Appellate Costs
Variation Of Costs Orders After Successful Appeal | When Previous Orders Should Stand (05/10/2025)
The Court of Appeal (Moylan LJ, Falk LJ, Cobb LJ) refused to vary a 2021 costs order in Potanina v Potanin (No.2) (Costs) [2025] EWCA Civ 1223 despite the husband’s subsequent Supreme Court success, holding that where the fundamental basis of earlier success remains undisturbed by appellate decision on different grounds, the original costs order should stand. Payment on account ordered at £350,000 (approximately 72% of costs claimed) within 60 days, but set-off against Supreme Court costs liability rejected.
Costs Cross-Appeal Fails Where Challenge Arose From Applicant’s Own Default (09/10/2025)
Lord Justice Coulson upheld costs orders against a relief from sanctions applicant in Google LLC v Robertson [2025] EWCA Civ 1262, finding the respondent’s jurisdictional challenge—though unsuccessful—arose directly from the applicant’s service default. The high threshold for overturning discretionary costs orders on appeal (SCT Finance v Bolton) meant reduction might have been appropriate but the judge’s decision wasn’t wrong.
Section 51 Jurisdiction
High Court Removes The “Murphy” Exceptionality Test For Inter Partes Costs In Criminal Judicial Reviews (06/10/2025)
The Divisional Court (Lady Justice Whipple and Lady Justice Yip) overturned Murphy v Media Protection Services in R (Bates) v Highbury Corner Magistrates’ Court [2025] EWHC 2532 (Admin), restoring full s.51(1) Senior Courts Act 1981 discretion for costs in criminal judicial reviews. No “exceptionality” requirement applies—CPR 44.2’s general rule governs, with unsuccessful parties ordinarily paying costs.
Supreme Court
When Should Costs Be Awarded In A Foreign Currency? Supreme Court Rejects ‘Loss Reflection’ Test (23/10/2025)
Lord Hodge and Lady Simler held in Process & Industrial Developments Limited v The Federal Republic of Nigeria [2025] UKSC 36 that costs orders should ordinarily be awarded in the currency of invoicing and payment, rejecting the “loss reflection” test from Cathay Pacific. The court distinguished costs awards from compensatory damages, emphasising costs are discretionary contributions under s.51 Senior Courts Act 1981 and CPR 44.2, not full indemnities for loss. No inquiry into funding arrangements required to avoid disproportionate satellite litigation. The default rule is currency of invoicing and payment; exception only where the currency choice is abusive or speculative.
Indemnity Costs & Dishonest Conduct
Can Unreasonable Refusal To Mediate Lead To Indemnity Costs On Appeal Even Where Permission Is Granted? (06/10/2025)
HHJ Paul Matthews held in Fernandez v Fernandez [2025] EWHC 2530 (Ch) that a 10-week delay coupled with rejecting all 26 mediation dates constituted “out of the norm” conduct justifying indemnity costs on appeal. Permission to appeal doesn’t immunise parties from costs sanctions, and the executor lost estate indemnity for pursuing the appeal in their own interest rather than the estate’s benefit.
Dishonest Evidence And Baseless Allegations Justify Indemnity Costs Order (16/10/2025)
Mrs Justice Steyn awarded indemnity costs and a £3 million payment on account in Clarke v Guardian News & Media Ltd [2025] EWHC 2575 (KB) where the claimant made dishonest pleaded statements, advanced baseless allegations against witnesses, and made unfounded allegations against professional journalists in a failed defamation claim. The court applied Esure Services v Quarcoo, confirming that inability to pay is irrelevant at the costs order stage (Bank St Petersburg principle).
Director Ordered To Pay Creditor’s Costs Personally Despite Rule 3.4 In Failed Administration Application (30/10/2025)
ICC Judge Barber held in Settle v Sandstone Legal Ltd [2025] EWHC 2771 (Ch) that rule 3.4 IR 2016 doesn’t shield directors from personal costs orders under s.51 Senior Courts Act 1981 where they are the “real party” pursuing litigation for personal benefit with knowingly false evidence. The director’s costs as applicant were capped at the issue fee only, as rule 3.12(2) IR 2016 must be read subject to s.51 and CPR 44.2. Pre-administration expenses require “sufficiently direct and appropriate connection” to the eventual administration.
