Monthly Legal Costs Update – May 2025
Here, in Kain Knight Costs Lawyers’ regular monthly legal costs update, we focus on those cases which we believe are likely to have a practical relevance for its members. We welcome feedback and if there is an area, topic or case you would like us to address, please let us know.
This Monthly Legal Costs Update May 2025 has been written by Nick McDonnell and Colin Campbell.
A big month in the costs courts! We start with the headline grabbing case of Rebekah Vardy v Coleen Rooney [2025] EWHC 851 (KB) 11 April 2025. On appeal from the Senior Costs Judge, Cavanagh J held that there had been no misconduct by Mrs Rooney’s solicitors (within CPR 44.11) that justified any sanctions being imposed against them. Her Precedent H costs budget had been completed on the basis of costs already spent, it represented an estimate of the costs likely to be recoverable on a standard basis, rather than the actual costs that had been incurred already, which were higher. Where that was the case, the judge held that it would be prudent for those preparing the budget to clarify that point, but the solicitor’s lack of transparency in not having made the position clear, did not amount to misconduct, so Mrs Vardy’s appeal failed.
Less headline catching but very important nonetheless has been the decision of the Court of Appeal decision in Gutmann v Apple [2025] EWCA Civ 459, 16 April.
This is a collective class action on behalf of iPhone users who allege that Apple abused its dominant position through a lack of transparency when it introduced software to deal with an iPhone battery problem. In issue was whether the group of funders of the actions could be paid out of compensation recovered before any damages can be distributed to members of the class. The court held that they could thereby providing certainty against the risk of there being insufficient funds to meet their fees. The consequence of the judgment is that it is likely to give greater confidence to the funding market to invest in such cases: remember that without such funding, Mr Bates would never have got his case against the Post Office off the ground.
Next fixed costs. In Attersley v UK Insurance Limited [2025] EWHC 884 (KB) 11 April, the issue was whether the claimant was stuck with fixed costs (FRC) after she had accepted a Part 36 offer outside the “relevant period”.
The offer had been made pre allocation (when fixed costs applied) but accepted much later following allocation to the multitrack (when hourly rate/time spent costs applied). The insurer’s argument that FRC should apply to the date of expiry of the relevant period failed. Stacey J concluded that both on a purposive and a literal reading of the rules, where an ex-Protocol case was allocated to the multi-track, it came out of Section IllA by the wording of CPR 45.29B, and Part 36(20) did not apply. In other words, once a multitrack case, always a multitrack case so far as the costs are concerned.
However, such a finding does not prevent an argument from a paying party that, under the blunt tool of ‘proportionality,’ the hourly rate/time spent costs could be reduced to a sum equivalent to those of fixed costs if it were to have been found that an offer should reasonably have been accepted earlier.
Next, a duo of Part 36 judgments.
In Henderson & Jones Ltd v Salica Investments Ltd [2025] EWHC 838 (Comm) 7 April, the issue was the validity of the claimant’s Part 36 offer which had failed to specify the “relevant period” for acceptance. Fortunately for the claimant, Calver J held that the history of correspondence showed, clearly, that the parties knew full well what the relevant period was: indeed, taken in context, a reasonable solicitor would have understood the offer to be referring to a period of 21 days, consistently with the other Part 36 offers which had been made. It followed that the offer was valid and compliant, but in future, practitioners would be well advised to take heed of the sage words of Birss LJ – use the form!
Meanwhile in Barry v Barry & [2025] EWHC 819 (KB) 8 April, Dexter Dias J dealt with not only Part 36, but also “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 parents had beaten their own offers and the judge held that it was not unjust for them to receive the CPR 36.17(4) benefits. The £75,000 was all or nothing, so they received that in full, plus interest on costs at 8% above base rate, which was discretionary.
As to costs budgets, it was too late, after trial, to vary the budget upwards for disclosure and witness statements (lack of promptness) under CPR 3.15A, but trial preparation had experienced a “significant development” due to a late amendment to the defence. The application for more for that item succeeded, but it does not clear from the judgment why there was any need to vary the judgment. Costs were payable on the indemnity basis, meaning that the parents would not be held to their budgets on detailed assessment – see see Lejonvarn v Burgess (2020) Costs LR 45 at [92].
Finally, the Solicitors Act has not let us down! In Spanakis v Schillings International LLP © [2025] EWHC 873 (KB) 14 April, Tipples J dealt with the proverbial problem of solicitors’ estimates. The issue here was whether the appellant’s costs should be limited in any way to a costs estimate provided in respect of part of the work anticipated, which had been £10,000 for “phase one”. Subsequently the solicitors billed £15,000. The judge held that it had been open to the judge below to find that the client did not rely on the estimate, and there was no basis for an appellate court to interfere with those findings of fact, so the appeal was dismissed.
