Tag: #clarioncosts

Understanding the consequences of serving a defective bill of costs

ujjainimistryLeave a comment

In Hyder -v-Aidat-Sarran [2024] EWHC 3686 (SCCO), Deputy Costs Judge Roy KC dealt with two applications: from the Claimant for relief from sanctions for late service of the bill of costs; and from the Defendants who applied under CPR 44.11 to strike out the Claimant’s claim for costs due to serious and repeated failures to comply with rules, practice directions and Court orders and/or unreasonable or improper conduct during the detailed assessment proceedings.

Background Information

The applications were made against a background of procedural failures by the Claimant. A defective bill of costs, which had been prepared in the wrong format, had been served late. The Defendants served Points of Dispute in response to the defective bill, which highlighted numerous other failings, including a failure to certify and claims for costs to which the Claimant was not entitled. In the absence of Replies to Points of Dispute, the Defendants applied for an Unless Order.

As there was no serious dispute that the Claimant’s bill was defective, and on the strength of assurances given by the Claimant that an amended bill of costs had been prepared which would be served at the same time as the request for detailed assessment was filed, an Unless Order was made by consent. The Unless Order required the Claimant to file a request for detailed assessment hearing by 13 August 2024. In default of which the Claimant’s costs would be disallowed, and the Claimant would be required to pay the Defendants’ costs of the detailed assessment proceedings.

In the event, the Claimant filed the bill of costs together with a request for detailed assessment 1 day late by email, notwithstanding that the use of CE-File is compulsory in the Senior Court Costs Office. Although by this time the bill was in the correct format, none of the previously identified defects had been rectified and the filed bill introduced further defects in addition to those previously identified.

The Claimant was therefore required to apply for relief from sanctions. The Defendants opposed the application on grounds that the bill was so severely defective the Claimant could not properly be said to have belatedly complied with the Unless Order and they also applied for an order to strike out the claim for costs under CPR Rule 44.11, in any event.

The Judge dealt with each application in turn.

  1. The Claimant’s application for a relief from sanctions

The Judge referred to the Denton Principles, which is a three stage test used to guide the Court when deciding applications for a relief from sanctions under CPR 3.9.

Stage 1 was considered in relation to whether the service of a defective bill a day late was non-compliance with the order and whether that was a serious or significant breach.

The Judge stated that he was ‘ultimately against’ the Defendants submissions that the bill was so defective it should not be described as complying with the order because the bill was served within the meaning of the order in that the Unless Order did not specify a requirement to serve a fully compliant bill. Relief from sanctions was therefore granted.

  1. The Defendants’ application under CPR 44.11 to strike out the Claimant’s claim for costs

CPR 44.11(1) sets out the Court’s powers to address misconduct, which may apply where:

(a) a party or their legal representative fails to comply with a rule; or

(b) a party’s or legal representative’s conduct is unreasonable or improper.

If either limb of CPR Rule 44.11 are met, then the Court may apply one of the sanctions in CPR 44.11(2), which are:

  • disallow all or part of the costs which are being assessed; or
  • or order the party at fault or that party’s legal representative to pay costs which they have caused another party to incur.

The Judge found that both limbs of CPR 44.11(a) and (b) were made out. He found that in addition to the defects identified in the original bill, the Claimant had served an electronic bill which failed to comply with most of the requirements of electronic bills in Practice Direction 47.

The Judge agreed there were multiple significant failures within the bill, with some more serious than others. He also found it ”beyond belief” that the defects were not rectified in the electronic bill, despite being identified in the Points of Dispute. The Claimant also failed to serve evidence to explain or address the failings and failed to apologise for (or even acknowledge any of the failings) before the hearing. This was described as “serious and troubling lack of insight and contrition on behalf of the Claimant’s solicitors.”

It was also held that it was not appropriate for the Claimant’s solicitor to blame their costs draftsman for the errors on the basis that the costs draftsman is the solicitor’s agent, and the solicitor is vicariously liable for the draftsman’s failings (Gempride v Bamrah [2018] EWCA Civ 1367). The solicitor also had direct supervisory responsibilities which they did not fulfil in relation to reviewing and checking the bills of costs.

The Judge therefore found that “there have been multiple compound breaches. They have been serious. They have been persistent. They are unexplained, and they are inexcusable for the most part.”

It was then left to the Judge to decide upon the severity of the sanction to impose. Although a complete strike out of the claim for costs was possible, the Judge decided against that on grounds that the Court of Appeal had found that sanction to be draconian, even in cases of serious misconduct. Instead, the Judge recognised that a severe sanction was warranted and Ordered that the Claimant’s assessed costs would be subject to a 75% reduction.

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

Actor ordered to pay Guardian News indemnity costs and a £3 million payment on account of costs

angelanakoLeave a comment

Mrs Justice Steyn in Clarke v Guardian News & Media Ltd [2025] EWHC 2575 (KB) examined the issue of costs following the dismissal of actor, Noel Clarke’s, defamation and data protection claims against the Defendant newspaper. To determine the appropriate costs, the judgment addressed the Claimant’s conduct, the costs approved in the costs budget and the various “costs reserved” orders made during the proceedings. Whether the Claimant should make a payment on account of the costs pending detailed assessment and the amount of the payment is also considered in detail.

Background

The Defendant in this case had succeeded on the defences to defamation and the issue of serious harm in respect of 8 articles published about the Claimant actor. The Court determined that the Defendant had been wholly successful and therefore entitled to an order that the Claimant pays costs subject to detailed assessment.