Detailed Assessment
Default Costs Certificate Set Aside Due To Unexplained 300% Costs Increase Despite Defective Application (06/10/2025)
Deputy Costs Judge Erwin-Jones set aside a Default Costs Certificate under CPR 47.12 in Akhtar v Bashir [2025] EWHC 2218 (SCCO) where costs jumped 300% between the statement of costs (N260) and bill without explanation. The difference between legal aid rates and inter partes billing proved insufficient justification, though the applicant’s conduct was “only very slightly short of opportunistic.” The court made no costs order, finding neither party had furthered the overriding objective.
Multi-Party Litigation
Sanderson Orders Appropriate Where Claimant Aligns With Successful Defendant On Key Issue (06/10/2025)
Mr Justice Butcher awarded 100% Sanderson orders in the Russian Aircraft Lessor Policy Claims [2025] EWHC 2529 (Comm) where claimants supported the successful defendant’s case on coverage issues. However, claimants who failed on their primary case recovered only 65% of costs. Compound interest and US Prime rate challenges failed absent proper pleading, with payments on account ordered accordingly.
Apportioning Defendants’ Costs By Time | When Evolving Claims Engage Separate Interests (23/10/2025)
Jonathan Hilliard KC sitting as Deputy Judge held in Jon Flowith & Partners v Greaves & Ors [2025] EWHC 2738 (Ch) that separately represented defendants with distinct interests were entitled to costs from the date the claimant’s skeleton argument engaged those interests, but earlier costs were reserved pending final hearing. The court applied Bolton MDC, finding the “interest which requires separate representation” test satisfied where competing constructions of a Promotion Agreement clause directly implicated D1/D2’s liability position.
Security for Costs
Security For Costs Application Under CPR 25 | Financial Difficulties and Late Claims (13/10/2025)
David Elvin KC ordered security for costs of £1,500,000 (75% of estimated costs) in Baker Botts (UK) LLP v Carbon Holdings Ltd & Ors [2025] EWHC 2225 (Comm), finding compelling evidence of the Part 20 claimant’s financial difficulties despite claimed “transformation” through debt restructuring. The court rejected arguments that recent working capital facilities and debt settlement addendums represented genuine improvement, noting the arrangements likely reflected banks protecting their position. The 75% award (higher than the typical 60-70% discount) reflected the late and tactical nature of a professional negligence counterclaim brought four years after the alleged breach with no prior complaint.
Part 36 Offers
Part 36 Consequentials | Enhanced Interest, Indemnity Costs And 100% Payment On Account (06/10/2025)
HHJ Russen KC awarded full CPR 36.17(4) consequences in Learning Curve (NE) Group Limited v Lewis [2025] EWHC 2491 (Comm) after claimants recovered exactly the sum offered pre-trial, including enhanced interest at 8% above base rate, the £75,000 additional amount, and 100% payment on account (not the usual 90%) due to the indemnity basis element. Five challenges to Part 36 consequences all failed, with the court confirming that arguments about avoidable expense typically reinforce rather than undermine the regime.
Part 36 Validity, Protocol Breaches And Mediation Timing In Probate Disputes (14/10/2025)
HHJ Michael Berkley held in Ellis v Ellis Re: Care (Decd) [2025] EWHC 2609 (Ch) that Part 36 offers remain valid even where offerors don’t yet own the assets being offered, and that delaying mediation pending disclosure from opposing parties is reasonable. Full CPR 36.17(4) consequences applied with enhanced interest at 5% above base on costs (reduced from the typical higher rate), executors recovered litigation costs against the unsuccessful challenger, and payment on account ordered at 90% of budgeted costs.
