The High Court’s decision in QuidPay Finance Limited v SettleGo Solutions Limited (t/a OpenPayd) [2026] EWHC 2199 (Ch) addresses the treatment of excessive hourly rates when fixing a payment on account of costs, and illustrates the distinction between reducing an interim payment to reflect rate concerns and determining the rates issue itself.
Background
QuidPay Finance Limited brought proceedings against SettleGo Solutions Limited, trading as OpenPayd, following a dispute arising from the suspension of QuidPay’s account and the retention of funds held in a reserve account. The Claim Form was issued on 29 April 2026, seeking declaratory relief, a mandatory injunction to lift the suspension of QuidPay’s account, release of funds held in e-money accounts, and damages. On the same date, QuidPay issued an injunction application seeking an expedited trial and an interim order requiring OpenPayd to remove the suspension and pay out the entirety of the funds held in the accounts direct to QuidPay’s customers.
The draft Particulars of Claim relied on at the time of the injunction application alleged, among other matters, a Braganza obligation on the part of OpenPayd as to the exercise of the rights to suspend QuidPay’s account and to require the maintenance of a float or reserve account, and that the fiat currency paid over to OpenPayd belonged beneficially to QuidPay’s customers such that OpenPayd was not entitled to require QuidPay to utilise such funds for a float or reserve account, nor unilaterally to seize such funds. The draft also alleged that on a proper construction of the General Terms, neither clause 15 nor clause 20 survived termination of the relevant agreement.
The injunction application came before Green J on 7 May 2026. QuidPay’s skeleton argument for that hearing still advanced the beneficial ownership arguments. On 13 May 2026, OpenPayd served five witness statements in response to the injunction application, the majority of which evidence was directed to the arguments as to beneficial ownership, as well as the allegations of deceit, dishonesty and breaches of regulatory obligations. On 15 May 2026, QuidPay’s solicitors wrote abandoning the arguments as to beneficial ownership, enclosing Particulars of Claim deleting that part of the claim from the draft which had previously been supplied.
The injunction application then came before Richard Spearman KC, sitting as a Deputy High Court Judge, on 20 May 2026. OpenPayd had prepared its submissions on the basis that all remaining arguments were being pursued. QuidPay limited its arguments to one, namely that clauses 15 and 20 did not survive termination which was going to be effective from 27 May 2026. Rather than ruling on the application, Mr Spearman KC suggested that a trial of preliminary issues might be the more sensible course. The parties agreed, and directions were made accordingly. Three preliminary issues were identified, though two fell away, leaving a single issue for determination: whether clauses 15 and 20 of the relevant agreement survived termination. Mr Spearman KC reserved the costs of the injunction application.
The preliminary issue was determined by Lance Ashworth KC, sitting as a Deputy High Court Judge, in a judgment handed down on 30 July 2026 under neutral citation [2026] EWHC 1991 (Ch). QuidPay succeeded on that issue. The handing down hearing was adjourned for consequential matters, with directions for written submissions on costs and related issues. OpenPayd decided not to seek permission to appeal, and no stay arose for consideration. The consequential judgment, [2026] EWHC 2199 (Ch), addressed four outstanding matters: the costs of the injunction application, the costs of the preliminary issue applications, the costs of the preliminary issue trial, and interest on the sums ordered to be paid to QuidPay.
The Parties’ Positions
Injunction application costs: OpenPayd contended that it should be entitled to 50% of its costs up to the point at which QuidPay’s case was recast, on the basis that substantial costs had been wasted by QuidPay’s initial approach. OpenPayd accepted that from 19 May 2026, when QuidPay filed its skeleton argument for the hearing on 20 May 2026, it should pay QuidPay’s costs. QuidPay’s position was that it should recover its costs of the injunction application in full, on the basis that the preliminary issue trial had effectively determined the relevant part of the dispute in its favour. QuidPay proposed a 20% reduction to reflect the matters raised by OpenPayd, and sought a payment on account of £139,546.80, calculated as 60% of 80% of its statement of costs totalling £290,722.50. QuidPay’s rates were up to 50% above the 2026 Guideline Hourly Rates, but OpenPayd took no point on those rates at the interim stage.
Preliminary issue applications costs: The parties agreed that OpenPayd was the winner and entitled to its costs. OpenPayd sought a payment on account of 60% of £15,503.10, namely £9,301.86. QuidPay resisted on three grounds: first, that had OpenPayd followed the guidance in C v S [1999] 1 WLR 1551, the applications might not have been necessary; second, that OpenPayd’s conduct in withholding information about the legal impediment had increased QuidPay’s costs; and third, that OpenPayd’s hourly rates were grossly excessive, being approximately 235% of the 2026 Guideline Hourly Rates. In support of the rates argument, QuidPay referred the court to paragraph 29 of the Guide to the Summary Assessment of Costs and to the decision of Trower J in JSC Commercial Bank Privatbank v Kolomoisky [2025] BCC 393 at paragraphs [33] to [36], a case involving worldwide freezing orders and BVI company restoration obligations in which costs were awarded on the indemnity basis. In that case, Trower J had found that rates exceeding the guidelines by between 139% and 182% were excessive even on the indemnity basis, and had made a reduction of approximately £5,000, or around 7%.
Interest: QuidPay sought interest at 5.75% from 27 May 2026, being what it characterised as the effective rate of interest on new loans, relying on the principles set out by Hamblen LJ in Carrasco v Johnson [2018] EWCA Civ 87 at paragraphs [16] to [17]. OpenPayd argued that no interest should run until judgment on 30 July 2026 and that the rate should in any event be limited to 1% above base rate, relying on Jones v Secretary of State for Energy and Climate Change [2014] EWCA Civ 363 for the proposition that pre-judgment interest is compensatory rather than punitive.