Indemnity Basis Costs

With regards to the basis of assessment, the Judge referred to the legal principles in relation to exercising the court’s discretion to award costs on the indemnity basis summarised within the White Book at 44.3.8 to 44.3.10. The Judge cited the importance of the Court having regard to all the circumstances of the case and the conduct of the Claimant being a key element of this.

The Judge found that the Claimant’s pleaded case and the evidence at trial contained many statements that the Judge found to be untrue and dishonest. Mrs Justice Steyn referred to Esure Services Limited v Quarcoo [2009] EWCA Civ 595, which concluded that if a court finds a claim to have been brought or maintained dishonestly then “it will be normal for a court to seek to mark its disapproval” by making an order for indemnity costs.

Further, the Judge made reference to the Claimant making “wholly unfounded allegations of dishonesty against three professional journalists” and aired those publicly.

It was also highlighted that an order for indemnity costs does not require the Defendant to show that the Claimant’s unreasonable conduct increased its costs. Consequently, the Judge ordered the Claimant to pay the Defendant’s costs of the claim to be subject to detailed assessment on the indemnity basis, if not agreed.

Payment on Account of Costs

When addressing the issue regarding a payment on account of costs, the Judge referred to CPR 44.2(8) which states: “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.”

The Judge had regard for the way the claim had been pursued by the Claimant and the fact that costs would be assessed on an indemnity basis. The Judge also took into account the Defendant’s Precedent H of July 2024 where the total of the Defendant’s budgeted costs and incurred costs were £3,184,519.98, not including the estimated costs of disclosure, which were left to be agreed or subject to detailed assessment. This figure also did not include costs in respect of the Trial Preparation and Trial phases.

The Judge concluded that it was reasonable for a payment in the sum of £3 million to be sought by the Defendant.

Additional Costs Points

“Costs reserved” orders were made during the proceedings, regarding the Defendant’s application for an interim non-disclosure order and an Amendment and Joinder Application. The Judge concluded that the Defendant was entitled to these costs.

The Claimant asked the Judge to stay the costs order pending a potential application for permission to appeal. This was rejected as the Claimant already had more than the usual time to consider any grounds to seek leave to appeal and the Judge was not prepared to provide an extension of time to seek permission to appeal.

Conclusion

At paragraph 39 of the judgment, Mrs Justice Steyn articulates the reasoning behind her decision as she states: “Bearing in mind that the sum claimed by the Defendant on detailed assessment will be in excess of £6 million and having regard to the nature of the claim and the way in which it has been pursued by the Claimant and his lawyers; bearing in mind also the Defendant’s rates as they appear on the Precedent H forms and what appears, on the face of it at least, to be a reasonable use of more junior solicitors where appropriate; and also bearing in mind that I have ordered that costs will be assessed on an indemnity basis; it seems to me that the sum of £3 million sought by the Defendant is appropriate and no more than ought reasonably to be ordered in this case. It is a “reasonable sum” to require the Claimant to pay on account. It is substantially lower than the Defendant’s likely level of recovery on detailed assessment and so, in my judgment, it does allow for a suitably wide margin of error. Accordingly, I shall order the Claimant to make a payment on account in the sum of £3 million within 28 days.”

Angela Nako is a Paralegal 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.

An Insight into the Court’s Approach to Disproportionate Costs following a line-by-line assessment

angelanakoLeave a comment

Introduction

The judgment of Costs Judge Nagalingam in XX & Anor v Young & Anor [2025] EWHC 2073 (SCCO), provides a useful breakdown on how a bill might be reduced after a line-by-line assessment to yield a proportionate figure by taking into account the factors in CPR 44.3(5) and the Court of Appeal’s approach in West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220.

Background

Costs Judge Nagalingam, undertook a three-day line-by-line assessment of the costs in XX v Young as the Defendant had raised the issue of proportionality. He held that the costs were disproportionate and therefore the bill of costs total was reduced from £517,985.00 to £339,565.16, a reduction of almost 35%. Despite this reduction, the Judge held that the total sum remained disproportionate and subsequently further reduced the bill following the line-by-line assessment.

The Judgment

CPR 44.3(5)

In order to assess proportionality, the Judge relied on several factors outlined in CPR 44.3(5) which states that “Costs incurred are proportionate if they bear a reasonable relationship to:

  • the sums in issue in the proceedings;

In this case the Judge considered the realistic range of possible outcomes in the case to be £149,000 (the settlement sum) to £2.5million (the pleaded sum). The likely value of the claim was determined by considering the accident circumstances, the factor of contributory negligence and the complexity of the case. The Judge concluded that the sums in issue would realistically have been closer to £149,000 than the £2.5million fully pleaded claim.

(c) the complexity of the litigation;

The Judge made clear that whilst the litigation was not complex it was also not straightforward. Liability was in dispute, significant injuries were sustained and the medical complexity created legal complexity in quantifying the general damages and past and future losses. Liability also remained a factor under consideration.

(d) any additional work generated by the conduct of the paying party; and

In this case, the Defendant disputed liability until the joint settlement meeting and did not make a good and early Part 36 offer or protective settlement proposals prior to the joint settlement meeting. Therefore, it was determined that the Claimant could not be criticised for continuing with the litigation.

(f) any additional work undertaken or expense incurred due to the vulnerability of a party or any witness.

The Judge concluded that the receiving party’s solicitors were at times dealing with a vulnerable client due to factors such as injury recovery, isolation, the Claimant’s age and language barriers.

