Monthly Legal Costs Update – September 2025
Here, in Kain Knight Costs Lawyers’ regular monthly legal costs update September 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 September 2025 update has been written by Nick McDonnell and Colin Campbell.
The end of the Trinity Term has brought a wealth of judgments. In this Kain Knight Manchester Messenger, we focus on cases with practical relevance for legal costs practitioners. Click on a topic below to jump straight to the summary.
- Wasted Costs: An unusual case where a party was ordered to pay for wasted trial time before the final judgment on liability had even been delivered.
- Qualified One-Way Costs Shifting (QOCS): A High Court decision confirming that a claim “in the round” for personal injuries should receive full QOCS protection.
- Restructuring Plan Costs: A Court of Appeal ruling that the “costs follow the event” principle applies to appeals against the sanctioning of restructuring plans.
- Summary Assessments of High Costs: We review three contrasting cases – two where the court summarily assessed costs over £175,000, and one where it refused due to high hourly rates, ordering a detailed assessment instead.
- Solicitors Act 1974 – A Modern ‘Bleak House’: The latest judgment in a protracted dispute involving unenforceable Conditional Fee Agreements, abuse of process arguments, and a major procedural error by the court.
- The Indemnity Principle & Criminal Legal Aid: A High Court ruling that a successful party on criminal legal aid can only recover the lower legal aid rates from their opponent, not higher private client rates.
- Consequential Orders & Serving Schedules: A salutary warning on the importance of serving a costs schedule on time, as failure to do so can result in recovering no costs on summary assessment.
- Repayment of Costs After a Successful Appeal: A useful reminder that an order for the repayment of costs and damages must be made against the client who received them, not their solicitor.
- Family Law Costs: Two key decisions on costs, one where fraudulent non-disclosure in a pre-nuptial agreement led to an indemnity costs order, and another concerning non-party costs orders against the Lord Chancellor.
- Payments on Account of Costs: A Court of Appeal judgment criticising “extraordinarily high” costs in a restructuring plan and highlighting that the greater the payment sought, the better the justification must be.
We begin with an unusual case involving wasted costs. In Abbotsley Ltd v Pheasantland Ltd [2025] EWHC 2076 (KB), HHJ Walden-Smith was asked to make an order that the second claimant pay wasted costs to the defendant before she had delivered her judgment on liability, because the fifteen day trial had overrun by five days due to her ( the second claimant’s) behaviour. The judge agreed that she had jurisdiction to do so under s.51 Supreme Court Act 1981 and that it was just to make the order because the second claimant had clearly wasted court time and delayed progress of the case. The combined total of wastage was one and a half days, representing a cost to the defendant of £6,300 which the second claimant was ordered to pay within 14 days.
Turning now to Qualified One Way Costs Shifting (QOCS), in ALK v Chief Constable of Surrey [2025] EWHC 1964 (KB), the court below had dismissed a claim for false imprisonment and permitted the Defendant to enforce 70% of his costs against the Claimants under CPR 44.16(2)(b). Bourne J allowed the appeal on liability, meaning that the appeal against the decision below on QOCS was academic. However, in case a further appeal restoresthe decision below, he set out his conclusions on QOCS, holding that the claim “in the round” had been for personal injuries. Accordingly, the claimants ought to have had QOCS protection in respect of all (viz 100%) of the Defendant’s costs.
In Kington SARL v Thames Water Utilities Holdings Ltd [2025] EWCA Civ 1003, the Court of Appeal dismissed an appeal against an order below sanctioning a restructuring plan (the “Plan”) in respect of the defendant. As regards the costs, Kington argued that “costs follow the event” ought not to apply in the case of an appeal from a decision whether to sanction a scheme of arrangement or restructuring plan: if not, that they should be regarded as the successful parties because the Court in substance had agreed with their submissions on the legal principles to be applied.
Those submissions failed, Flaux C holding that once the court exercised its discretion to sanction the Plan, the Plan Company needed nothing more from the court in order to implement the plan. Costs “followed the event” albeit that a discount of 40% was appropriate to take account of the appellant’s success on the legal issues.
