Category: Litigation Costs

$35 Million in Costs for a Two-Week Hearing: Is Arbitration Still More Cost Effective Than Litigation?

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Introduction The High Court’s decision in Genel Energy Miran Bina Bawi Limited v The Kurdistan Regional Government of Iraq [2026] EWHC 1003 (Comm) reinforces two familiar themes in English arbitration law: the finality of arbitral awards and the limited scope for court intervention under the Arbitration Act 1996. The case arose from a challenge under […]

The practicalities of costs budgeting in the B&PC when a preliminary issue or split trial may be appropriate

Anna LockyerLeave a comment

The Chancery Guide at paragraphs 6.10 and 6.11 is practical: consider early (and in any event before the first CMC/CCMC) whether a decisive issue can be tried first, or whether the case should be staged (for example, liability then quantum). It is important to align the case-management proposal with (i) the DQ narrative, (ii) draft directions for the first CMC, and (iii) the costs budget, clearly setting out stage 1 work.

Paragraph 6.37D confirms that this approach also applies to PD51ZG1 and the relevant guidance is set out as follows:

6.10 Costs and time can sometimes be saved by identifying decisive issues, or potentially decisive issues, and ordering that they are tried first. A trial of a preliminary issue may also be appropriate where its determination, although not itself decisive of the whole case, may enable the parties to settle the remainder of the dispute or otherwise shorten the proceedings. An example would be a relatively short question of law which can be tried without significant delay (or much in the way of disclosure or witness evidence) but which would be determinative of one or more of the key issues in dispute.

6.11 Parties should actively consider at the earliest opportunity, and certainly in advance of the first CMC / CCMC, whether there are any issues which are suitable for determination as a preliminary issue, or which should be tried separately such as a split between liability and quantum. If possible, parties should indicate when filing DQs whether a preliminary issue or split trial is under consideration and provide a summary of the proposed approach in Section I of the DQ. Parties should give careful consideration to the approach to costs budgeting and disclosure where a preliminary issue or split trial is proposed or agreed.

Practical steps (for one party, or both parties by agreement)

  • Confirm whether PD51ZG1 applies (including any dispute about whether the claim is £1m or more / seeks only non-monetary relief) and diarise the budgeting steps.
  • Define the preliminary issue / split with precision: what is being tried first, why it is (potentially) decisive, and what it will remove from the remainder of the case.
  • Stress-test the procedural footprint for stage 1: what (if any) disclosure, witness evidence and expert evidence is genuinely required now, and what can properly be deferred.
  • Shape budgeting assumptions to match staging: make clear which work/phases are included in stage 1 and what is excluded (with a mechanism to revisit later if a second stage remains).
  • Engage early with the other side to narrow the issue(s) and, if possible, agree directions (or at least exchange short position statements before the CMC).
  • Use the DQ and draft directions to put a workable proposal before the court: issue(s), estimated hearing length, evidence/disclosure limits, listing window, and what happens after determination (ADR/stay/further directions).
  • Be ready on proportionality: a short comparison of time/cost for “single trial” vs “preliminary issue/split” is often what makes the application persuasive at the first CMC.

If you want a preliminary issue or split trial, the practical route is to define the issue tightly, demonstrate a genuinely reduced stage 1 footprint (disclosure/evidence), and present a directions and budgeting proposal the court can adopt at the first CMC.

The full guide can be found here: The Business and Property Courts of England & Wales Chancery Guide 2022

Anna Lockyer is a Senior Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com.

Changes to Rolls Building Statements of Costs

Anna LockyerLeave a comment

As of 14 April 2026, more specific requirements became applicable to the filing and service and the format of statements of costs in the Chancery Division, TCC, Commercial Court and London Circuit Court of the Rolls Building.

  • Parties should file and serve an Excel version of N260 for all summary assessments, in addition to a signed read-only PDF.
  • Excel-Template-N260-Clean-1-4-26.xlsx is the correct template Excel version to use.