Surveillance / Exaggeration

In West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220 (17 July 2019) it was outlined that the factors in CPR 44.3(5) are not an exhaustive list. Surveillance evidence and the Defendant’s attempts to seek findings of misconduct and exaggeration were also considered.

The allegation based on surveillance evidence was that that the Claimant had recovered more than reported to the experts and consequently the claim settled at a sum far less than pleaded. However, the Judge declined to engage in a de facto retroactive trial of exaggeration as an issue and noted that if the Defendant had wished to pursue this factor of exaggeration, then they should not have settled or should have negotiated settlement terms which included a percentage based costs order.

Internal Communications

The Judge referred to West in XX v Young, opining that a line-by-line assessment must be completed first and that “one must be careful not to facilitate a result which would amount to double-counting of deductions”. Therefore, reductions were only applied where it was considered that costs were unreasonably incurred or unreasonable in amount. Although concerns were raised regarding the internal time claimed, this did not mean that internal communications were to be reduced irrespective of the circumstances.

Whilst the costs of internal communications had already been reduced from £27,724.50 plus VAT to £22,946.15 plus VAT following a line-by-line assessment, it was later concluded that the costs for internal communications were to be further reduced to £10,000 plus VAT using a broad-brush approach based on the facts and circumstances in the case. The bill total was therefore reduced to £324,029.77.

Conclusion

Overall, the Judge concluded that the assessed sum was “disproportionate in all the circumstances” through considering the factors within CPR 44.3(5) as well as the points of dispute, replies, skeleton arguments and submissions.

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

Refusal to strike out non-compliant point of dispute overturned on appeal

Robert PattersonLeave a comment

Where points of dispute are served in detailed assessment proceedings, they must comply with the requirements of Practice Direction 47, section 8.2. If it is found that points of dispute do not comply with the requirements  of the Practice Direction, then a paying party runs the risk of the points of dispute being struck out as per Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178 (19 February 2020).

Non-compliant points of dispute can of course be remedied. Documents served in detailed assessment proceedings can be varied in accordance with section 13.10 of the Practice Direction. Permission is not required to vary a document, but the Court may permit it on conditions or disallow it. The Court should only exercise this power in accordance with the overriding objective and if an amended or varied document is not served and filed in good time before a detailed assessment hearing, then it may be disallowed.

The recent case of Ward v Rai (Rev1) [2025] EWHC 1681 (KB) (03 July 2025) underlines the importance of compliance with the mandatory provisions of section 8.2 and also demonstrates the consequences of submitting an variation, very late in the proceedings. It is also a rare example of an appellate Court using its limited powers to overturn a discretionary case management decision.

The decision at first instance

The appeal centred around the document item in the receiving party’s bill of costs, which claimed 134.1 hours for work done on documents. The paying party’s point of dispute raised only general objections and indicated that the paying party would rely on an “annotated documents schedule of objections” (which was not served with the points of dispute). The point of dispute concluded with an offer of 68.3 hours in respect of the time claimed.

In his replies to points of dispute, the receiving party submitted that the point of dispute should be struck out because it did not comply with the mandatory provisions of section 8.2 and relied on the decision in Ainsworth.

The paying party’s “annotated documents schedule of objections” was not served until 2 working days before the commencement of the detailed assessment hearing, which had been listed for 2 days. This schedule was the first and only attempt by the paying party to identify which items in the document schedule were in dispute. Furthermore, the schedule offered a primary case of 58.5 hours and an alternative case of 58.8 hours; circa 10 fewer hours than the original point of dispute.

Unsurprisingly, the Judge at first instance was asked to disallow the point of dispute in respect of the document item, which he refused to do on grounds that the original point of dispute would have enabled a broad-brush assessment to take place. In addition, and whilst being critical of the paying party for serving the schedule late, the Judge was equally critical of the receiving party for failing to chase the paying party’s schedule. Ultimately the Judge permitted the paying party to rely on the schedule and adjourned the hearing into a third day.

At the conclusion of the third day, the receiving party’s bill was assessed in sum of £89,032.62 with £8,234.91 in interest, which was lower than the paying party’s Part 36 Offer. Consequently, the receiving party was ordered to pay the costs of the detailed assessment.

The appeal

The receiving party appealed the Judge’s decision not to strike out the point of dispute in respect of the document item and the Judge’s decision to permit the paying party to rely on its schedule. There were 5 grounds of appeal:

  1. The Judge failed to give proper effect to the correct interpretation of PD 47, paragraph 8.2(b) and in doing so, wrongly applied Ainsworth;
  2. That the Judge had misdirected himself in finding that the original Points of Dispute would have allowed there to have been a “fairly broad-brush assessment in any event”;
  3. The finding that the receiving party should have chased the paying party for the schedule and that both parties were at fault, was wrong;
  4. A finding that a Costs Judge had “very wide powers” to permit a variation; and
  5. That the Judge was wrong to permit the paying party to rely on the schedule as there had been no ambush.

The appeal court dismissed all 5 grounds. Ground 1 was dismissed because the Judge did not find that the original point of dispute was compliant and could not be said to have wrongly applied the law. Ground 2 failed because the Judge did not misdirect himself, while grounds 3 and 4 were dismissed because the Judge was entitled to find that the receiving party had a duty to chase the paying party and it was open to him to find that there was no ambush. Ground 5 failed because, the Judge had correctly identified that his powers under section 13.10 were wide.

