![Willis v GWB Harthills LLP & Others [2025] EAT 79, His Honour Judge James Tayler, Rule 76 Employment Tribunal Rules 2013, Rule 84 Employment Tribunal Rules 2013, Rule 74 Employment Tribunal Rules 2024, Rule 82 Employment Tribunal Rules 2024, Stage 1 Threshold Conduct, Stage 2 Discretionary Decision, Stage 3 Quantum Decision, Ability to Pay, Costs Discretion, Unreasonable Conduct, Capital Assets in Costs Assessment, Family Home Valuation, Equity Release, Joint Ownership of Property, Detailed Assessment, Standard Basis, Profit Share Entitlement, PHI Payments, Costs Capping, Broad-Brush Assessment, Means Assessment, Proportionality of Costs, Discretionary Factors in Costs Awards, Effect on Third Parties, Honesty of Party, Costs Application Principles, Conduct of Proceedings, Stage 4 Bowel Cancer Context, Zoopla Valuation Evidence, Stage 3 Costs Quantum, Shields Automotive Ltd v Greig, Howman v The Queen Elizabeth Hospital Kings Lynn, Jilley v Birmingham and Solihull Mental Health NHS Trust, Arrowsmith v Nottingham Trent University [2012] ICR 159, Vaughan v London Borough of Lewisham (No 2) [2013] IRLR 713, Doyle v North West London Hospitals NHS Trust, County Court Detailed Assessment, Costs Decision in Employment Tribunals](https://tmclegal.co.uk/wp-content/uploads/2025/06/Shutterstock_351049592-80x80.webp)
Whilst laying down no new principles, this Court of Appeal decision emphasised Clarke LJ’s rejection in Excalibur Ventures LLC v Texas Keystone Inc. [2015] EWHC 566 (Comm) of the proposition that “the test for the sum to award was the “irreducible minimum””, and Leggatt LJ’s decision in Dana Gas v Dana Gas Sudek [2018] EWHC 332 (Comm) that “A logical approach is to start by estimating the amount of costs likely to be recovered on a detailed assessment and then to discount this figure by an appropriate margin to allow for error in the estimation.”
Following dismissal of an appeal on an issue of jurisdiction the Court of Appeal considered the appellant’s appeal against an order that he make a payment on account in the sum of £325,000.
Applying the principles in Excalibur Ventures LLC v Texas Keystone Inc. [2015] EWHC 566 (Comm)…
“What is a reasonable amount will depend on the circumstances, the chief of which is that there will, by definition, have been no detailed assessment and thus an element of uncertainty, the extent of which may differ widely from case to case as to what will be allowed on detailed assessment. Any sum will have to be an estimate. 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. This can be done by taking the lowest figure in a likely range or making a deduction from a single estimated figure or perhaps from the lowest figure if the range itself is not very broad.”
and Dana Gas v Dana Gas Sudek [2018] EWHC 332 (Comm)….
“A logical approach is to start by estimating the amount of costs likely to be recovered on a detailed assessment and then to discount this figure by an appropriate margin to allow for error in the estimation.”
the judge below arrived at a figure of £325,000….
“21. At the moment I am engaged in an estimating exercise. Taking account of the fact that an element of those costs are to be awarded on the indemnity basis and also taking into account the points made by [the respondents] I nonetheless cannot conceive that the figure on detailed assessment will exceed £450,000 and that might well be a generous figure.”
“22…In my judgment the discounting should be quite substantial given the scale of the sums though I have to guard against double discounting given that I have already discounted the £633,000 figure by a significant sum.”
The appellant had argued that….
“in taking the figure of £450,000 as an estimate of the costs the respondents were likely to recover, the Judge did indeed stray outside the bounds of reasonable disagreement. Mr Goodfellow, on the appellant’s behalf, argued that that was an “astonishing” sum, divorced from the reality of the sum the respondent might ultimately be awarded. He suggested that £200,000 would be a very good recovery.”
Lord Justice Phillips dismissed the appeal….
“In my judgment the level of the respondents’ total costs, whilst perhaps on the high side, is not particularly surprising in the context of proceedings in the Business & Property Courts which involved a worldwide freezing injunction and a two-day hearing on jurisdiction and discharge, with both leading and junior counsel instructed. That remains my view even though the sums at stake were relatively small in Business and Property Court terms: the appellant chose to apply for draconian relief, did so without making full and frank disclosure and raised a panoply of issues and arguments throughout the proceedings. The costs of defending such proceedings with vigour will necessarily have been very substantial, regardless of the sums claimed.
“In that context, the Judge cannot be criticised for taking a starting point of £450,000, particularly as the costs relating to the WFO were awarded on an indemnity basis. Further, his application of a 28% discount (in arriving at a figure of £325,000) appears entirely reasonable. Whilst I might have ordered payment of a slightly lower sum, the sum chosen by the Judge was well within the ambit of his discretion.”
CPR 44.2(8) | INTERIM PAYMENTS ON ACCOUNT
“What is a reasonable amount will depend on the circumstances, the chief of which is that there will, by definition, have been no detailed assessment and thus an element of uncertainty, the extent of which may differ widely from case to case as to what will be allowed on detailed assessment. Any sum will have to be an estimate. 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. This can be done by taking the lowest figure in a likely range or making a deduction from a single estimated figure or perhaps from the lowest figure if the range itself is not very broad.”
