September delivered critical decisions on costs budgeting, indemnity costs thresholds, and procedural jurisdiction. The NOx Emissions litigation saw budgets slashed by 62%, whilst courts clarified when “annoying” behaviour remains insufficient for indemnity basis awards. Pre-action applications now definitively constitute “proceedings” for costs purposes. Practitioners must note the firm line drawn against Part 36 offers demanding total capitulation and the narrow scope for costs-only joinder applications.
Detailed Assessment & CPR 44.11
No Procedural Tension Between CPR 44.11 And s57 of the Criminal Justice and Courts Act 2015 Costs Judge Nagalingam refused permission to appeal, holding that CPR 44.11 and s57 Criminal Justice and Courts Act 2015 serve distinct purposes with no procedural tension. Detailed assessment cannot become a forum for quasi-fundamental dishonesty findings that should have been pursued at trial, and settlement without apportionment prevents retrospective allocation of damages to specific heads of loss.
Trust and Estate Costs
Executor’s Litigation Costs Indemnity Denied And Personal Costs Ordered In Hostile Trust Dispute
HHJ Paul Matthews dismissed an appeal against costs orders depriving an executor of estate indemnity for litigation costs. Executors defending hostile removal proceedings in their own interests rather than for the estate’s benefit lose entitlement to indemnity under Trustee Act 2000 s31, even where administration costs indemnity is preserved.
Section 51 Jurisdiction
Court Of Appeal Confirms That Pre-Action Applications Constitute ‘Proceedings’ for Costs Purposes
Lord Justice Cobb held that pre-action injunction applications constitute “proceedings” under s51 Senior Courts Act 1981, closing a loophole where parties might escape costs consequences through procedural technicalities. Courts possess costs jurisdiction for any application where they are seised and asked to make orders, regardless of whether a claim form was issued.
Costs Budgeting
High Court Slashes Claimants’ Costs Budgets by 62% In NOx Emissions Litigation
Cockerill J and Senior Costs Judge Rowley approved just £21m of £55.7m sought by claimants for Tranche 3 of the NOx Group Litigation. The court criticised continued “over-lawyering”, drastically reduced budgets for CMC attendance from 32 fee earners to 9 in-person attendees, and confined non-lead firms’ recoverable involvement to narrow circumstances, with routine “keeping abreast” work deemed non-recoverable inter partes.
CPR 3.15(8) | £870 Hourly Rate And £90,000 Brief Fee For Leading Counsel Deemed Disproportionate In £1.2m Claim
The High Court reduced trial preparation and trial budgets through broad-brush phase reductions where solicitors’ rates substantially exceeded London Band 2 guidelines and counsel brief fees totalled £90,000. Courts can address excessive rates without breaching CPR 3.15(8)’s prohibition on fixing hourly rates by applying downward adjustments to disproportionate phase totals following GS Woodland Court GP1 Ltd v GRCM Ltd.
Indemnity Costs
Being ‘Annoying and Difficult’ Not Sufficiently ‘Out Of The Norm’ For Indemnity Costs In Failed Liquidator Challenge
The Chancery Division refused indemnity costs against an unsuccessful creditor applicant, finding his conduct, though creating a weak application, did not meet the “out of the norm” threshold. Personal circumstances including head injury and deep investment in the liquidation distinguished the case from authorities like Beattie v Smailes where extravagant applications warranted higher basis awards.
Part 36 Offers
When Part 36 Offers Demand Total Capitulation | Matière v ABM
Alexander Nissen KC held that a Part 36 offer of nil for a multi-million pound counterclaim was not a genuine attempt to settle that aspect of proceedings, making it unjust to apply indemnity costs consequences under CPR 36.17(4) to counterclaim costs. The offer’s genuine nature regarding the claim secured full Part 36 benefits for those costs only, demonstrating offers must involve realistic concessions across all dispute aspects.
Costs Capping
Costs Capping Order | Court Sets Different Caps Despite Defendant’s Push For Parity In Facial Recognition Challenge
Farbey J set reciprocal but non-identical costs caps at £70,000 (claimants) and £100,000 (defendant) in a judicial review of Live Facial Recognition technology policy. Courts will look beyond specific fundraising to assess campaign organisations’ true financial resources, expecting strategic deployment of unrestricted funds whilst recognising that “reciprocal” caps under Criminal Justice and Courts Act 2015 ss88-89 need not be identical.
Fixed Costs Regime
CPR 45.8 Fixed Costs Apply To Interim Applications From Date Of Provisional Track Allocation
Sheldon J quashed a costs order of £10,653 where the case had been provisionally allocated to the Intermediate Track, limiting recoverable costs to £333 plus £303 court fee under CPR 45.8. Fixed costs regime applies from provisional allocation, not formal allocation, and conducting litigation as an unauthorised person constitutes a reserved activity barred under Legal Services Act 2007 absent specific exemption.
Costs-Only Proceedings
Court Refuses Costs-Only Joinder But Orders Consolidation in Will Dispute
HHJ Paul Matthews refused to join a will-writing company as a costs-only party under CPR 46.2 where it contested negligence allegations requiring full trial on breach, causation and quantum. Summary procedure under s51 Senior Courts Act 1981 is inappropriate where non-parties actively dispute liability; consolidation under CPR 3.1(2)(h) offers broader case management solutions where separate proceedings exist.