However, the receiving party made an overarching point that the Judge’s approach was wrong because the Judge had failed to give sufficient weight to the mandatory aspects of paragraph 8.2(b) and had failed to ensure that the powers in 13.10(2) were exercised in accordance with the overriding objective.

In allowing the appeal, the Court found that had the Judge disallowed the original point of dispute, the detailed assessment would have concluded on the second day and there would not have been a third day. The Court also found that the paying party had been on notice of the receiving party’s intentions to have the original point of dispute struck out for 7 months and took no steps to serve the schedule until two working days before the hearing, which the Court found was an even more egregious an issue than in Ainsworth where there was 5 months’ notice of the issue without remedy.

The Court also rejected the paying party’s reason for the delay, that he hoped the matter would settle, as being circular: settlement would have been more likely if the schedule had been served sooner. The appeal court therefore held that the Judge’s refusal to strike out the original point of dispute and the decision to permit the paying party to rely on the schedule was wrong.

Conclusion

Although the judgment does not say as much, a decision to strike out the non-compliant point of dispute would have brought to an end the paying party’s entitlement to dispute a significant element of the bill (134.1 hours of document time) with the result that this may have been allowed in full.

Whilst those consequences may appear to be severe, they could easily have been avoided by serving compliant points of dispute in the first instance or by acting promptly in submitting a variation when the issues were first raised in the replies to points of dispute.

Robert Patterson is a Senior Associate in the Costs and Litigation Funding Department at Clarion Solicitors and can be contacted on 07810 750 360 or at robert.patterson@clarionsolicitors.com

Strike Out and Multiple Defendant Costs Entitlement: Clarifying the effects of both under Post-September 2023 Fixed Costs Rules

Daniel MurrayLeave a comment

District Judge Field, sitting in the County Court at Truro, has delivered perhaps the most interesting and seminal judgment of the new fixed costs era.

In MIL Collections Limited v My Shop 4 Ltd & Ors [2025] EWCC 38 (04 July 2025), the Court was asked to consider whether each of the 13 Defendants were entitled to fixed costs where the Claimant’s case was struck out for non-compliance with an Unless Order. The quantum of those costs was also considered, given events which meant determination of the award was not straightforward.

Case Facts

The Claimant was a company, whose business involved the purchase and recovery of debts. In late 2024, they had taken an assignment of debts owing by commercial entities to E.on Next Energy Ltd (‘Eon’). The debts varied in size.

Multiple claims were issued, which were transferred, piecemeal, to the County Court at Truro. In each case the Claimant had served a short template Particulars of Claim, and in many instances similar issues were being raised in Defence.. In the interests of the overriding objective, the decision was taken by the Court to manage the cases together, with the case allocated to the Fast Track and assigned to Band 1.

It later became apparent that multiple Defendants were co-ordinating their approach to the litigation and an identical Defence was being filed by each of them. All 13 Defendants in this case, had adopted this approach and thus an order was made on 28 April 2025 consolidating each of their cases and providing a tight timetable to trial.

Directions were subsequently given in several cases, which amongst other things, required the Claimant to file better Particulars of Claim, within 14 days of the order. In this case, this was to be by 13 May 2025, something the Claimant did adhere to. However, the Court took the preliminary view that the pleadings were still deficient and that unless order had not been complied with.

A hearing was listed to take place on 21 May 2025, to consider whether the claim had been or should be struck out. In the intervening period, the court sent out a notice dated 19 May 2025, listing a two day trial to take place across 14 and 15 July 2025. This is one of the first notes of interest in this case, on the basis that traditionally, as per the factors considered for allocation, matters will not usually be allocated to the Fast Track when the trial is expected to last no longer than one day. Here the Court exercised the discretion available to it pursuant to CPR PD 26 16.3(c), to still determine the case was not suitable for the Intermediate or Multi Track.

Until 19 May 2025, the Defendants had all been Litigants in Person, however, the 12th and 13th Defendants sought representation shortly before the final hearing. At the hearing on 21 May 2025, the Claimant accepted that there had been a breach of the unless order and that, consequently, the claim had been automatically struck out on 13 May 2025. The Claimant made an application for relief from sanction on the evening of 20 May 2025. Most of the hearing on 21 May 2025 was therefore concerned with the application for relief, which was dismissed.

The Parties’ Positions

At the conclusion of the hearing, the 12th and 13th Defendants sought their costs of the hearing pursuant to CPR 45.8 in accordance with Table 1 of PD45. These were determined at the hearing on 21 May.

With regards to the substantive litigation, the 12th and 13th Defendants sought fixed costs pursuant to CPR 45.44 and Table 12 of PD45 following the strike out of the claim; and the 1st to 11th Defendants each sought two thirds of the fixed costs in Table 12, pursuant to CPR 45(2)(a).

Due to a shortage of time, written submissions were ordered on the issues in relation to costs which were:

  1. The extent to which the fixed costs provisions apply at all in relation to a claim which is struck out;
  2. The applicable amount of fixed costs and the appropriate stage in Table 12 of Practice Direction 45
  3. Whether, where there is more than one defendant, each defendant is entitled to recover fixed costs in their own respect.
  4. Any entitlement to fixed costs in respect of unrepresented parties.

