Category: Uncategorized

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.

No Costs Recovery in Failed Deputyship Case Where P Had Capacity

maidiedeightonLeave a comment

The Court of Protection has determined that it should not make a costs order against a Protected Party (P) who was the subject of a failed application by a professional Deputy to be appointed to handle his affairs.

This decision offers some important guidance on costs in Deputyship Applications, particularly when an application ultimately fails because the person concerned is found to have capacity.

Background

  • A professional Deputy applied to be appointed as property and affairs Deputy for a vulnerable adult. However, a section 49 report later confirmed that P did, in fact, have capacity.
  • P sustained frontal lobe damage more than 20 years ago following an assault, which has a mild impact on his executive functioning, compounded by excessive alcohol use. The Deputy made a COP1 application seeking appointment as a professional deputy for P after a referral by City of York Council, who believed P lacked capacity to manage his affairs. But a later medical report found he had the capacity to manage his property and affairs.
  • The Deputy appealed against the decision made by the District Judge who dismissed the application and made no order for costs, meaning the Deputy could not recover any of their expenses.

The Appeal

Harris J allowed the appeal in part, finding that the District Judge had misapplied the law on costs. Harris J found that the District Judge had made a mistake on costs by failing to apply the general rule that in property and affairs Deputyship applications costs shall be paid by P or charged to P’s estate (rule 19.2, Court of Protection Rules 2017) (SI 2017/1035)) (COP 2017). The District Judge had also failed to consider the grounds for departing from this with reference to the factors set out in rule 19.5 of the COP 2017.

Reassessing the Costs Position

  • Harris J reconsidered the matter from the start. While confirming that the general rule should be the initial benchmark, the Judge stressed that it is not absolute. There is a strong public interest in bringing appropriate applications before the Court of Protection, but that alone does not guarantee cost recovery for applicants.
  • Harris J concluded that as a matter of natural justice, “it may appear perverse that P should pay the costs of the Deputy – who is a complete stranger to him – for an application he did not invite, always opposed, had no choice but to respond to, and ultimately was successful in defending.

In reaching the decision, the judge focused on two key factors:

1.    P having no choice but to respond to litigation he did not invite but being successful in defending the application and, as a vulnerable adult, having no way to protect himself against any costs exposure.

2.    The professional Deputy choosing to bring and pursue the application and being in a position to assess litigation risks.

Outcome

  • Balancing these elements, the court concluded it was fair and just to depart from the general rule.
  • Harris J concluded that the application to be appointed as Deputy ultimately failed and it was the responsibility of the professional Deputy to mitigate any costs exposure.
  • Where an application has been made by a professional Deputy on referral from a local authority, the court suggested that the local authority could consider assuming the costs burden through a contractual arrangement with the Deputy, instead of imposing the burden on vulnerable adults.
  • This costs decision shows that courts are prepared to depart from the general rule on costs where there is good reason to do so.

You can find out more about our services here or you can contact the Costs and Litigation Funding team at costs.support@clarionsolicitors.com.

Costs in Trust Disputes: Key Insights from Seymour v Ragley Trust

Daniel MurrayLeave a comment

The High Court’s decision in William Francis Seymour v Ragley Trust Company Ltd & Ors [2025] EWHC 3400 (Ch) serves as a vital reminder of the difficulties faced by unsuccessful parties in displacing the general rule that the losing party pays the costs of the successful party. This case not only carries significant implications for family-estate and trust law but also reinforces the stringent requirements for overturning the usual costs order, i.e. the unsuccessful party pay the costs of the successful party,  particularly in the context of beneficiary disputes.

Background

In this case, the Claimant, who is the Earl of Yarmouth,  sought the removal of the existing trustees of the Ragley family trusts, aiming to replace them with independent professional trustees. After his claim was dismissed, the Claimant sought to displace the standard costs rule, arguing that he had experienced partial success and that the conduct of the Defendants warranted a different outcome under CPR 44.2(2)(a).

The Claimant contended that the costs of all of the parties should be paid out of the trust assets, alternatively that an order should be made for a payment of only a proportion of the Defendants’ costs, of no more than 50%.

The Categorisation of Trust Litigation and Costs

At the outset of his judgment, Master Brightwell provided a useful summary of the key principles governing costs in trust disputes, drawing on the Court of Appeal’s decision in Price v Saundry [2019] EWCA Civ 2261 and the longstanding authority of Re Buckton [1907] 2 Ch 406. These principles divide trust litigation into three main categories:

  1. Trustee Applications for Court Guidance
    • Trustees seek judicial assistance on matters such as trust interpretation or administration.
    • The costs of all parties are typically paid from the trust fund, as the estate is the primary beneficiary.
  2. Non-Trustee Applications
    • An outsider (e.g. a beneficiary or other interested party) seeks guidance that could have been requested by the trustees.
    • Costs are treated in the same way as trustee applications, with payments typically made from the trust fund.
  3. Beneficiary Disputes
    • A beneficiary makes a hostile claim against trustees or other beneficiaries.
    • This is treated like common law litigation, with costs generally following the event.

It was not seriously disputed that this case fell into the third category: a beneficiary dispute. The Claimant had brought a “root and branch” attack on the trustees’ conduct, which was clearly hostile in nature.