“A logical approach is to start by estimating the amount of costs likely to be recovered on a detailed assessment and then to discount this figure by an appropriate margin to allow for error in the estimation.”
“The appellant contended that, in taking the figure of £450,000 as an estimate of the costs the respondents were likely to recover, the Judge did indeed stray outside the bounds of reasonable disagreement. Mr Goodfellow, on the appellant’s behalf, argued that that was an “astonishing” sum, divorced from the reality of the sum the respondent might ultimately be awarded. He suggested that £200,000 would be a very good recovery.” [78]
“In my judgment the level of the respondents’ total costs, whilst perhaps on the high side, is not particularly surprising in the context of proceedings in the Business & Property Courts which involved a worldwide freezing injunction and a two-day hearing on jurisdiction and discharge, with both leading and junior counsel instructed. That remains my view even though the sums at stake were relatively small in Business and Property Court terms: the appellant chose to apply for draconian relief, did so without making full and frank disclosure and raised a panoply of issues and arguments throughout the proceedings. The costs of defending such proceedings with vigour will necessarily have been very substantial, regardless of the sums claimed.” [79]
71. CPR 44.2(8) provides that where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.
72. In Excalibur Ventures LLC v Texas Keystone Inc. [2015] EWHC 566 (Comm), Clarke LJ rejected the proposition that the test for the sum to award was the “irreducible minimum”, emphasising that the question is what is a “reasonable sum on account of costs”. He further stated:
“What is a reasonable amount will depend on the circumstances, the chief of which is that there will, by definition, have been no detailed assessment and thus an element of uncertainty, the extent of which may differ widely from case to case as to what will be allowed on detailed assessment. Any sum will have to be an estimate. 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. This can be done by taking the lowest figure in a likely range or making a deduction from a single estimated figure or perhaps from the lowest figure if the range itself is not very broad.”
73. The respondents’ total costs of the proceedings were £633,000 (on which no VAT was chargeable), described by the Judge as “an eye-watering sum”.
74. In determining the reasonable sum for a payment on account, the Judge adopted the middle of the three approaches suggested by Clarke LJ in Excalibur, referring to the endorsement of that approach by Leggatt LJ in Dana Gas v Dana Gas Sudek [2018] EWHC 332 (Comm) at [6]:
“A logical approach is to start by estimating the amount of costs likely to be recovered on a detailed assessment and then to discount this figure by an appropriate margin to allow for error in the estimation.”
75. Taking that approach, the Judge considered the amount of likely recovery. He noted that the appellant’s costs had been just under £263,000 including VAT, but also recognised that the matter had complications arising from the need to obtain evidence from overseas and the fact that the appellant raised new points that needed to be “chased down and answered”. The Judge also bore in mind repeated warnings that disputes as to jurisdiction must not be allowed to get out of hand or involve disproportionate sums being spent. The Judge concluded as follows:
“21. At the moment I am engaged in an estimating exercise. Taking account of the fact that an element of those costs are to be awarded on the indemnity basis and also taking into account the points made by [the respondents] I nonetheless cannot conceive that the figure on detailed assessment will exceed £450,000 and that might well be a generous figure.”
76. The Judge then considered what discount to apply, stating:
“22…In my judgment the discounting should be quite substantial given the scale of the sums though I have to guard against double discounting given that I have already discounted the £633,000 figure by a significant sum.”
On that basis, the Judge arrived at a figure of £325,000
77. The appellant accepted the very limited basis on which this court could interfere with the Judge’s exercise of his discretion in this regard, referring to the well-known principle identified by Brooke LJ in Tanfern v Cameron Macdonald [2000] 1 WLR 1311 at [32]:
“…the appellate court should only interfere when they consider that the judge of first instance has not merely preferred an imperfect solution which is different from an alternative solution which the Court of Appeal might or would have adopted, but has exceeded the generous ambit within which reasonable disagreement is possible.”
78. The appellant contended that, in taking the figure of £450,000 as an estimate of the costs the respondents were likely to recover, the Judge did indeed stray outside the bounds of reasonable disagreement. Mr Goodfellow, on the appellant’s behalf, argued that that was an “astonishing” sum, divorced from the reality of the sum the respondent might ultimately be awarded. He suggested that £200,000 would be a very good recovery.
79. In my judgment the level of the respondents’ total costs, whilst perhaps on the high side, is not particularly surprising in the context of proceedings in the Business & Property Courts which involved a worldwide freezing injunction and a two-day hearing on jurisdiction and discharge, with both leading and junior counsel instructed. That remains my view even though the sums at stake were relatively small in Business and Property Court terms: the appellant chose to apply for draconian relief, did so without making full and frank disclosure and raised a panoply of issues and arguments throughout the proceedings. The costs of defending such proceedings with vigour will necessarily have been very substantial, regardless of the sums claimed.
80. In that context, the Judge cannot be criticised for taking a starting point of £450,000, particularly as the costs relating to the WFO were awarded on an indemnity basis. Further, his application of a 28% discount (in arriving at a figure of £325,000) appears entirely reasonable. Whilst I might have ordered payment of a slightly lower sum, the sum chosen by the Judge was well within the ambit of his discretion.
81. It follows that I would also dismiss the Costs Appeal.
82. For the reasons set out above, I would dismiss both aspects of this appeal.
83. I agree.
84. I also agree.
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