A.) The extent to which the fixed costs provisions apply at all in relation to a claim which is struck out

There was no dispute between the parties in relation to the allocation or assignment of the matter, which is traditionally a battleground on the new fixed costs regime. The Claimant here did dispute however, that there was an entitlement to costs by the Defendants, based on the specific wording in Table 12 of PD 45, which stipulates costs are payable where a claim “settles or discontinues“. There are also provisions for costs where the matter is disposed of at trial, which did not apply here. It was asserted that none of these conditions had been triggered and therefore no costs should be awarded. It was suggested by the Claimant that any liability should extend only as far as the interim application costs outlined in Table 1 of PD 45.

The Defendants’ position was that the triggers in terms of when an award for costs can be made, was non-exhaustive in Table 12 and that it would be an “absurdity” if a party whose case is struck out would escape liability for costs which would have flowed from, for instance, a discontinuance.

The Court dismissed the Claimant’s approach, confirming that the Table 12(B) did not contain an exhaustive list of the circumstances in which it applied. The Court went further, confirming that “those drafting the rules have clearly gone to extensive efforts to ensure that the fixed costs rules and Practice Direction address most circumstances and permutations, it cannot have been expected or intended that they would expressly deal with every possible circumstance which might arise in such a wide range of cases. The rules must be construed widely and purposefully.”

The Defendants were therefore entitled to costs of the action on accordance with Table 12.

B.) The applicable amount of fixed costs and the appropriate stage in Table 12 of Practice Direction 45

Given the listing of the trial in the intervening period between the deemed automatic strike out and the hearing on 21 May 2025, there was a dispute as to which was the applicable stage in Table 12 of PD 45. This was namely whether the matter fell into stage 2 which applies to case ‘from allocation up to listing for trial’; or stage 3, which applies to case ‘after listing but before the trial.’

The 12th and 13th Defendant’s drew  a distinction between the “listing” of a trial and the “fixing” of a trial. They submitted that stage 3 costs should apply, on the basis that case are traditionally listed in a floating window, with a fixed start date listed afterwards. Reference was made to guidance in the Chancery guide.

The Court found difficulties in accepting this approach, given that in the vast majority of Fast Track cases, the first case management order will provide for both allocation and provision for the trial to be listed either within a window or on the first available date after a particular date.

It was therefore determined that stage 2 costs applied.

C.) Whether, where there is more than one defendant, each defendant is entitled to recover fixed costs in their own respect.

The arguments here arose because of the ambiguity in CPR 45 regarding the position. Where there are multiple Claimants, the position is much clearer and the rules provide for the recovery of 25% of costs where additional Claimants are represented by the same firm of Solicitors.

After deliberation of several factors, including the position on cases allocated to the Multi Track, whereby Defendants are each entitled to their own costs, and the fact that had the  rule makers intended to deviate substantially from principles which would ordinarily apply in respect of costs, this would have been dealt with expressly in the rules, the Court determined that each Defendant was entitled to their fixed costs as set out in Table 12 of PD45. This was subject to the Court’s discretion to make an order under CPR 44.2(6)(a) that a party pay only a proportion of another party’s costs. The Court did not believe the fact that an award of two sets of fixed costs might produce a windfall for the Defendants was a relevant circumstance which should carry significant weight.

D.) Any entitlement to fixed costs in respect of unrepresented parties

Having determined that the individual Defendants were entitled to costs of the claim, the final issue to be determined by the Court was the position regarding the Defendants’ status as Litigants in Person and the level of entitlement.

CPR 45.4 deals with the position in relation to recoverable costs of Litigants in Person on the fixed costs regime, and confirms the application of CPR 46.5, which in turn confirms that Litigants in person are entitled to the same categories of costs and disbursements as represented parties, payments reasonably made by the litigant in person for legal services relating to the conduct of the proceedings; and the costs of obtaining expert assistance in assessing the costs claim. Where a party is a litigant in person throughout the entire claim, the costs allowed under this rule shall not exceed, except in the case of a disbursement. The amount to be claimed will be done so where the litigant can prove financial loss and is calculated at a rate of £19 p/h.

In the case of the 12th and 13th Defendants, the Court determined swiftly that, although they were acting as litigants in person as at the date of strike out, witness statement evidence of their representatives confirmed that prior to that, they had been acting for the Defendants by assisting in the drafting of the Defendant and working on an Amended Defence to the Amended Particulars of Claim.

The costs claimed by them were therefore deemed reasonable costs for legal services related to the conduct of the litigation and are therefore allowed under CPR 46.5(3)(b), subject to the two thirds cap referenced above.

The position in relation to the remaining Defendants was less clear. There was nothing to suggest that they were liable to representatives for fees and there was no evidence of financial losses. Invitations were made by those Defendants, for an award in line with that made in favour of the 12th and 13th Defendants.

However, the Court had difficulty in finding that the remaining Defendants had spent 91 hours engaging with the litigation, which was the number of hours that would have been required at the rate of £19 p/h to reach the level of costs awarded to the represented 12th and 13th Defendants. 7 hours was deemed reasonable and awarded to the 1st to 11th Defendants.

The Defendants sought an uplift of 50% on their costs in accordance with CPR 45.13 because of the Claimant’s conduct in the manner in which they pursued the claims.  The Court again refused this on the basis that the Claimant had already been penalised through the striking out of the claim and there was no evidence to support how the costs had been increased as a result of the Claimant’s conduct.

Summary

The decision is well thought out and provides useful guidance on numerous issues under the new extended fixed costs regime. It further exemplifies the Court’s discretion in terms of allocation and assignment of cases that may well have landed themselves on another track in view of the trial length and combined value. Further, the closing comments confirm a burden on receiving party’s to provide evidence in support of claims for additional sums pursuant to CPR 45.13 because of alleged poor conduct.

