Case Summary: Barry v Barry [2025]

Posted 11 April 2025

In the case of Barry v Barry [2025] EWHC 819 (KB) 8 Apr 2025, Mr Justice Dexter Dias has given useful and succinct guidance when dealing with “consequentials” following an acrimonious and contested trial in a contract dispute between two parents and their son. Costs were payable by the son on the indemnity basis.

The issue was whether the parents could vary their costs budgets upwards under CPR 3.15 (A), the application of CPR 36.17(4) in respect of their offers to settle, and the level of interim payments under CPR 44.2.

(1) Costs budgeting: over a year had elapsed since the extra work on disclosure had taken place and the application for an increase failed for lack of promptness. An alternative submission that the son had behaved “oppressively” under CPR PD 3D.13 thereby justifying the variation, was also unsuccessful: the son had not been trying to run up costs needlessly or deliberately to oppress or coerce his parents. An upwards variation for witness statements also failed for lack of promptness and the absence of oppressive behaviour. However, the budget for trial preparation costs was increased. The application was prompt and had been occasioned by significant developments, including a late application by the son to amend the defence.

(2) Part 36 offers. The offers were valid, and the parents had done better at trial. Accordingly, the CPR 36.17(4) entitlements as a starting point took effect subject to any disapplication or adjustment. The additional sum up to £75,000 was “all or nothing” unless it was unjust to disapply the rule. Its purpose was to penalise an unreasonable refusal to accept an adequate offer, and it was payable unless displaced by the weight of circumstances that established that the award was unjust. On the facts, it was not unjust. However, interest was at the discretion of the court and enhanced interest at 10% above base rate was disproportionate: the litigants were not institutions: 8 % above base was fair.

(3) Payments on account. The key point of embarkation was the principle that budgeted costs provided a reliable starting point because the case management process had held them to be reasonable and proportionate. For incurred costs not subject to court approval, 55% of the sum sought was appropriate: for the budgeted costs 90% was the right figure with 80% for those costs varied upwards under CPR 3.15(A).

Colin summarises “The judgment underscores the importance of making a prompt application to vary costs budgets where there has been a significant development in the litigation. It also indicates that the bar to establish “oppressive behaviour” is set very high. That said, it is unclear why any application to vary the budget was required, given that the costs were payable on the indemnity basis, and that, accordingly, the parents ‘costs at detailed assessment will not be constrained by the last approved costs budget- see Lejonvarn v Burgess (2020) Costs LR 45 at [92].

The case also confirms that the additional sum is penal and cannot be deconstructed, whereas enhanced interest is discretionary, and the rate can be adjusted. Payments on account remain at large, but where the court has carried out costs management and indemnity costs apply, 90 % is the figure to go for.”

To read the judgment click here.