Summary Assessment Reduced by 20% On Broad-Brush Proportionality Grounds Despite Rejecting Specific Challenges

A High Court judge summarily assessed costs at £70,158.64 after dismissing specific challenges to hourly rates, team composition and counsel’s fees, but applied a 20% global reduction on proportionality grounds when the successful party claimed £87,698.30.

GARDEN HOUSE SOFTWARE LIMITED V MARSH AND ORS [2026] EWHC 568 (CH)

In Garden House Software Ltd v Marsh & Ors [2026] EWHC 568 (Ch), His Honour Judge Cadwallader determined the costs consequential upon dismissing an application by the First, Second, Sixth and Seventh Defendants (“THD”) for reverse summary judgment or strike-out. The parties agreed costs should follow the event under CPR 44.2 and be summarily assessed on the standard basis, but disputed quantum. The Claimant sought £87,698.30, while THD contended the sum was disproportionate, proposing a reduction to £39,460.40 by challenging hourly rates, team composition, counsel’s fees, and time spent on the costs statement. The judge, applying the test of reasonableness and proportionality under CPR 44.3, rejected THD’s characterisation of the application as straightforward, finding it a heavy application in a high-value specialist claim where THD’s late shift in arguments increased necessary preparation. He held London 1 Guideline Hourly Rates were justified, the deployment of both a Partner and a Grade-A Legal Director was reasonable without duplication, and instructing both leading and junior counsel for a combined £50,000 was proportionate. While dismissing THD’s specific challenges, the court applied a broad-brush assessment of overall proportionality and imposed a global reduction of 20 per cent, ordering THD to pay costs summarily assessed at £70,158.64.

[17] "THD's proposed global reduction to £39,460.40 is not a fair reflection of what it reasonably cost the Claimant to oppose the application. Nor do the specific challenges warrant the sweeping reductions sought. However, stepping back and looking at the matter in the round, I consider that the overall figure of £87,698.30 must be reduced, for reasons of proportionality, by 20 per cent, to £70,158.64, which I consider to be reasonable and proportionate."

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Key Points

Guideline Hourly Rates are a starting point, not a cap, and higher rates may be justified by the complexity, importance, and specialist nature of the litigation. [10]
The instruction of two senior fee earners can be reasonable for a complex, high-stakes, and evolving application to ensure an efficient division of labour, provided no duplication is identified. [11, 12]
The instruction of both leading and junior counsel can be reasonable and proportionate where leading counsel has pre-existing case familiarity and the use of junior counsel is a means of controlling overall costs. [13, 14]
A party’s own lower expenditure is not determinative of the reasonableness of the successful party’s costs; it is merely a cross-check, and the question is what was reasonably and proportionately incurred by the successful party to meet the case advanced. [6, 8]
Even where specific challenges to individual cost items are not accepted, the court retains a discretion to apply a global reduction to the total costs claimed to ensure the final sum is proportionate. [17, 18]

[13] "THD say it was excessive to instruct both leading and junior counsel at a total cost of £50,000 (excluding VAT), and propose that I should cap their combined fees at £25,000. … I accept that both KC and junior were reasonably instructed: leading counsel had familiarity with the case and its history and had drafted statements of case; the use of junior counsel to support him should have allowed costs to be kept down. I consider the combined fees to be reasonable and proportionate, given the factors I have already mentioned."

Key Findings In The Case

The judge determined that the application filed by certain defendants for reverse summary judgment or strike-out was correctly dismissed because the Claimant’s approach was substantiated by the nature and evolution of the application, thus allowing the Claimant’s costs to be summarily assessed on the standard basis. [1-2]
It was found reasonable for the Claimant to incur costs exceeding those of the defendants, as the complexity and urgency of preparing the application justified more intensive work by experienced legal professionals, particularly given the threat to the Claimant’s entire case. [5-6]
The court concluded that the use of higher Grade-A hourly rates and the involvement of the Claimant’s Grade-A Legal Director were justified due to the significant complexity and high stakes of the commercial litigation, rather than defaulting to guideline hourly rates. [9-11]
The judge decided that the instruction of both leading and junior counsel at a combined fee of £50,000 was reasonable, given leading counsel’s prior involvement and junior counsel’s role in managing costs efficiently, disproving the defendants’ argument for a fee cap. [13-14]
Ultimately, the judge determined a 20% reduction in the total claimed costs, assessing £70,158.64 as reasonable and proportionate in light of the proceedings, despite not accepting specific challenges made by the defendants against individual aspects of the costs. [17-19]