In conclusion, where a Claimant’s case is struck out against multiple defendants, each Defendant is entitled to recover their costs on an individual basis. It is essential that a specific trial date has been set, prior to the claim concluding to engage the fixed costs regime under stage 3 of Table 12 CPR PD 45, even if the trial itself does not take place. Furthermore, litigants in person are entitled to recover upto two-thirds of the costs awarded to legally represented parties, ensuring fair but proportionate remuneration for their time and effort in defending the claim. But this must be evidenced.

 Clarion’s Costs and Litigation Funding Department who can be contacted on any fixed costs issues, at our dedicated fixed costs email address at FRC@clarionsolicitors.com.

Fixed Costs and Remuneration of Professional Deputies

Laura SugarmanLeave a comment

On 18th June 2025, the Office of the Public Guardian issued new guidance in relation to fixed costs and remuneration of professional Deputies. The purpose of the guidance is to set out the general principles regarding fixed costs and the Public Guardian’s position on issues relating to fixed costs.

As you will be aware, rule 19.13 of the Court of Protection Rules confirms that Deputies can be remunerated for costs they incur when performing their duties as Deputy. The Court may order that the Deputy is allowed to take fixed costs. These are outlined in Practice Direction 19B (PD19B), which was recently updated, on 1st April 2024. Whereby the management period ended before 1st April 2024, the rates set out in the previous PD19B would apply, however if the period covered by the fixed costs ends on or after 1 April 2024, the rates outlined in the latest version of the Practice Direction apply. Generally speaking, a management period would run on an annual basis, however this guidance confirms that if the period is less than a year (for example if there is a change in Deputy or P passes away) the fixed costs claimed should be apportioned accordingly.

It is important to ensure that if you want to have your costs assessed but the Court Order only allows for fixed costs, the Deputy will not be allowed to take any costs higher than fixed costs as per the case of The London Borough of Enfield v Matrix Deputies Ltd & Anor. Our advice would be to apply to the Court of Protection to have the costs clause varied to allow for the costs to be assessed in these circumstances.

The guidance also reiterated the definition of net assets as per the case of Penntrust Ltd v West Berkshire Council & Anor. This case confirms that net assets is the total assets minus total liabilities. This includes any property owned by P, regardless of if they are currently residing in the same.

Whereby P has net assets of less than £20,300, the Deputy will not be permitted to have their costs assessed. Instead, they can take an annual management fee not exceeding 4.5% of P’s assets. The guidance also confirms that if there is a pending settlement which would take P’s assets significantly above £20,300, the Deputy should apply to the Court of Protection to seek authority to delay taking costs until the settlement funds have been received. This is a move away from previous guidance which has stated that the Deputy can only have costs assessed if P has assets above the threshold on the anniversary of the Court Order.

Further guidance has now been issued in relation to tax returns. Fixed costs can be taken for the completion of a basic tax return and complex tax return. It has been difficult to determine what would account for a complex tax return and therefore this guidance is very welcomed. The guidance states that:

‘PD 19B defines a basic tax return to cover cases where P’s income is derived primarily from bank or NS&I interest and taxable benefits, discretionary trust or estate income. A complex tax return may be defined as one which also includes income form more complex investments including stocks, shares and bonds, rental property, business income and foreign property. Public authority deputies may charge up to £89 for a basic tax return as set out at paragraph 18 of Practice Direction 19B to include bank or NS&I interest and taxable benefits and may charge an amount not exceeding £89. They may charge P for the completion of more complex tax returns as a specialist service P would be expected to play for if they retained capacity.’

Guidance has also been provided in the event of P’s death. The Public Guardian recommends that the Deputy agrees any costs with the personal representative of the administrator of P’s estate. Further, the guidance states that the Deputy is not permitted to take final costs after P’s death, if the estate has not yet been settled.

If you have any questions, please get in touch with Laura Sugarman for further information – laura.sugarman@clarionsolicitors.com.

Part 36 consequences following judgment, where judgment is given in a sum other than sterling

Katie SpencerLeave a comment

The Claim

It is not unusual for claims in the Commercial Courts to be denominated in currencies other than sterling. However, that gives rise to challenges where an effective Part 36 offer has been made by a Claimant, as Part 36 of the Civil Procedure Rules assumes that judgment will be given in sterling. Recent case law has given an indication of how the Court may exercise its discretion whilst respecting the importance and intention behind Part 36 offers.

In the recent case of Sanlam General Insurance Ghana Ltd v Sustainable Growth Fund II SCSP SICAV-SIF [2025] EWHC 559 (Comm) (14 February 2025), a claim was made for $1 million said to be due under a promissory note or corporate counter guarantee governed by English law.

On behalf of the Defendant, Ms Wick acknowledged the debt through a series of letters, either explicitly or implicitly confirming the obligation to repay the claimed sums. Despite repeated promises to pay, the Defendant failed to do so, prompting the Claimant to initiate legal proceedings.

Jurisdiction and Defence

The proceedings were served in Luxembourg in accordance with local law. The Defendant filed an Acknowledgment of Service, indicating an intention to defend the claim and contest jurisdiction. However, no formal application to challenge jurisdiction was made.

Claimant’s Application for Summary Judgment

The claimant sought summary judgment on multiple grounds:

  1. Entry of default judgment against the Defendant,
  2. Striking out the Defendant’s Defence,
  3. Summary judgment on the basis that the Defendant had no real prospect of successfully defending the claim.

