Monthly Legal Costs Update – August 2025
Here, in Kain Knight Costs Lawyers’ regular monthly legal costs update August 2025, 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 August 2025 update has been written by Nick McDonnell and Colin Campbell.
An abundance of judgments at High Court level and above were delivered over the past month, which means that space is in short supply and that these summaries, are, out of necessity, somewhat brief.
We start in the Court of Appeal. In Sony Interactive Entertainment Europe Ltd v Alex Neill Class Representative Ltd [2025] EWCA Civ 841, in seven linked appeals from the Competition Appeal Tribunal, the issue was whether Litigation Funding Agreements (LFAs) entered into by class representatives in collective proceedings, were damages-based agreements (DBAs) within the meaning of s.58AA(3)(a) Courts and Legal Services Act 1990, and as such, were unenforceable. The cases raised issues stemming from R (PACCAR Inc) v Competition Appeal Tribunal [2023] Costs LR 1193 which had decided that LFAs were DBAs and were unenforceable unless they complied with the DBA Regulations 2013. However, Flaux C held that where LFAs provide that the funder’s fee is calculated as a multiple of the funder’s outlay and, expressly or by implication, that the amount of the funder’s recovery is capped at the level of the proceeds recovered, they are not unenforceable DBAs within the meaning of s.58. That will bring relief to class representatives : it should mean that ongoing funded claims in the CAT can proceed safely because had the appeal gone the other way, the LFAs would have needed to comply with the DBA Regulations. Currently few (if any) do.
Next two appeals. In Elphicke v Times Media Limited [2025] EWHC 1554 (KB), Hill J refused permission to appeal against five decisions (including liability for costs and an interim payment) taken by Master McCloud below. She held that the Master had not exceeded the generous ambit within which reasonable disagreement was possible and the court would not interfere with the decisions she had made.
In Turner v Coupland Cavendish Ltd [2025] EWHC 1605 (KB) during detailed assessment proceedings under 70 of the Solicitors Act 1974 and CPR 67, the issue was whether an order should be made for the defendant solicitors to comply with a Part 18 request. The claimant contended that there might be undisclosed financial benefits which would constitute client money and should have been credited to the cash account. That included (1) a Gibraltar based entity to which a payment had been made out of his compensation, (2) possible commission paid for an After-the-Event insurance policy. Sweeting J reversed the costs judge, holding that the requests should be answered. However, an application has been made for permission for a second appeal.
Still with detailed assessment proceedings, in Ward v Rai [2025] EWHC 1681 (KB) Hill J heard an appeal about points of dispute (PODs). Below, the court had refused an application to strike out a new schedule of PODs served two days before the hearing when the defendant had been on notice for 7 months that they had been non-compliant. As a result, the detailed assessment had gone into a third day. Hill J overturned the decision, holding that the overriding objective required that cases be dealt with “fairly”, and that any unfairness to the Respondent that would be caused by the PODs being struck out and the schedule disallowed, had been entirely of his own making. That meant that 134.1 hours spent on documents could no longer be challenged relying on the new schedule. Hill J has thereby given a stark warning to lawyers about the perils of late service. It can never be wrong to serve early.
The New Lottery Company v Gambling Commission [2025] EWHC 1522 (TCC) concerned security for costs under CPR 25, Joanna Smith J holding that an interested party to the litigation cannot obtain security. The rule permits a party to the action to do so, but there is no route for a non-party via CPR 3.1(2))p) on the basis that the court could “take any other step… for the purpose of managing the case and furthering the overriding objective”.
In earlier posts, we have written about the growth of judgments dealing with “consequentials”. It continues apace: get ready for seven this month!
In Illiquidx Ltd v Altana Wealth Ltd [2025] EWHC 1566 (Ch), following the trial on liability, Rajah J held that the claimant was the overall winner, but costs adjustments were required to reflect the claimant’s loss in a copyright and joint liability aspect of the claim. The costs were not reserved to await the “event” in the sense of a final resolution of the proceedings, and as a reflection of the court’s disapproval of the way the claim had been prosecuted, Rajah J limited the recoverable costs to 50%, subject to detailed assessment.