The relevant Practice Note can be found here:

Rolls Building Practice Note – Summary Assessments (2026) – Courts and Tribunals Judiciary

*Practice Note of 13 March 2026 (which referenced N260A and N260B) can be disregarded.

Anna Lockyer is a Senior Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com.

Who is “Carrying on the Conduct of Litigation”? Guidance from the Court of Appeal in CILEX v Mazur and others [2026] EWCA Civ 369

Ellena HunterLeave a comment

Background

In CILEX v Mazur and others [2026] EWCA Civ 369, the Court of Appeal provided important clarification on the interpretation of the phrase “carry on the conduct of litigation” in the Legal Services Act 2007 (“LSA 2007”). The judgment addresses the question whether an unauthorised person, working under the supervision of an authorised individual, may lawfully perform litigation tasks without committing a criminal offence. It further provides some guidance on what acts are unlikely to constitute the conduct of litigation.

The appeal arose from a High Court decision which held that unauthorised persons who performed acts constituting the conduct of litigation, even under the supervision of an authorised individual, were themselves carrying on a reserved legal activity contrary to section 14 of the LSA 2007. That interpretation had significant implications for law firms, law centres, and access to justice.

Legislation

The LSA 2007 identifies the ‘conduct of litigation’ as a reserved legal activity. Schedule 2 provides that it includes:

  • The issuing of proceedings;
  • The commencement, prosecution and defence of proceedings; and
  • The performance of ancillary functions in relation to those proceedings.

Section 14 makes it a criminal offence to carry on a reserved legal activity unless the person is authorised to do so. The central issue on the appeal was whether an unauthorised employee who performs litigation tasks under supervision is themselves ‘carrying on’ the conduct of litigation, or whether that activity remains attributable to the authorised individual who retains responsibility for the case.

Can unauthorised persons ‘carry on the conduct of litigation’ if they carry out acts that constitute the conduct of litigation under the supervision of authorised individuals?

At first instance, the judge drew a distinction between assisting or supporting an authorised individual in litigation and conducting litigation under supervision.

The judge held that only the former was lawful. On that analysis, unauthorised persons could assist with litigation work but could not perform acts which fell within the statutory definition of the conduct of litigation, even where an authorised person supervised their work and retained ultimate responsibility.

That approach reflected the submissions of the Law Society and the SRA and would have required close, step‑by‑step oversight by authorised individuals, including prior approval of documents before they were used, even in urgent cases.

The Court of Appeal rejected that interpretation. It held that the ordinary meaning of the statutory language distinguishes between the tasks which make up the conduct of litigation and the direction, control and responsibility for those tasks.

The Court concluded that an unauthorised person does not carry on the conduct of litigation merely because they perform litigation tasks for and on behalf of an authorised individual. Provided the authorised person retains responsibility and puts in place appropriate arrangements for delegation and supervision, it is the authorised person who is carrying on the reserved legal activity.

The Court, therefore, held that the distinction adopted at first instance between ‘assisting’ and ‘conducting litigation under supervision’ was incorrect.

What acts constitute conducting litigation?

The Court of Appeal declined to set out an exhaustive list, however, it confirmed that a number of activities are unlikely to constitute the conduct of litigation, including:

  • Pre‑litigation work;
  • Giving legal advice in connection with proceedings;
  • Correspondence with opposing parties;
  • Gathering evidence;
  • Instructing and liaising with experts or counsel; and
  • Signing statements of truth or other documents which the CPR permits a legal representative (defined in CPR 2.3 including a solicitor’s employee) to sign.

Delegation and supervision

The Court emphasised that the LSA 2007 does not mandate a single model of supervision. There had to be proper direction, management supervision and control. However, the level of supervision required will depend on the circumstances. In some cases, particularly complex or high‑risk matters, closer oversight and prior approval may be appropriate. In other, more routine cases, supervision may properly consist of structured systems, regular meetings, and sampling of work.

The statute does not require prior authorisation of every task in every case. The question is whether the authorised individual has retained responsibility and exercised appropriate direction and control.