In response, the Defendant submitted another document incorrectly labelled a ‘Defence’ despite having already filed one.

The Defendant raised various points, including an assertion that it was not a legal “person” and therefore could not be sued, and that Ms Wick lacked authority to sign legal documents alone.

The Court considered these arguments but was ultimately satisfied that the Defendant had no real prospect of success.

 Court’s Ruling on Costs and Interest

The Claimant had made a Part 36 offer to settle the claim for $1 million, inclusive of interest, plus costs. The Defendant did not accept the offer, which was subsequently beaten.

Although the Court declined to order that all the Claimant’s costs should be assessed on the indemnity basis, it did award the usual Part 36 consequences following judgment, including costs on the indemnity basis following expiry of the offer, enhanced interest on costs and the judgment sum, and an uplift on damages capped at £75,000.

However, the claim was denominated in US dollars and Part 36 of the Civil Procedure Rules assumes that a judgment will be given in sterling. To quantify interest on the judgment sum, the Court therefore used the US dollar prime rate as the starting point, rather than the Bank of England base rate, and awarded an uplift of 7.5%. In doing so, the Court followed the guidance given in OMV Petrom SA v Glencore International AG [2017] 1WLR 3465, where it was recognised that the Court has a discretion as to interest, but it was nevertheless important to incentivise Defendants to engage in reasonable settlement negotiations.

There were fewer difficulties regarding interest on costs, which were denominated in sterling, and a 10% uplift was awarded. However, the uplift on the judgment sum presented the same difficulties as interest on the judgment amount as it was denominated in dollars. The Court rejected a submission that the uplift could not be awarded where the judgment was denominated in a currency other than sterling, as that would defeat the purpose and intention of Part 36; the approach adopted therefore was to notionally convert the judgment sum into sterling at the applicable exchange rate on the date of judgment and to calculate the uplift on those sums.

Costs Assessment for the Summary Judgment Application

Costs were assessed on the indemnity basis following expiry of the Part 36 offer and on the standard basis up to expiry of that offer . The Court therefore had to take both bases of assessment into account in the summary assessment of the Claimant’s costs:

  • Hourly rates: The Claimant claimed £700/hr for a Grade A fee earner, £528/hr for a Grade C fee earner, and £260/hr for a Grade D fee earner. The Grade A hourly rate was assessed at the London 1 rate (£566). The Defendant’s delay and the cross-border aspect involving Luxembourg law supported this rate. Other fee earners were compensated at London 2 rates (£269/hr for a Grade C and £153/hr for a Grade D).
  • Work done on documents: Document preparation costs were reduced by £3,000 to reflect that the Witness Statement and Application Notice were prepared at a time when the assessment should technically have been on the standard, not indemnity, basis. All other document-related costs were allowed as claimed. Additionally, a £7,000 brief fee was found to be reasonable as it included work on documents.
  • Attendance at the hearing: Only the Grade A fee earner’s attendance at the hearing was deemed reasonable. The Grade C fee earner’s attendance time was disallowed as it was unreasonable, even where costs were being assessed on the indemnity basis.

Katie Spencer is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors and can be contacted on 07741 988925 or at katie.spencer@clarionsolicitors.com.

Updated practice guidance released by the OPG and SCCO – an important reference point for professional deputies!

Ella WilkinsonLeave a comment

On 28 May 2025, the good practice guidance previously issued by the Office of the Public Guardian (OPG) and the Senior Courts Costs Office (SCCO) was updated. This guidance exists to assist professional deputies in respect of their costs estimates, preparing and submitting bills for assessment and in understanding what work can be claimed and recovered. The vast majority of the contents remain similar to the original guidance released by the OPG and SCCO dating back to 2016 in respect of the expectations from professional deputies in regards to general good practice and the SCCO’s approach to assessment, however more recent developments have now been factored in such as the use of the E-bill and the CE File system, the case of ACC and Others, the latest stance regarding post death costs and the increased hardship threshold.

This blog summarises the key points raised, to ensure that professional deputies continue act in P’s best interests and comply with the requirements of the OPG, SCCO and Court of Protection. Importantly, the guidance issued is not intended to replace existing provisions such as the relevant Civil Procedure Rules, Practice Direction 19B (supplementing Part 19 of the Court of Protection Rules 2017), the Mental Capacity Act (2005) Code of Practice, and the OPG professional deputy standards.

Principles of Good Practice

Professional deputies are entitled to claim reasonable and proportionate costs. Key expectations include:

  • Aligning costs with the value of P’s estate and the work involved
  • Delegating tasks to appropriately graded staff
  • Acting transparently and always in P’s best interests
  • Evaluating whether their continued role remains necessary as P’s situation stabilizes
  • Where deemed appropriate, deputies should be open and transparent about their charges with P’s relatives

Deputies who fail to follow this guidance may need to justify their decisions, and the OPG may take action, including applications to remove a deputy where concerns arise.

