Verrell, that they could not be rescheduled.
In response, the defendants filed evidence casting doubt on the veracity of what Mr Lodhia had said in his tenth witness statement and questioning the completeness of the documents he had exhibited. Mr Lodhia then submitted an eleventh witness statement dated 29 April 2026, explaining that on 29 April he had been told that the oral assessment on 6 May could be rescheduled and he was therefore able to attend on that day but not on 7 May. His position was now that the preliminary issues as to meaning could be determined but that the issues as to costs should be postponed.
On 29 April 2026, Steyn J refused Mr Lodhia’s application as framed but, in light of his eleventh witness statement, ordered that the hearing would take place on 6 May 2026 starting at 10am. She expressly refused Mr Lodhia’s request to postpone the hearing of the issues in relation to costs. She also expressed concerns about the authenticity of certain documents exhibited by Mr Lodhia and the truthfulness of his witness statement, and made directions for further evidence to allay those concerns.
Mr Lodhia argued that his application was successful because the defendants resisted it and argued that one day would not be sufficient. Linden J held that his application was not successful in that the hearing was not vacated, as he originally asked. He did then modify his application but unsuccessfully argued that it should not deal with the issue of costs. On balance the judge took the view that he should pay the costs of this application.
The Costs of Discontinuing the Claim
Following Steyn J’s 29 April Order, on 30 April 2026 at 7.55am Mr Lodhia sent a letter offering a drop hands settlement. At 6.14pm, he emailed the defendants’ solicitors a signed notice of discontinuance of the whole claim. The covering email said that any application for costs would be resisted and referred to Mr Squires’ comments at the AGM on 29 April as unreasonable conduct relevant to costs under CPR Rule 44.2. Mr Lodhia also said that if the defendants sought their costs he intended to issue a further claim based on Mr Squires’ actions. The email concluded that the relentless nature of the litigation, and in particular Mr Squires’ actions, had had a profound and serious effect on Mr Lodhia’s health. The email did not suggest that the actions of Mr Squires, or the alleged position in relation to Mr Lodhia’s health, had caused him to decide to discontinue. No explanation for this decision was provided.
Mr Lodhia argued that the usual consequences of discontinuing proceedings, as set out in CPR Rule 38.6, should not follow. He put forward a number of reasons why the presumption identified in this rule was rebutted and the defendants’ costs should be disallowed.
Linden J applied the principles set out by Moore-Bick LJ in Brookes v HSBC Bank plc [2011] EWCA Civ 354. These provide that when a claimant discontinues, there is a presumption that the defendant should recover costs; the burden is on the claimant to show a good reason for departing from that position; the fact that the claimant would or might well have succeeded at trial is not itself a sufficient reason; if it is plain the claim would have failed, that is an additional factor in favour of applying the presumption; the mere fact that the claimant’s decision to discontinue may have been motivated by practical, pragmatic or financial reasons will not suffice to displace the presumption; if the claimant is to succeed in displacing the presumption he will usually need to show a change of circumstances to which he has not himself contributed; however, no change in circumstances is likely to suffice unless it has been brought about by some form of unreasonable conduct on the part of the defendant which in all the circumstances provides a good reason for departing from the rule.
At paragraph 10 of Brookes, Moore-Bick LJ stated that “a claimant who seeks to persuade the court to depart from the normal position must provide cogent reasons for doing so and is unlikely to satisfy that requirement save in unusual circumstances.”
The judge also referred to Nelson’s Yard Management Co v Ezieful [2013] EWCA Civ 235, in which Beatson LJ stated that “the context for the Court’s mandatory consideration of all the circumstances under CPR 44.3 is the determination of whether there is a good reason to depart from the presumption imposed by CPR 38.6.”
The judge proceeded on the assumption, derived from Scheinberg v Van Doorn [2019] EWHC 3220, that it was open to him to disallow the defendants’ costs or make an order in Mr Lodhia’s favour even without a change of circumstances, if there was unreasonable conduct on the defendants’ side. This gave Mr Lodhia the most favourable possible analytical framework.
The judge considered Mr Lodhia’s arguments individually and cumulatively but held that they did not amount to a relevant change of circumstances brought about by unreasonable conduct on the part of the defendants which in all the circumstances provided a good reason for departing from the rule. Nor did they amount to unreasonable conduct on the part of the defendants which would cause the court to disallow their costs in whole or in part.
The judge briefly addressed Mr Lodhia’s key arguments.
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- First, the alleged late disclosure of information as to authorship, editorship and publisher details, breaches of the PAP and failure to engage with the issues in correspondence had already been dealt with in the context of the summary disposal application. Insofar as the service of the statements of the third to fifth defendants in support of the summary disposal application was a relevant change of circumstances (which it was not), it occurred more than nine months before discontinuance. There was no unreasonableness on the part of the defendants in this regard.