The Claimant’s Attempts to Displace the usual Costs Rule

Partial Success

The Claimant’s argument regarding partial success was based on the fact that he had succeeded in achieving a change in the composition of the directors of the trust companies. However, this argument was swiftly dismissed by the Court. Master Brightwell referenced earlier correspondence from the Claimant’s solicitors, which indicated that the appointment of a fourth director did not have any significant value or impact on the administration of the trust. As such, the partial success argument did not carry any weight. The application of an issue based order was dismissed, on the grounds that the Court must also be able to identify, at least in broad brush or in general terms, a part or proportion of the costs of the unsuccessful party which were incurred because of the unreasonable conduct which is complained about.

Conduct of the Parties

The Claimant also sought to challenge the Defendants’ conduct during the litigation. Specifically, he argued that the trustees had acted unreasonably by vigorously defending the allegations made against them, despite suggestions that they were open to stepping down or being removed from their positions. He also pointed to the fact that the trustees did not personally attend a settlement meeting, implying a lack of engagement.

However, the Court rejected these submissions. Master Brightwell noted that in beneficiary disputes, where allegations of misconduct are dismissed, the general costs rule is the starting point. Had the allegations been substantiated, the situation would have been different. There would have been strong arguments in favour of the trustees losing their indemnity from the trust assets and possibly being required to pay the Claimant’s costs. However, as the allegations were not proven, the trustees were entitled to defend themselves fully, and no misconduct was found.

Quantum and the Claimant’s Procedural Challenges

In addition to the issues of partial success and conduct, the Claimant raised concerns about the quantum of costs. Specifically, he questioned the fairness of the costs given that the claim had been brought under the Part 8 procedure, which did not involve the cross-examination of witnesses. The Judge noted that these concerns were a matter for detailed assessment rather than something that should automatically reduce the costs. Consequently, the Claimant was ordered to pay the Defendants’ costs on the standard basis, to be assessed if not agreed.

Indemnity from Trust Assets

The judgment also addressed the issue of indemnity for the trustees. Master Brightwell confirmed that, to the extent the costs were not recovered from the Claimant (whether due to an assessment down or non-recovery), the trustees were entitled to an indemnity from the trust assets. This was to be given effect by the trustees having their costs assessed on the indemnity basis, ensuring that they could recover their legal fees from the trust fund.

Key Takeaways for Trust Litigation and Costs

  1. Costs in Beneficiary Disputes: In beneficiary disputes, the general rule is that costs will follow the event. Even if a Claimant achieves some minor or peripheral benefit from the litigation, unless that translates into substantive relief, they are likely to bear the costs of the successful parties.
  2. No Leniency for Conduct: A party’s conduct during proceedings will rarely alter the costs order unless there is clear misconduct. Trustees defending claims against them are entitled to act robustly without the risk of bearing the costs, provided their actions are not unreasonable.
  3. Indemnity for Trustees: Trustees who successfully defend claims will usually be indemnified from the trust fund for their costs, provided they act in good faith. This indemnity ensures that trustees are not financially burdened by their legal fees when defending their position in the trust.
  4. Cost Assessments: Even if a Claimant challenges the quantum of costs, this will be dealt with at the assessment stage, not as a reduction in costs as a matter of principle.
  5. Issue Based Costs Orders: Parties seeking issue based costs orders, must be prepared to substantiate their arguments, so the Court can make an informed decision.

The case highlights the importance of understanding the nuanced rules surrounding costs in trust litigation, especially for beneficiaries considering challenging trustees. The default position remains clear: losing a claim means paying the costs, and partial success or the conduct of the parties is unlikely to alter that outcome unless specific conditions are met.

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

Since costs were to be assessed on the indemnity basis, the Court declined to determine an application to vary the Claimant’s approved costs budget

Katie SpencerLeave a comment

In the case of Xtellus Capital Partners Inc v Dl Invest Group Pm S.A. [2025] EWHC 2168 , Judge Bird found that the Defendant’s unreasonable conduct during the proceedings justified ordering that the Claimant’s costs be assessed on the indemnity basis for all phases of the case.

The Claimant had applied to vary its approved budget because its actual costs exceeded the approved amounts, but the Judge considered whether it was necessary to decide that application since the assessment would be on the indemnity basis.

CPR 3.18 governs departures from approved budgets when costs are assessed on the standard basis; it does not apply where the assessment is on the indemnity basis.

CPR 44.4(3)(h) requires the court, on detailed assessment, to have regard to the receiving party’s last approved or agreed budget. Budgets therefore remain potentially relevant even on an indemnity basis assessment, and the Court may depart from them without requiring a “good reason’.

However, the Judge decided that it was best not to deal with the budget variation application at this stage. He gave two reasons:

  1. On an indemnity assessment the Court can depart from approved budgets, so leaving the matter to a detailed assessment would not prejudice the Claimant; and
  2. Deciding the variation now would involve applying the “reasonable and proportionate costs” test, which is appropriate for the standard basis, not for the indemnity basis.

In conclusion, an application to vary an approved budget is not automatically necessary where costs are to be assessed on the indemnity basis. The Court may instead leave the issue to be resolved at the detailed assessment stage.

Katie Spencer is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors and can be contacted on 07741 988 925 or at katie.spencer@clarionsolicitors.com.