Next two cases which shows how willing the court can now be to carry out summary assessments involving large sums of money and one where it was not. In Cohen & Anor v Co-Operative Group Ltd & Ors (Re Costs) [2025] EWHC 1981 (Ch), joint liquidators applied unsuccessfully to amend their points of claim and to rely on expert business valuation evidence. The successful respondents served an updated statement of costs totalling £181,374.28 comprising £93,548 in solicitors’ time costs, £86,900 in counsel’s fees, and £926.28 in travel expenses for attendance at the hearing. HHJ Hodge allowed the hourly rates, but disallowed the time spent by two of the four fee earner attending the hearing (the liquidators had six!) and assessed the costs at £177,488.28. In K v V and N [2025] EWHC 1704 (Comm) Calver J had dismissed the Claimants’ challenges under sections 67 and 68 of the Arbitration Act 1996 in a matter lasting more than one day.
The defendant’s schedule of costs claimed £261,295. He held (1) that “No sensible purpose would be served in forcing the parties to incur the delay and further costs involved in a detailed costs assessment ”(2)“ summarily assessing costs was a rough and ready exercise” (3) £200,000 payable within 14 days was the right sum to allow.
However, both these judgments can be contrasted with the approach in Lime Technology Ltd v Liverpool City Council (Re Costs) [2025] EWHC 2037 (TCC). Roger Ter Haar KC was asked to carry out a summary assessment following a challenge to a procurement decision and disclosure. The schedules claimed £77,468.25 and £90,372. The partner’s hourly rate charged £1,345.50 per hour; the senior associate £895.50 and the associate £463.50.
The judge held that any rates he allowed might be adopted as being binding in two linked actions which would be potentially unfair, and he ordered a detailed assessment with a payment on account of £100,000. Given this “very rough and ready” process, successful parties might reflect that they would be better to argue their corner for a detailed assessment, with a good payment on account to keep them going pro tem, rather than a summary assessment which results in a large reduction to the costs sought.
No month would be complete without the Solicitors Act 1974. In protracted proceedings under the Act likened by Marcus Smith J to Jarndice v Jarndice in Bleak House, the latest judgement has been given in The Winros Partnership v Global Energy Horizons Corporation [2025] EWHC 2044 (Ch). In short, the Master had ruled on 28 August 2020 that conditional Fee agreements under which Winros had acted for Global were unenforceable, so the firm could recover none of their fees of about £6m. Trower J reversed the decision (see [2022] Costs LR 543) and directed that the senior costs Judge (SCJ) should carry out the detailed assessment. Before the SCJ, Global advanced a new argument that no statutory bill had been delivered and, even if it had, Global was not liable to pay the bills because they were delivered after the termination of the retainer when Winros had asserted a claim for damages in the Chancery Division.
The SCJ ruled on 29 February 2024 that it was not an abuse of process to take these points more than three years after the hearing before the Master, and went on, again, to assess the bills at nil. On appeal to Marcus Smith J, the judge could see no clearer case of an abuse of process but that did not get Winros home. The Master had given directions for the hearing of two preliminary issues before there had been any pleadings. That had been a major procedural error on the part of the court acting of its own motion. It followed that no criticism could be levelled at Global for not taking the point earlier, so the abuse point failed, leaving the “assessed at nil” argument to be heard in November. The modern-day Bleak House continues!
Next our old friend the indemnity principle – McGivern v MBR Acres Ltd & Ors [2025] EWHC 2070 (KB).
In a dismissed contempt application brought by MBR against Ms McGivern (Ms M) for alleged breaches of an injunction, Ms M had had the benefit of a criminal legal aid certificate under section 16 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LASPO”), which, while largely civil in nature, were classified as “criminal proceedings” for the purposes of legal aid under LASPO. In her bill, Ms M claimed £400 per hour for her solicitor at his private client rate, but MBR would only pay the significantly lower legal aid rate. They were right, Sweeting J held, upholding Master Whalan’s decision below. Although in civil proceedings, Regulation 21 Civil Legal Aid (Costs) Regulations 2013 and s.28(2) of LASPO explicitly override the indemnity principle in civil legal aid, there is no equivalent disapplication in criminal legal aid. Any perceived “absurdity” in a successful legally aided party being unable to recover full between-the-parties’ costs, was a matter for the legislature, not for the courts.