- Second, Mr Lodhia alleged that the defendants’ position on meaning had shifted in relation to two of the six statements complained of, adding to the costs of the preliminary trial as to meaning. There was nothing in this point. The defendants’ position did not materially shift and in any event their approach had no significant impact on costs. It was Mr Lodhia’s approach to pleading the statements complained of (complaining of eleven statements and then reducing this to six several months later) which unnecessarily increased the costs.
- Third, Mr Lodhia relied on Mr Squires’ alleged defamatory statements about him at the 29 April AGM. It appeared that Mr Squires referred to the litigation and made uncomplimentary remarks which Mr Lodhia argued were implicitly about him. Assuming for present purposes that Mr Lodhia’s account and interpretation were accurate, the judge accepted that this was a recent development but did not regard it as a relevant change of circumstances. Mr Squires’ remarks were a reason for Mr Lodhia to continue with the claim rather than discontinue. Whatever Mr Squires said or implied on 29 April did not cause Mr Lodhia to discontinue. Rather, having decided that he wanted out of the litigation he alighted on this as a lever to use in an attempt to secure a drop hands settlement by threatening further proceedings, and to avoid paying the costs of the proceedings. Even if Mr Squires’ conduct was unreasonable, this was not unreasonable conduct of the litigation and in any event it had no bearing on the costs of the proceedings.
- Fourth, Mr Lodhia relied on the fact that the defendants were insured in relation to the litigation. He said there was inequality of arms or resources between the parties. This was true but it was not a change of circumstances and did not amount to unreasonable conduct. Mr Lodhia’s own position was that he was aware the defendants were insured in December 2025. The fact that they were represented by qualified and competent lawyers may be a point of difference but this had been the position throughout the proceedings. He also said that although the defendants may be liable for the costs of their lawyers, the fact that they were insured against these costs rendered it unfair that he should have to pay them. This argument was misconceived for obvious reasons.
- Fifth, Mr Lodhia relied on the alleged insolvency of TTMC, of which he implied he had first become aware from a report dated 9 December 2025. This, he said, was a change of circumstances. It also meant that TTMC would not be able to satisfy any adverse costs order. In fact, Mr Lodhia had a report dated 2 August 2025 which said that TTMC was insolvent. He relied on this report in his 20 August 2025 submissions resisting the summary disposal application and seeking to continue the litigation on all fronts. The insolvency issue was not a relevant change of circumstances and had no bearing on Mr Lodhia’s decision to discontinue or on the costs of the litigation. TTMC was insured against any liabilities in damages or costs, and in any event Mr Lodhia could recover against the other defendants.
- Sixth, Mr Lodhia relied on the fact that he was discharged from bankruptcy after proceedings were issued. The judge had dealt with the bankruptcy issue above. Mr Lodhia’s discharge was not a relevant change of circumstances and did not amount to unreasonable conduct on the part of the defendants.
- Seventh, he relied on the defendants’ refusal to accept various offers of settlement which he made and their alleged refusal to engage constructively with his proposals for mediation or other negotiation. The short answer, having considered the without prejudice materials, was that Mr Lodhia had not done better in these proceedings than any offer to settle which he made. He had recovered nothing and was liable to pay substantial costs even leaving aside the effect of his 30 April notice of discontinuance. On the other hand, the defendants did make a without prejudice save as to costs offer of settlement on 13 June 2025 which Mr Lodhia had failed to beat. They had also been prepared to engage in alternative dispute resolution through mediation. They engaged with Mr Lodhia’s proposals but it did not prove possible to reach agreement as to the terms of the mediation, let alone the terms of any settlement. There was no relevant change of circumstances and no unreasonable conduct on the part of the defendants such as would lead to any of their costs being disallowed.
- Eighth, Mr Lodhia relied on a complaint which he had made to the Solicitors Regulation Authority about a point made in the defendants’ solicitor’s fourth witness statement. Although this would ultimately be a matter for the SRA to determine, there appeared to be nothing in the point. In any event, Mr Lodhia’s complaint and the witness statement were not a relevant change of circumstance and did not amount to unreasonable conduct on the part of the defendants such as would lead the court to disallow their costs.
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The judge noted that Mr Lodhia also advanced what he described as “hopeless” arguments, including that he should not be required to pay twice given that part of the service charges which he pays goes towards TTMC’s budget for legal expenses, and that the doctrine of estoppel or approbation applied to prevent TTMC from recovering its costs. The judge observed that TTMC was entitled both to levy service charges and to claim its costs of the proceedings: there was no inconsistency and no question of double recovery.