The Court of Appeal made clear that details of the appropriate supervision were a matter for the regulators. Following the judgment, the Law Society has issued a Practice Note which is key reading for firms, solicitors and their employees as it sets out its view of good practice and practical steps firms can take. Further guidance is awaited from the Solicitors Regulation Authority.

Conclusion

The Court of Appeal’s judgment has provided reassurance across the legal industry and has restored a practical and workable model of legal service delivery which aligns with the regulatory objectives of the LSA 2007, including improving access to justice. It confirms that the LSA 2007 is concerned not with who performs individual litigation tasks, but with who retains responsibility for them. Unauthorised staff may lawfully carry out litigation tasks under appropriate supervision, without committing a criminal offence, provided responsibility remains with an authorised individual. However, an element of uncertainty remains particularly as what amounts to appropriate supervision depends on the circumstances, and we can therefore expect to see further developments.

Ellena Hunter is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

The importance of being ‘certain’ in a retainer, whether a Contentious Business Agreement or not

Anna LockyerLeave a comment

A billionaire client (C) has been successful in an application in the High Court for an assessment of a series of invoices totalling more than $35 million, raised by C’s legal representative US firm Wilmer Cutler Pickering Hale and Dorr (D).

In Safra v Wilmer Cutler Pickering Hale and Dorr LLP [2026] EWHC 703 (SCCO), Costs Judge Leonard examined whether there was justification to order an assessment of the invoices in the context of the Solicitors Act 1974, specifically:

  • Whether the letter of engagement constituted a Contentious Business Agreement (CBA) within the meaning of Section 59 of the 1974 Act
  • If D was entitled to deliver interim statutory invoices and whether the invoices were compliant with the relevant requirements

Background

D had acted for C in a dispute over the estate of C’s father, a wealthy Brazilian banker, which involved several complex arbitrations.

C’s application of 17 December 2024 disputed the invoices rendered between 10 December 2022 and 17 September 2024 in relation to this matter.

C contended that “$35 million is an unusually large sum to incur over less than two years in even the heaviest of litigation”. Not only did C submit that time charges were high, they argued expenses and disbursements were also “of a surprising nature and amount”.

It was common ground that the work undertaken was ‘contentious business’ for the purpose of the 1974 Act and that the engagement letter did not need to be a labelled a CBA, to be a CBA.

Notably, the engagement letter contained a right to apply for assessment, which is not consistent with a retainer being a CBA.

The benefits of a CBA for D

It would have suited D if the engagement letter had been deemed a CBA because under section 60(1) of the 1974 Act, costs incurred under a CBA shall not be subject to assessment. D could have resisted the application on that basis.

That said, 61(4B) of the Act allows for assessment of the number of hours worked and whether they are excessive, when a CBA is relied on and when the client objects to the costs generally, providing the client has not alleged the CBA is unfair or unreasonable; the scope for C to challenge would be limited in these circumstances.

Engagement Letter not a CBA as lacked certainty

Despite D submitting that the terms of the engagement letter were negotiated with C – an experienced and commercially sophisticated client with very experienced lawyers, and that the  arbitrations had been extremely complex; their likely course unpredictable at the time of the engagement letter; and the full scope of the work unknown at the outset, it was determined by the Costs Judge that D’s engagement letter did not amount to a CBA.

There was acknowledgment that the long hours and expenses were commensurate with the nature and scale of work and with the value, weight and complexity of the litigation, but the judge expressed concern with the lack of financial information provided to C:

“unilateral, open-ended provisions for hourly rate increases, the amounts and timing of which were entirely at the discretion of the Defendant, are inconsistent with the requisite characteristic of certainty.”

D had not kept C informed of costs and failed to advise of rate increases of up to $2,095 per hour. The engagement letter provided for only a broad range of current hourly rates, capable of unilateral alteration by D. No fixed fee provision or a fee fixing mechanism existed.

It was made clear that certainty is paramount when determining whether a retainer is a CBA.