Next the burgeoning number of judgments about consequentials. Following on from the judgment in Turner v Coupland Cavendish [2025] EWHC 1605 (KB), the parties could not agree the terms of the order. Sweeting J held in (2025] EWHC 2112 (KB) that as the claimant had won the appeal, he should have his costs, which he assessed at £14,057.76 against a schedule of £16,915.36 (counsel’s brief fee at £7,000 was ticked through). However, he made no order as to the costs below as the claimant had only succeeded on his Part 18 request (disclosure failed), and he had not served a schedule of costs in breach of CPR 44 PD.9.5(4). Another salutary warning that if you serve late, or not at all, you will be likely to lose any costs on a summary assessment to which you would otherwise be entitled!
Sweeting J has also given an interesting judgment in Burger v JD Wetherspoon PLC [2025] EWHC 1289 (KB) in which he reversed the decision below to award personal injury damages of £69,775.50 and costs on account of £90,000, and directed that these be repaid to Wetherspoons with interest. On the assumption (just that – no finding on that point) that the damages had long since been spent, Wetherspoons sought an order that the repayment be made by Mr Burger’s solicitors. In a useful reminder that recovered costs belong to the client and not to his solicitor, Sweeting J refused to make the order because the underlying liability, now extinguished by the successful appeal, was Mr Burger’s.
An order for repayment should properly be made against the party who received the benefit of the order that has been set aside, and not against his solicitors.
Next, family law costs.
In Helliwell v Entwistle (Costs) [2025] EWCA Civ 1071, the parties had made a pre-nuptial agreement in which, in the event of a divorce, neither would make any claim against the other. However, the wife had deliberately and fraudulently failed to disclose 73% of her assets. That was conduct out of the norm, and justified an indemnity basis costs order against her where the husband had succeeded in his appeal against a financial remedies order that had upheld the pre-nuptial agreement. In Smith v Lord Chancellor [2025] EWFC 241, legal aid had been given to the respondent in proceedings under the Children Act 1989 concerning her intention to re-locate their child to China. The applicant applied for a non-party costs order (NCO) against the Lord Chancellor to recompense him for his substantial outlay in costs, but his application failed.
Sir Andrew McFarlane held that where a non-legally-aided party is successful in a case against a legally-aided party, the Family Court’s general jurisdiction, under the Senior Courts Act 1981 Pt II s.51(1)(ba), is limited by the Civil Legal Aid (Costs) Regulations 2013 Pt 3 reg.9(2), so no NCO could be made.
Lastly, and hot off the press, comes Saipem SpA v Petrofac Ltd [2025] EWCA Civ 1106 involving a payment on account of costs under CPR 44.2(8) following an appeal about multimillion dollar Company Restructuring Plans. Saipem sought £3.75m being 60% of £6,231,195. Horrified, the Court of Appeal directed the service and filing of “… a schedule of costs, providing sufficient detail for the Court to determine the amount of a payment on account”. When the schedule was provided, it now totalled £6,405,924 with the highest rate for the solicitors being £1,096 per hour, the leader’s brief fee £125,000, the junior’s £80,000, and his refreshers £7,500.
Such restructuring costs were “extraordinarily high” and the court had not been provided with any justification focussing on the specific complexity or novelty of the issues raised by the Plans, any necessity for matters to be dealt with in a particularly expedited timescale, or the identifying of any particularly difficult international complications encountered by the solicitors that were not routine for a plan of the type under consideration. That also applied so far as the fees of counsel and financial experts were concerned. Despite these “manifest deficiencies, the court ordered a payment of £2m, but the lesson here is that the greater the payment on account you want, the better must be the material to back it up.
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 September 2025 Edition of The Messenger.