[15] "THD contend that the time spent on the statement of costs (namely 1.1 hours (Grade C) plus 4 hours (Senior Costs Lawyer)) is excessive and should be reduced to 1 hour (Grade C) and 1 hour (Costs Lawyer). … I am not persuaded: the figure, totalling £2,549.70, is in context neither unreasonable nor disproportionate."

The High Court’s decision in Garden House Software Ltd v Marsh & Ors [2026] EWHC 568 (Ch) illustrates how a court may reject itemised costs challenges yet still impose a substantial global reduction on broad-brush proportionality grounds.

Background

HHJ Cadwallader had dismissed an application by the First, Second, Sixth and Seventh Defendants (collectively, “THD”) for reverse summary judgment and to strike out the Claimant’s claims. The parties agreed that costs should follow the event and be summarily assessed on the standard basis. The dispute concerned quantum alone. The Claimant sought £87,698.30 (solicitors’ fees £37,698.30; counsel’s fees £50,000). THD contended this was disproportionate and proposed £39,460.40, achieved through reductions to hourly rates, disallowing one senior fee earner’s time entirely, halving counsel’s fees, and cutting time spent preparing the statement of costs.

Costs Issues Before the Court

The court was required to conduct a summary assessment, determining what was reasonable and proportionate under CPR 44.3. The judge addressed each of THD’s specific challenges before applying a final, broad-brush assessment of overall proportionality. Specific issues arose concerning: (i) whether hourly rates should be reduced to London 2 Guideline Hourly Rates; (ii) whether the deployment of both a Partner and a Grade-A Legal Director was justified; (iii) whether instructing both leading and junior counsel at a combined fee of £50,000 was excessive; and (iv) whether 5.1 hours spent preparing the statement of costs (costing £2,549.70) was disproportionate.

The Parties’ Positions

The Claimant argued its costs were reasonable and proportionate. The application was a heavy one, listed for a full day with half a day’s judicial pre-reading, in a high-value specialist commercial and insolvency claim. THD had shifted the basis of their application following detailed correspondence from the Claimant’s lawyers before the hearing, advancing new points under time pressure, which necessitated preparation to address both the original and revised arguments. The application was brought only three months before a 12-day trial where substantial security for costs had been provided.

THD characterised the hearing as involving short points of law, not heavy or complex, justifying only modest costs. They advanced several specific challenges:

Hourly Rates: All rates should be reduced to London 2 GHR on the basis the matter was straightforward.
Team Composition: All time recorded by the Grade-A Legal Director (Mr Abdul) should be disallowed; the work of the Partner should have sufficed.
Counsel’s Fees: Instructing both a King’s Counsel and a junior was excessive; their combined fees should be capped at £25,000, half the amount claimed.
Statement of Costs: The 5.1 hours spent (1.1 hours by a Grade C fee earner and 4 hours by a Senior Costs Lawyer) was excessive and should be reduced to 2 hours total.

THD also pointed to their own costs of approximately £44,228 as a comparator, suggesting the Claimant’s higher spend demonstrated disproportionality.

The Court’s Decision

HHJ Cadwallader awarded the Claimant £70,158.64, representing a 20% reduction from the sum claimed. The judge addressed each of THD’s challenges in turn before applying a global reduction.

Character of the Application

The court rejected THD’s characterisation of the hearing as involving short, simple points of law. The application was listed for a day with half a day’s judicial pre-reading and was a heavy application, albeit the judge’s judgment was terse. THD had shifted the basis of their application following detailed correspondence from the Claimant’s lawyers before the hearing, advancing new points, so that under time pressure the Claimant had to deal with both the original and new points, which increased the preparation required. The application was brought only three months before a 12-day trial where very substantial security for costs had been provided.