The judge therefore ordered that Mr Lodhia would pay the costs of the proceedings up to the date of service of the notice of discontinuance. Those costs would be assessed on the standard basis, if not agreed, pending the responses to Steyn J’s 29 April Order and the judge’s directions for further evidence, and there would be liberty to apply in the light of that evidence.
Interim Payment on Account of Costs
Mr Lodhia did not advance any reason to depart from the presumption under Rule 44.2(8) that a reasonable sum should be paid on account of costs. His arguments were that no order for costs should be made in favour of the defendants and that, in any event, their Statements of Costs claimed disproportionately and unreasonably large sums. The judge held there was no good reason why an interim payment on account of costs should not be ordered in the case of both sets of the defendants’ legal representatives.
As to quantum, the judge applied the guidance given by Christopher Clarke LJ in Excalibur Ventures LLC v Texas Keystone Inc & Others [2015] EWHC 566 (Comm). Any figure ordered to be paid on account need not be “the irreducible minimum” in terms of what was likely to be recovered on a detailed assessment. A reasonable sum would often be one that was an estimate of the likely level of recovery subject to an appropriate margin to allow for error in the estimation.
As the judge understood TTMC’s Statement of Costs dated 5 May 2026, the figure of £112,779 plus VAT included the costs of the 6 May hearing rather than being limited to the costs to the service of the notice of discontinuance. In fairness to Mr Lodhia, the question whether he should pay TTMC’s costs of the 6 May hearing had not been the subject of submissions. The judge therefore reserved this issue and gave Mr Lodhia an opportunity to put in written submissions, limited to 5 pages, as to why he should not pay those costs and Urang’s costs of the hearing. The judge would then determine this matter on paper.
In the meantime, the judge worked on the rough and ready basis that approximately £25,000 of the £112,779 was in respect of the 6 May hearing so that approximately £90,000 related to the costs to service of the notice of discontinuance, which the judge treated as 30 April 2026.
Doing the best he could, the judge considered that a reasonable sum at this stage in respect of the costs to 30 April was £55,000 plus VAT. Although this was not a legally complex case, it was made more complex and expensive by Mr Lodhia’s approach. There were multiple emails, letters and witness statements from him generating voluminous material which required to be considered and responded to as appropriate. There were also the applications which generated additional costs, and there was the late postponement of the hearing in January. These considerations meant that the TTMC Defendants might well recover significantly more than £55,000 on a detailed assessment.
As for Urang’s costs, Mr Lodhia’s submission was that Lazarev Cleaves LLP had not been sufficiently involved to justify the figure of £7,364 plus VAT which was claimed. Mr Lazarev explained that in fact Urang’s costs could have been significantly higher. They instructed Counsel to advise them and thereafter had a watching brief in the sense that they were content for rradar and the TTMC Defendants to “make the going” rather than duplicate their efforts. Urang’s costs related principally to consideration of Mr Lodhia’s correspondence and witness statements. The judge rejected Mr Lodhia’s argument that Urang should not recover any of its costs.
As the judge understood Urang’s Statement of Costs, their costs to 30 April 2026 were in the order of £6,000 plus VAT. A reasonable sum at this stage in respect of those costs assuming assessment on a standard basis was £3,600 plus VAT.
Directions for Further Evidence
The judge made extensive directions for further evidence to address concerns about the veracity of certain evidence given by Mr Lodhia and the authenticity of certain documents produced by him. The judge explained to Mr Lodhia that Steyn J’s 29 April Order and these directions were not just relevant to the question whether costs should be assessed on the indemnity basis. Depending on what the evidence in response said, consideration might in due course be given to the question of proceedings for contempt of court. The judge expressly warned at paragraph 115 of the judgment that this possibility existed.
The directions covered: compliance with Steyn J’s 29 April Order; the 6 and 7 March 2025 letters of claim and associated certificates of service; Mr Lodhia’s dealings with Begbies Traynor; Dr Tsakopoulou’s letters; the role of Joseph Chiffers; and Mr Lodhia’s father’s role under the lasting power of attorney. The judge directed that the Order be served by the Defendants rather than by Mr Lodhia, noting that the experience in relation to Steyn J’s 29 April Order demonstrated that it would be “cleaner” for him not to be involved in the various witnesses’ compliance with the Order. This would ensure transparency and confidence in relation to the reliability of the responses received.
The judge gave liberty to apply to Begbies Traynor, Dr Tsakopoulou and Mr Chiffers to vary, set aside or stay the Order so far as it affected them, given that the Order had been made without giving them an opportunity to make representations.
CPR 38.6: Discontinuance And Costs – The Legal Principles
CPR 38.6 | Default Rule Disapplied On Discontinuance
CPR 38.6 | Post-Discontinuance Conduct Can Be Considered
CPR 38.6 Presumption Partially Displaced By 20% Due To Collateral Use Of Witness Statements
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