Costs Estimates

  • The OPG105 must be submitted with the annual deputyship report, and in most cases it should take no more than 30 minutes to complete
  • If billed costs exceed the original costs estimate by 20% or more, deputies must explain the discrepancy
  • Significant changes in P’s circumstances should be reported to the OPG if they will impact costs

Assessment of General Management Costs

The SCCO’s role is to assess whether claimed costs are reasonable and proportionate. Their key considerations include:

  • Hourly Rates: these must generally align with the relevant SCCO Guideline Hourly Rates (except in the most exceptional circumstances)
  • Delegation: routine tasks, such as arranging payments or bank reconciliations, should be completed by administrative staff or Grade D fee earners at best. In addition, when reviewing time claimed for delegation, the SCCO will consider if the time clamed was reasonable, proportionate, progressive and that it serves to reduce costs
  • Home Visits & Contact: usually, only one home visit per year is allowed unless justified
  • Welfare Work: these cannot be claimed under property and affairs general management costs unless the Court of Protection gives permission
  • Overheads: routine supervision, internal communication, and basic administrative tasks are considered overheads and are not generally not recoverable
  • Payment of Bills: three minutes will be allowed for payments per instance, and no further time is usually allowed for amending records to reflect payments made or advising a party of a payment processed to them
  • Financial Beauty Parades: generally, only one senior fee earner will be allowed on assessment for attending these meetings
  • File Notes: if no or little documentary evidence is supplied in support of the bill and/or particular items of work claimed, it is likely that the SCCO will disallow the costs claimed
  • Litigation Costs: the SCCO will disallow costs which could be claimed within the context of ongoing litigation
  • Draftsman’s Fees: a Grade D rate will be allowed for the preparation of bills of costs, unless in exceptional circumstances

ACC & Others Judgment

Where work falls outside of the scope of general authority for the management of P’s property and financial affairs, a professional deputy may need to apply for further authority in respect of this work and the associated costs as per ACC & Others. The full judgment can be seen here: ACC & Ors ( property and affairs deputy ; recovering assets costs for legal proceedings) – Find Case Law – The National Archives, and we have also previously prepared a blog summarising this and the practical implications for deputies which can be found here: ACC & Others – A Useful Recap – Clarion Legal Costs

Submissions of Bills of Costs & Supporting Documentation

  • Bills of costs should ideally be submitted annually for assessment, as close to the end of the management year as possible
  • Bills covering less than a year can be submitted where there has been a transfer of deputyship and the deputy intends to realign the management period dates with the new order. If this transfer is internal within the same firm, such bills must span at least six months of work unless in exceptional circumstances
  • Bills must be submitted via CE file, and can either be the traditional bills of costs set out under Practice Direction 47 CPR Part 47, or in the newer E-Bill format
  • The short form bill format is required where costs claimed are under £3,000.00 (excluding VAT and any disbursements claimed)
  • Supporting documents submitted alongside the bill should include the OPG105, deputyship report (OPG102/103), any relevant Orders made by the Court of Protection providing authority for work falling outside of the general authority, as well as evidence in support of the hourly rates claimed (client care paperwork)

Post-Death Costs and Hardship

On P’s death, the deputyship will come to an end and the jurisdiction of the Court of Protection will cease. Costs incurred post-death are not assessable by the SCCO. The deputyship order however will continue to authorise detailed assessment of costs incurred during P’s lifetime, if these cannot be agreed with the executor of the estate. If the professional deputy is also appointed as executor, a potential conflict of interest arises and a bill of costs should be submitted to the SCCO for assessment.

Where P’s estate has a value of less than £20,300.00, deputies must follow specific directions set out under Practice Direction 19B with regards to hardship. This states that in such circumstances, ‘the professional deputy for property and affairs is not permitted to apply for assessed costs; instead they may take an annual management fee not exceeding 4.5% of P’s net assets on the anniversary of the court order appointing the professional as deputy’.

Summary

The guidance aims to encourage fairness, consistency, and clarity in the way the costs of professional deputies are managed and assessed. For deputies, it reinforces the importance of transparency, efficiency, and the diligent management of P’s affairs.

Professional deputies are urged to familiarise and refresh themselves with the full guidance and relevant existing provisions to ensure that they continue to act in line with best practice expectations and requirements.

If you would like to review the guidance in full, this can be found at: Professional Deputy Costs – GOV.UK

Defendant Barred from Arguing Costs – Except Wasted Costs

Katie SpencerLeave a comment

In the recent judicial review case of Ayinde, R (On the Application of) v The London Borough of Haringey, the Defendant was barred from making submissions on general costs after failing to comply with key procedural requirements.

Background

Following the Claimant’s issuance of judicial review proceedings, the Defendant failed to acknowledge service and did not file a statement of facts and grounds of defence. As a result, the Defendant applied for relief from sanctions in an attempt to participate in arguments on costs.

Costs consequences for the Defendant

The Court refused the application, underlining the importance of strict compliance with procedural rules. Consequently, the Defendant was barred from making submissions on general costs.

Wasted Costs

However, the Court did allow the Defendant to make submissions on wasted costs. This exception arose due to the Claimant’s legal representatives citing five fictional legal authorities in their application. In response, the Court issued a wasted costs order, describing the actions as professional misconduct.

Despite being restricted from general cost arguments, the Defendant was still permitted to address the issue of wasted costs—a distinct category aimed at compensating parties for costs incurred due to improper or negligent conduct by legal professionals.

Summary

This ruling serves as a strong reminder that non-compliance with court orders or procedures can lead to severe consequences, including the loss of the right to contest key aspects of a case, particularly on costs.

Practitioners must act promptly and diligently in complying with court directions. Failure to do so risks being excluded from critical elements of litigation, especially those with significant financial impact.

Katie Spencer is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors and can be contacted on 07741 988925 or at katie.spencer@clarionsolicitors.com.