The Judge went on to say that if he had found the engagement letter to be a CBA, he would have set it aside in any event, because the unreasonably incorporated unilateral open-ended provisions, prevented C from challenging increases to hourly rates.

Chamberlain Bill, not Interim Statutory Invoices

Although it was determined that the engagement letter allowed D to deliver interim statutory invoices, and that monthly statements had been provided, the description of the monthly statements in the engagement letter and the invoices did not correspond.

The invoices were found to lack “the requisite element of finality” to be compliant interim statutory invoices.

Instead, they were held to collectively constitute a single Chamberlain bill, delivered to C on 17 September 2024, capable of assessment in its entirety under section 70(2) of the Solicitors Act 1974, as the bill had already been partially paid.

The Judge made clear that he would have exercised the court’s discretion and established that “special circumstances” as per section 70(3) were applicable, to justify an order for assessment in any event, as there was an evident failure by D to provide adequate costs information.

“The Defendant’s failure to notify the Claimant of its hourly rate increases seems symptomatic of a lack of awareness of the importance of keeping the client fully informed of the costs position. However much he would have known about what was being done for him, and however pleased he may have been at the level of service provided, the Claimant was not regularly being kept aware of what it was costing him.”

Costs Judge Leonard identified numerous failings throughout this matter relating to communications between lawyer and client regarding costs, which ultimately resulted in the order for assessment. Concluding the judgment with a determination that special circumstances would have been established due to inadequate costs information, even if the invoices had met the interim statutory invoice criteria, exemplifies the extent of potential consequences if clients are not kept clearly and fully informed on costs.

Anna Lockyer is a Senior Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com.

Costs Consequences of the Claimant’s Late Acceptance of the Defendant’s Part 36 offer

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A recent Court of Appeal decision provided important clarification on how legal costs were calculated when a Part 36 settlement offer was accepted late.

Background

The Claimant in Attersley v UK Insurance Ltd [2026] EWCA Civ 217 was injured in a road traffic accident in March 2018. Whilst the claim began under the Road Traffic Accident (RTA) Protocol, it exited the protocol and in February 2021, the Claimant issued Part 7 proceedings, valuing the claim up to £150,000 supported by several expert reports.

The Defendant admitted liability in March 2021 and made a Part 36 offer in the sum of £45,000. The Claimant did not accept this offer within the 21-day relevant period set by the rules. Consequently, the claim was allocated to the multi-track in January 2022, which typically allows lawyers to recover their costs based on what is considered reasonable rather than fixed amounts. The Part 36 offer was accepted in July 2022.

As the Claimant accepted the Part 36 offer outside the 21-day relevant period, and once the claim had been assigned to the multi-track, there was a dispute as to whether the costs could be recovered on a standard basis or were limited to fixed recoverable costs.

Outcome

The Court of Appeal considered the version of the civil procedure rules which applied at the time and held that the key date is when the 21-day period for accepting the Part 36 offer expires, rather than when the offer is eventually accepted, meaning that Claimants who accept an offer after the relevant period will generally be entitled to the amount of costs they would have received had they accepted the offer on the last day of the relevant period. As during that 21-day period the claim remained within the fixed costs regime, the Claimant was entitled to fixed costs which applied at that stage of the proceedings.

The court highlighted that the rules governing settlement offers are designed to encourage early settlement and clarity surrounding financial risk, therefore Defendants should be able to rely on the costs environment that existed when the offer’s relevant period expired. Allowing later events, such as the case being allocated to the multi-track, to change the cost consequences would create unnecessary uncertainty. The court outlined that:

“it is hard to see why a Claimant who [accepted the offer outside the relevant period]…should be in a better position than one who accepts the offer within time.”

Conclusion

The key point of this judgment is that if an offer is made and expires while the case is still within the fixed‑costs regime, the fixed‑costs rules apply to the consequences of accepting that offer, even if the case later evolves or moves outside the fixed‑costs regime.