The Court’s Decision
Injunction application costs: The court accepted that the starting point was that QuidPay should recover its costs of the injunction application, on the basis that, had the application been determined, the outcome would have been similar in effect to the result of the preliminary issue trial, with QuidPay as the winner. However, the court concluded that a reduction was warranted. QuidPay’s initial claim based on beneficial ownership arguments was characterised as unsustainable and as having been used as the basis for assertions that OpenPayd’s conduct was unlawful and tantamount to deceit, combined with threats to report OpenPayd to the FCA and to publicise its conduct. Those steps were described as entirely illegitimate. The relatively late abandonment of the contractual arguments other than the clause 15 survival point was also taken into account. The court rejected OpenPayd’s submission that it should receive a percentage of its own costs up to 19 May 2026, holding that the correct approach was to reduce QuidPay’s recoverable costs. A reduction of 35% was applied, entitling QuidPay to 65% of its costs of the injunction application on the standard basis. A payment on account of 60% of 65% of £290,722.50 was ordered, producing a figure of £113,381.78. The court noted that QuidPay’s rates were up to 50% above the 2026 Guideline Hourly Rates but that no point had been taken on those rates by OpenPayd, and the payment on account was made without any adjustment on that basis, the court expressly noting that the costs judge on detailed assessment would not be bound by the interim order.
Preliminary issue applications costs: The court rejected QuidPay’s first two objections to the payment on account. The court held that there was no basis for criticising OpenPayd’s failure to follow the guidance in C v S, and that had that guidance been followed it may well have increased costs. The court also rejected the criticism of OpenPayd’s conduct in relation to the legal impediment. However, the court accepted the third objection. The hourly rates claimed by OpenPayd were some 235% of the Guideline Hourly Rates. The court referred to paragraph 29 of the Guide to the Summary Assessment of Costs and to the decision in Privatbank v Kolomoisky, in which Trower J had held that rates exceeding the guidelines by between 139% and 182% were excessive even on the indemnity basis in a case involving worldwide freezing orders and obligations to restore companies to the register in the BVI, and had made a reduction of approximately 7%. The court held that the decision did not support OpenPayd’s position that no deduction should be made to the hourly rates claimed, but rather suggested that even in those more complicated circumstances with a greater international element, hourly rates of around two thirds of the ones claimed in the present case were excessive. The court concluded that the hourly rates claimed were excessive as between opposing parties, and fixed the payment on account at £7,000, doing the best it could and leaving the matter open for further consideration on detailed assessment.
Preliminary issue trial costs: The parties were agreed that OpenPayd should pay QuidPay’s costs of the preliminary issue trial, subject to detailed assessment on the standard basis if not agreed, and that there should be a payment on account of 60% of those costs, namely £110,731.70. The court made an order in those terms.
Interest: The court held that QuidPay was entitled to interest from 27 May 2026, the date on which the sums should have been paid on termination of the agreements. The monies were paid over on 7 August 2026. The court rejected OpenPayd’s submission that interest should run only from judgment on 30 July 2026. The court also rejected OpenPayd’s submission that the fact that there was no provision for the payment of interest to its customers under OpenPayd’s general terms was relevant to the exercise of discretion. The court accepted that it was OpenPayd’s case, which the court had accepted, that once the money was moved to the reserve account it was not e-money, and that Regulation 45 EMR 2011 was therefore not relevant. The court held that the starting point was that QuidPay was entitled to be compensated for being kept out of money which it should have had and did not receive until after the main judgment, and saw no reason to deviate from that starting point. The court noted that had the monies been returned on 27 May 2026 as they should have been, it was likely that QuidPay would have paid them out to its own customers rather than generating bank interest, but that did not occur because OpenPayd did not return the monies. However, as to the rate, the court held that there was no evidence as to what level someone with QuidPay’s general attributes would have borrowed, and that the reliance on the Bank of England’s effective interest rates was not of any great assistance as it was very broad. The court held that QuidPay was a claimant which did not fall clearly into a category of those who would have borrowed or would have put money on deposit, and that the appropriate rate of interest to be awarded in all of the circumstances to compensate QuidPay for being kept out of the money was 1% above base rate, that is a total rate of 4.75%. Applying this interest rate for the relevant periods, the interest payable was £58,301.37 and €20,436.44, subject to the parties checking the calculations. The court followed the later decision of the Court of Appeal in Carrasco v Johnson rather than the earlier decision in Jones v Secretary of State for Energy and Climate Change, on the basis that Carrasco had considered more cases, though the court acknowledged that Sharp LJ in Jones had referred to many of the same cases that Hamblen LJ did in Carrasco and that in so far as there was any difference it was marginal.
Comment
The decision illustrates the court’s approach to fixing a payment on account where hourly rates are challenged as excessive. The court reduced the payment on account from the arithmetically correct figure of £9,301.86 (60% of £15,503.10) to £7,000, a reduction of approximately 25%, while expressly leaving the rates question open for detailed assessment. This approach differs from the treatment of QuidPay’s own rates in relation to the injunction application costs. QuidPay’s rates were up to 50% above guideline, but because OpenPayd took no point on them at the interim stage, the payment on account of £113,381.78 was calculated without any adjustment for rates. The court expressly noted that the costs judge on detailed assessment would not be bound by the interim order and that it would be open to OpenPayd to challenge QuidPay’s rates in the detailed assessment process. The decision demonstrates that a party who challenges rates at the interim stage may secure a reduction in the payment on account even where the rates issue is left open for detailed assessment, while a party who does not take the point at the interim stage will find that the payment on account reflects the rates claimed, though the rates remain open to challenge on detailed assessment.