In Century Property (Leeds) Ltd v Eville & Jones (Group) [2025] EWHC 1348 (KB), Simon Kinnear KC refused to stay a costs order made against a litigant-in-person pending appeal merely because that party was a litigant-in-person, holding that there was no risk of injustice to one or both parties if he granted or refused the stay. He then summarily assessed the costs, that being a cost-effective way to decide costs without the time and expense of detailed assessment.
In DSM IP Assets B.V. v Algal Omega 3 Ltd [2025] EWHC 1514 (Pat) Mellor J had given judgment on liability in an action alleging patent infringement and a counterclaim alleging invalidity. Following a day hearing, he dealt with who should pay the costs of the action and ordered DSM to pay £580,000 on account.
In Bellhouse v Zurich Insurance Plc [2025] EWHC 1551 (Comm) HHJ Hodge dealt with issues consequential to his judgment on the claimants’ application to strike out, and for summary judgment on substantial parts of Zurich’s defence. Rejecting Zurich’s contention that it was not at that point, appropriate to make any costs order, the judge held that the claimants had been the successful party even though much of the defence had not been struck out, but because Zurich had been ordered to address serious deficiencies in its pleadings. Their costs were awarded on the indemnity basis.
In Century Property (Leeds) Ltd v Eville & Jones (Group) Ltd [2025] EWHC 1348 (KB) Andrew Kinnier KC had granted the claimant’s application for mandatory injunctions. He rejected the first defendant’s submission that he should not be ordered to pay the costs because he was a litigant in person and he then carried out a summary assessment. That included a finding that the claimant’s solicitors’ hourly rates at £685 for grade A and £420 for grade C were reasonable.
In Chassy v LEFT SHIFT IT LIMITED [2025] EWHC 1701 (KB), the claimant had succeeded in his claim against the First Defendant and was entitled to damages in the sum of £236,601.91, but had failed in his claims against the Second or Third Defendants based on their status as directors of the First Defendant. Rather than making an issue-based order, Bruce Carr KC made a proportion based order that the first defendant pay 75% of the claimant’s costs of the action, with the claimant to pay the costs of the second and third defendants, to be assessed if not agreed.
Finally on “consequentials”, we have Pashamov v Taylor [2025] EWHC 1644 (KB) which is recommended reading so far as “Sanderson” costs orders are concerned viz what happens (as was the case) where a claimant fails on liability against the first defendant, but succeeds against the second defendant. Simon Tinkler considered the permutations, ultimately deciding that the second defendant should pay the costs of the first defendant, and also the claimant’s costs in claiming against the first defendant, thereby following the useful guidance given in Jabang v Wadman [2017] 4 Costs LR 807.
Next, discontinuance under CPR 38. Upon giving notice, the general rule is that the discontinuing party pays the costs. In Wei v Long [2025] EWHC 1799 (KB), the claimants had issued proceedings alleging defamation against a number of defendants. The third defendant (“D3”) was an online platform registered in the United States which, the claimants alleged, had hosted some of the errant material. Following several interlocutory hearings, the claimants served a notice of discontinuance but only against D3. After undertaking a very thorough examination of the authorities, Hill J held that the claimants had not shown a good reason for displacing the presumption in CPR 38.6, and would therefore pay D 3’s costs to the date of discontinuance.
Finally, a lucky escape for the claimant in Right Support Management Limited v The London Borough of Hillingdon [2025] EWHC 1680 (KB) in which Ritchie J gave relief from sanctions in respect of the failure to file and serve a costs budget within the time permitted under the CPR. Below, the judge had refused relief meaning that the claimant’s costs going forward would be limited to applicable court fees. That decision was reversed, with Ritchie J identifying a number of errors in the judgment below. However, relief came at a price. The claimant was ordered to pay the costs of the sanctions application even though it had succeeded, and if subsequently successful in the action, would recover its costs limited to 80%.
As always, these are a selection of the principal recent cases which are likely to be of use to practitioners and if any further information is required, please contact either Nick McDonnell or Colin Campbell at Nick.McDonnell@kain-knight.co.uk or Colin.Campbell@kain-knight.co.uk.
Click here to read the August 2025 Edition of The Messenger.