Although this decision was made in the context of the pre-October 2023 fixed costs rules, it is expected that this is the same approach the Courts will apply under the new fixed‑costs rules introduced in October 2023. That is because those rules are also built around clear stages and predictable cost consequences.

Angela Nako is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com

From Millions to Nil: The Stark Warning in Winros v Global Energy

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In a judgment handed down on 19 December 2025 in the case of The Winros Partnership v Global Energy Horizons Corporation [2025] EWHC 3362 (Ch) (19 December 2025), Mr Justice Marcus Smith upheld a decision of the Senior Costs Judge Gordon-Saker in an assessment under the Solicitors Act 1974 to assess bills totalling circa £6 million at nil. The decision focusses on the circumstances in which a solicitor can terminate a CFA and preserve the right to claim fees from a client.

 

Background

The dispute arose from a long-running dispute between The Winros Partnership (formerly Rosenblatt Solicitors) and their former client, Global Energy Horizons Corporation. Winros had acted for Global Energy under a series of CFAs, which typically provided that the solicitor was only paid only in the event case succeeded.

However, the relationship deteriorated before any success was achieved under the last CFA. Winros terminated the retainer by accepting Global Energy’s repudiatory breach rather than relying on an express termination clause in the CFA.

After the retainer was terminated, Winros delivered a bill for circa £6 million, arguing it should be paid for the work they had done up to the point of termination. Winros also issued a claim in the Chancery Division for damages in relation to the termination of the CFA. Global Energy subsequently asked the court to assess the bill under Section 70 of the Solicitors Act 1974and the claim in the Chancery division was stayed pending the outcome of the assessment.

What the High Court Decided

On appeal from the Senior Costs Judge’s decision in the Senior Courts Costs Office, Mr Justice Marcus Smith upheld the assessment that Winros was not entitled to any payment and that the bill was to be assessed at nil.

Winros chose to terminate the CFA by accepting Global Energy’s repudiatory breach rather than invoking the contractual mechanism in clause 14 (which would have entitled it to fees for work done). Choosing a common law termination meant the contractual protections for payment on termination did not apply.

Furthermore, Winros argued they should have been paid on a quantum meruit basis, which is a restitutionary claim for the value of work done. However, the Court agreed with the lower court that as the CFA had already clearly set out the consequences of early termination, there was no “total failure of basis” that would justify unjust enrichment. Simply put, the contract already articulated what was to happen, leaving no gap for restitution to fill.

The Judge also commented (albeit obiter) that the detailed assessment procedure under the Solicitors Act 1974 was a regulatory process for reviewing bills, not a forum to decide standalone restitutionary claims. Those should be pursued in separate proceedings if genuinely arguable. Therefore, a detailed assessment proceeding was not the appropriate course of action.

The decision highlights the fact that courts will strictly uphold the terms of a carefully drafted CFA, particularly clear provisions on termination and payment that allocate risk with certainty—even if that results in a solicitor going unpaid. It highlights the critical importance of how a solicitor terminates a retainer, as terminating under contract versus at common law can dramatically affect entitlement to fees, with the wrong approach potentially forfeiting enforceable payment rights.

Overall, the judgment serves as a reminder that in CFAs, both procedural compliance and substantive terms are decisive in determining financial outcomes.

Ujjaini Mistry is a Paralegal in the Civil and Commercial Costs Team at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com.

When the Court ordered a Judge-led mediation, and the approach taken to costs arising out of unresolved applications

Joanne ChaseLeave a comment

The matter of Dover Farm Developments Ltd v Smith [2025] EWHC 2862 (KB) (11 November 2025) related to a defamation claim where the parties made cross applications; the Claimant’s application was in respect of permission to amend their Particulars of Claim, and the Defendants’ application (who were husband and wife Litigants in Person) was to strike out the claim.

