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Indemnity Costs | Unfounded Claims & Dishonest Conduct
Probate Challenger Ordered To Pay Indemnity Costs After Maintaining Baseless Opposition For Eight Years (04/11/2025)
In Burgess v Whittle [2025] EWHC 2829 (Ch), HHJ Paul Matthews held that maintaining a probate challenge without reasonable basis for eight years constituted grossly unreasonable conduct justifying indemnity costs. The court rejected the Spiers v English exception, finding the deceased’s estrangement and beneficiary changes within family provided no grounds for suspecting will invalidity. The first defendant’s last-minute concession only on the eve of trial, requiring the successful claimant to travel from Australia for an unnecessary hearing, compounded the finding of conduct outside the norm.
Are Courts Bound By Summary Assessment Principles When Ordering Pro Bono Costs Under Section 194? (09/11/2025)
In EJW Builders Ltd v Marshall [2025] EWHC 2898 (Ch), HHJ Paul Matthews reduced notional pro bono costs from £393,329 to £117,000 under section 194 of the Legal Services Act 2007, applying a broad brush approach and guideline hourly rates as a benchmark. The court emphasised that pro bono costs orders serve dual purposes—levelling the litigation playing field and funding organisations offering free legal help—and the court should “err on the side of caution” in assessment. Excessive solicitor attendances and disproportionate document work were substantially reduced despite counsel’s fees being allowed in full.
Failed Fraud Allegations Justify Indemnity Costs Order Despite Proper Conduct (09/11/2025)
In Malhotra Leisure Limited v Aviva Insurance Limited [2025] EWHC 2901 (Comm), Nigel Cooper KC ordered indemnity costs despite Aviva’s fraud allegations being properly pleaded and responsibly pursued through experienced counsel. Six factors justified the order: the exceptional seriousness of conspiracy allegations; foreseeable financial and reputational harm to the claimant; pursuit through to trial without settlement discussions; objective weakness apparent from the outset regarding the financial motive; an evolving case theory at trial with unpleaded allegations; and late withdrawal of specific allegations after substantial opposing party costs. The judgment confirms that technical compliance with pleading requirements does not prevent indemnity costs where overall circumstances take the case out of the norm.
Indemnity Costs Awarded Where Defences Were ‘Built On Deliberate Lies’ (13/11/2025)
In JSC Commercial Bank Privatbank v Kolomoisky [2025] EWHC 2909 (Ch), The Honourable Mr Justice Trower awarded the claimant indemnity basis costs on the grounds of defences built on deliberate falsehoods, significant disclosure failures, non-attendance of defendants as witnesses, belated abandonment of key arguments, and unsatisfactory expert evidence viewed in the round. The court ordered an interim payment of £76.4 million and awarded pre-judgment interest at Bank of England base rate plus 3% from payment dates, reflecting commercial borrowing costs and the serious fraud underlying the proceedings.
Indemnity Costs Awarded Where Proprietary Estoppel Claim Pursued As “Anvil For Settlement” Against Elderly Mother (19/11/2025)
In Grijns v Grijns [2025] EWHC 2853 (Ch), Master Bowles (Sitting in Retirement) awarded indemnity costs where the claimant pursued litigation as an “anvil for settlement” through invented assurances, capacity allegations raised solely for pressure, and a tactical committal application issued one month before trial. The court found the proprietary estoppel claim was based on assurances that had been constructed for litigation purposes and were wholly inconsistent with contemporaneous documents. The claimant’s conduct, viewed in the round, was outside the norm despite the defendants’ failure to mediate and rejection of settlement offers.
Detailed Assessment & Bill Defects
In Hyder v Aidat-Sarran [2024] EWHC 3686 (SCCO), Deputy Costs Judge Roy KC refused strikeout but imposed a severe 75% costs reduction under CPR 44.11 where original and subsequent bills contained multiple egregious, persistent, and unrectified defects. The court held that solicitors bear full vicarious responsibility for costs draftsmen’s failures and cannot avoid sanctions by blaming their agents; solicitors must apply proper superintendence and oversight regardless of agent involvement. The draconian sanction of strikeout was declined on a very narrow balance, but the substantial reduction reflected the seriousness of the conduct.