Hourly Rates

The judge declined to reduce rates to London 2 GHR. This was a heavy application in a high-value, specialist commercial and insolvency claim, for which London 1 rates were not inappropriate. GHR are a starting point, not a cap. The judge noted that THD’s own Grade-A rate of £595 per hour (Birmingham) exceeded National 1 GHR and indeed the London 1 Grade-A GHR. Having regard to the application’s complexity and importance and the nature of the underlying issues, London 1-level rates were justified.

Team Composition

The court rejected THD’s submission that all time recorded by the Grade-A Legal Director should be disallowed. The Claimant’s explanation—that two senior fee earners were appropriate to manage a complex, high-stakes application with evolving arguments, and to ensure efficient division of labour—was persuasive. The deployment of a Partner and a Grade-A Legal Director was reasonable. The total time taken by both was also reasonable, and THD identified no duplication.

Counsel’s Fees

The instruction of both leading and junior counsel was held to be reasonable. Leading counsel had familiarity with the case and its history and had drafted statements of case; the use of junior counsel to support him should have allowed costs to be kept down. The combined fees of £50,000 were considered reasonable and proportionate, given the factors already identified.

Time Spent on the Statement of Costs

The time spent on the statement of costs (1.1 hours by a Grade C fee earner plus 4 hours by a Senior Costs Lawyer, totalling £2,549.70) was found to be in context neither unreasonable nor disproportionate.

Comparative Spend

The judge acknowledged that THD’s own costs for the application were approximately £44,228, roughly half of the Claimant’s figure. However, comparative spend can be a cross-check; it is not determinative. The question is what was reasonable and proportionate on the part of the Claimant. Given the points already made, it was unsurprising that the Claimant incurred a higher figure than THD.

Overall Proportionality

While THD’s proposed global reduction to £39,460.40 was not a fair reflection of what it reasonably cost the Claimant to oppose the application, and the specific challenges did not warrant the sweeping reductions sought, the judge nevertheless stepped back and looked at the matter in the round. He considered that the overall figure of £87,698.30 must be reduced, for reasons of proportionality, by 20%, to £70,158.64, which he considered to be reasonable and proportionate.

Analysis

The decision demonstrates the two-stage nature of summary assessment under CPR 44.3. A court may find that individual elements of a costs claim—hourly rates, team composition, counsel’s fees—withstand specific challenge when tested against the reasonableness criterion, yet still conclude that the aggregate figure requires reduction when assessed against the proportionality criterion.

The judgment confirms that Guideline Hourly Rates remain a starting point, not a cap, and that the nature, complexity and importance of the matter may justify rates at the higher end of the spectrum. The judge’s observation that THD’s own rates exceeded certain GHR benchmarks provided a useful comparative point that undermined their argument for strict application of lower guideline rates.

On team composition, the decision illustrates that deploying multiple senior fee earners is not inherently unreasonable where the matter is complex, high-stakes, and involves evolving arguments requiring efficient division of labour. The absence of identified duplication was significant.

The instruction of both leading and junior counsel was justified by leading counsel’s existing familiarity with the case and the judge’s finding that the use of junior counsel should have allowed costs to be kept down. The combined fee of £50,000 was assessed in the context of a full-day hearing with substantial pre-reading in a high-value specialist claim.

The most significant aspect of the decision is the application of a 20% global reduction after rejecting the specific challenges. The judge gave limited reasoning for this reduction beyond stating it was required “for reasons of proportionality” when looking at the matter “in the round”. This broad-brush approach reflects the court’s residual discretion to stand back from the detail and assess whether the total figure is proportionate to the matter in issue, even where individual components are reasonable.

The decision serves as a reminder that success in defending itemised challenges to a costs claim does not guarantee recovery of the full sum claimed. Proportionality operates as an independent control mechanism, and a receiving party should anticipate that a court conducting summary assessment may apply a global reduction even where specific criticisms are rejected.

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