The applications were both listed to be heard remotely on 14 July 2025 and both applications were unsuccessful. The Defendants’ application was dismissed, and the Claimant’s application was refused due to their failure to provide a copy of the proposed amendments to the Particulars of Claim. The Court did, however, grant permission to restore the application to amend the Particulars of Claim, ordering directions for compliance, and also ordering that the matter be stayed until 28 July 2025 to enable the parties to engage in mediation via the Court. The mediation was successful save for the issue of costs relating to the hearing of 14 July 2025.

Costs Decision

Under the general rule contained in CPR 44.2 (2), each party was entitled to their costs of the other party’s application (on the basis both were unsuccessful). However, Master Fontaine relied upon the provision of CPR 44.2(2)(b), which states that the Court may make a different order, and he considered various factors which resulted in a decision whereby the Claimant was awarded their costs of dealing with the Defendants’ strike out application, with a 15% deduction. The deduction was to take into account various factors including: the fact the Claimant did not provide a copy of their proposed amended Particulars of Claim, even though they were professionally represented; and that the hearing of 14 July 2025 was not a wasted hearing because it urged the parties to consider the proposal of a mediation conducted by the Court, given it was unlikely the Defendants would attend a private mediation due to the level of costs involved.

This proposal by the Court led, ultimately, to a successful resolution of the matter. A further 5% deduction was applied on the basis the Claimant’s statement of costs did not separate out the costs associated with each application.

This case displays how the Court can exercise their powers in respect of ADR and also under CPR 44.4(2)(b). It particularly highlighted how it could be beneficial to Litigants in Person who would, otherwise, have been unable to participate in mediation due to the costs involved. However, it remains to be seen how frequently the Court will exercise such powers.

Can a Claimant claim interest on costs not yet paid?

Helen ApplebyLeave a comment

Município De Mariana v BHP Group (UK) Ltd & Anor [2026] EWHC 73 (TCC)

In this case, the Claimants had succeeded at trial on a preliminary issue and were awarded an interim payment on account of costs of £43 million. However, the assessment of costs was deferred until the conclusion of the overall case.

The Court had to determine whether interest could be awarded on costs, when those costs were not payable to the Solicitor until the successful conclusion of the claim.

The Defendants’ Position

The Defendants objected to the Claimants’ application for interest on costs. Their argument was that since the Claimants had not paid any legal fees or disbursements, and were not out of pocket at this stage.

The Legal Framework

CPR 44.2(6)(g) gives the court discretion to award interest on costs from or until a specific date, including a period before judgment. The rationale for awarding interest, as explained in Jones v Secretary of State for Energy and Climate Change [2014] EWCA Civ 363, is to compensate a party who has been deprived of the use of their money or has had to borrow to fund litigation.

The Judgment and Key Principles

Mrs Justice O’Farrell determined that, although the Claimants had not yet paid out costs, they had incurred a liability. If and when damages are paid, the Claimants will have to pay their Solicitor out of those damages. The fact that the Solicitors and funders had shouldered the risk of non-payment did not mean the Claimants were not ultimately liable.

The Judge determined that the Claimants should be compensated for the funding expenses incurred, which required payment from their damages. On this basis, the court exercised its discretion and awarded pre-judgment interest on costs at 1% above the base rate, calculated from the date when half the fees were incurred (1 August 2023).

Summary

The judgment confirms that even where payment is contingent on success, interest can be awarded on the liability incurred. This decision reflects the evolving realities of litigation funding and ensures that compensation for funding expenses is not arbitrarily withheld due to the timing or structure of payment.

Helen Appleby is an Associate in Clarion’s Costs and Litigation Funding Team and can be contacted at helen.appleby@clarionsolicitors.com or on 07774 045105.

Report from the Committee of Public Accounts – Costs in Clinical Negligence

Bethany CollingsLeave a comment

The Committee of Public Accounts has published its latest report on the rising costs in clinical negligence – an important read for all those practising in this area. Notably, the report recommends that the Department for Health and Social Care clarify its position on a fixed recoverable costs scheme for lower-value clinical negligence cases at the earliest opportunity.

You can find the full report here.

Bethany Collings is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com