Can A Vulnerable Party’s Change Of Mind Justify Part 36 Withdrawal Of An Accepted Part 36 Offer? (27/10/2025)
Senior Master Cook refused permission to withdraw an accepted Part 36 offer in Chinda v Cardiff & Vale University Health Board [2025] EWHC 2692 (KB), holding that client vulnerability and medical conditions affecting concentration do not constitute a “change of circumstances” under CPR 36.10(3) where no objective change occurred. The court distinguished between change of mind and change of circumstances (Cumper v Pothecary), emphasising Part 36’s certainty and predictability. Overriding objective vulnerability provisions relate to participation and evidence-giving, not settlement decisions.
Fundamental Dishonesty
Can Defendants Be Ordered To Pay Costs When Fundamental Dishonesty Allegations Fail? (14/10/2025)
Deputy High Court Judge David Pittaway KC ordered defendants to pay 15% of the claimant’s costs from the date fundamental dishonesty allegations were raised in Hakmi v East & North Hertfordshire NHS Trust [2025] EWHC 2597 (KB). Rejecting the “free tilt” argument under s.57 Criminal Justice and Courts Act 2015, the court held that failing to make an order would give defendants a free tilt at reputational damage despite the claimant losing the underlying clinical negligence claim on fundamental dishonesty grounds.
Discontinuance & Contempt
When Interlocutory Costs Orders Survive Discontinuance But Underlying Conduct Is Penalised (19/10/2025)
Mr Justice Freedman held in MEX Group Worldwide Limited v Ford & Ors [2025] EWHC 2689 (KB) that CPR 38.6 discontinuance principles generally prevail even where contempt has been proven, particularly where the underlying freezing order was wrongly obtained through material non-disclosure. Interim costs orders totalling £50,000 survived discontinuance (Dar El Arkan principle), but contempt costs were reduced to 50% on standard basis (not indemnity) reflecting the WFO should never have been granted. Inquiry as to damages ordered despite proven contempt.
Costs Orders & Judicial Discretion
Percentage-Based Costs Order Upheld For Litigation With Mixed Outcomes (20/10/2025)
Mr Justice Cawson upheld a 50/50 percentage-based costs order on appeal in Daniel Family Homes Limited v Gold [2025] EWHC 2697 (Ch), emphasising the “formidable obstacle” and “great deal of persuading” required to interfere with a trial judge’s costs discretion. The court held trial judges have a wide margin of appreciation in mixed-outcome litigation and are best positioned to assess overall success and conduct. Ground 2 of the appeal succeeded (£84,000 trespass damages awarded) but the costs order remained unchanged.
When Can “Neutral” Defendants Face Costs Orders In Judicial Review? (21/10/2025)
Deputy High Court Judge David Pievsky KC refused to vary a “costs in case” order to “no costs” in Medis Pharma Ltd v NHS Resolution [2025] EWHC 2616 (Admin), finding the defendant’s Summary Grounds had “pushed back” on factual and error points, preventing it from attaining truly neutral status under the Davies principle. The court refused relief from sanctions for a skeleton argument filed the day before hearing (13 days late), forcing the claimant to rely on its original Statement of Facts and Grounds instead.
Costs Capping
Costs Capping Inappropriate Where Unrecovered Costs Shift To Non-Party Tenants (17/10/2025)
Lord Justice Birss (with Lord Justice Nugee concurring) refused a CPR r52.19 costs capping order in Spender v FIT Nominee Ltd [2025] EWCA Civ 1319, finding the effect would shift unrecovered costs from 70 appellant tenants to 366 non-participating tenants through Landlord and Tenant Act 1985 service charge recovery provisions. The court identified the “real contest” as between participating and non-participating tenants, not landlord versus tenants, making costs capping unjust despite access to justice concerns.
CPR 46.27 Variation Refused Despite Financial Resources | Objective Unreasonableness Test Applied (28/10/2025)
Fordham J refused to vary Aarhus Convention costs caps in R (The Badger Trust and Wild Justice) v Natural England [2025] EWHC 2761 (Admin), holding that CPR 46.27’s “prohibitively expensive” test comprises two independent limbs: real-world affordability and objective unreasonableness. The court found variation objectively unreasonable despite claimants’ financial resources, emphasising default Rule 26 caps represent a “soft presumption” and that paradigm environmental protection cases require “space to be a repeat player.” The decision warned of the chilling effect financial scrutiny has on environmental NGOs’ access to justice.