Part 36 Consequences In Detailed Assessment | De Minimis Form Errors Will Not Invalidate Offers (24/11/2025)
In Stockler v The Corporation of the Hall of Arts and Sciences [2025] EWHC 3080 (SCCO), Deputy Costs Judge Joseph held that a clerical error misdescribing a defendant’s Part 36 offer as a “claimant’s offer” on form N242A was de minimis and did not invalidate the offer or prevent CPR 36.17 consequences applying. The offer was clear, made shortly after pleadings closed, and provided sufficient information for evaluation; CPR 36.17(4)(c) consequences applied with interest on costs at 8% per annum until offer expiry and 14% thereafter. The court rejected arguments that Ainsworth rulings and disallowance of amendments made it unjust to apply Part 36 consequences.
Security for Costs
Security For Costs Under CPR 3.1(5) Ordered As Alternative Sanction To Debarring For Non-Compliance (05/11/2025)
In Serious Fraud Office v Smith (Thomas debarring application) [2025] EWHC 2876 (Comm), Henshaw J refused to debar Mr Thomas from participating in enforcement proceedings but ordered security for costs of £200,000 as a proportionate sanction for serious non-compliance with procedural orders. The court held that debarring is a draconian remedy of last resort and that security for costs under CPR 3.1(5) can serve as an effective alternative where breach of court orders has occurred, though the judge may consider the defendant’s history of non-payment and the proportionality of any sum ordered.
In Pickering v Thomas Mansfield Solicitors Limited [2025] EWHC 3021 (SCCO), Costs Judge Nagalingam held that Solicitors Act assessment proceedings constitute a “claim” for CPR 25.26 purposes and security for costs applications are therefore permissible. However, the application failed on the substantive test under CPR 25.27(b)(vi) because the paying party’s financial transactions—including mortgage repayments, property investments, and loan repayments—converted liquid funds into other enforceable assets rather than dissipating them. The court held that the evidential burden rested squarely on the applicant and that the paying party bore no obligation to prove ability to pay.
Proportionate & Appellate Costs Orders
CPR 63.26(2) | IPEC Costs Order Quashed Where ‘Unreasonable Conduct’ Finding Overstated Application’s Lack Of Merit (18/11/2025)
In Costa v Dissociadid Ltd [2025] EWCA Civ 1475, Lord Justice Zacaroli allowed an appeal against an immediate IPEC costs order, holding that findings of “unreasonable behaviour” under CPR 63.26(2) cannot rest on overstated characterisations of applications as “so lacking in merit” where key arguments have real prospects of success. The court found the claimant’s argument regarding scope of the damages claim was arguable and that the judge had erred in failing to address the Part 18 aspect of the application before making the costs order.
Successful Defendant’s Costs In Judicial Review Claim Reduced by 15% for Partial Failure On Discreet Issue (12/11/2025)
In R (on the application of Prestige Social Care Services Ltd) v Secretary of State for the Home Department [2025] EWHC 2860 (Admin), HHJ Tindal dismissed the judicial review claim but reduced the defendant’s costs by 15% to reflect partial failure on the Annex C1 non-genuine vacancy ground. The court applied a broad-brush discretion recognising that most costs in multi-ground judicial review were “common costs” incurred regardless of which ground succeeded, and that the successful party would have won on alternative grounds in any event.
Interest Calculation
CPR 36.17(4)(c) | How To Calculate Enhanced Interest On Costs — Aggregate Method Applies (26/11/2025)
In Barry v Essex County Council [2025] EWCC 64, Deputy District Judge Rathod held that enhanced interest on costs awarded under CPR 36.17(4)(c) is calculated using the aggregate costs method, applying interest at the enhanced rate to the total sum of all post-offer costs from expiry to the date of the costs order. The court rejected the individual item method as unworkable in practice, particularly in summary assessment contexts where individual dates of incurrence are not examined, and found the aggregate method consistent with the post-Jackson reforms’ “carrot and stick” policy designed to encourage settlement.
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