Monthly Legal Costs Update – December 2025
Here, in Kain Knight Costs Lawyers’ regular monthly legal costs update December 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 December 2025 update has been written by Nick McDonnell and Colin Campbell.
We start with costs budgeting in Part 7 multitrack claims.
It was originally envisaged when it was implemented in April 2013 that budgeting would only apply to cases up to £10m. However, as just demonstrated in White v Uber London Ltd [2025] EWHC 2972, the court’s discretion is unfettered and O’Farrell J refused to make the order sought by Uber that costs budgeting should not apply. The claimants were 13,000 London Black Cab taxi drivers whose individual claims were modest although the group losses were claimed at £340m. Ordering budgeting meant that they would then have visibility of their exposure in respect of Uber’s costs and would enable the court to keep an eye on and manage the costs of the litigation. Accordingly, Uber’s application to dispense with budgets failed.
Still with budgeting, in Malhotra Leisure Ltd v Aviva Insurance Ltd [2025] EWHC 2901 (Comm), the obtaining of an indemnity basis costs order from the trial judge assumed huge significance because the successful claimant had unbelievably exceeded its last approved budget of £546,730.50 by £656,226.59! There must have been sighs of relief when Nigel Cooper KC awarded indemnity costs, meaning that the claimant would not need to prove a good reason under CPR 3.18 for exceeding the budget: as the judge expressed it at [17], when that happens “ … the approved budget becomes irrelevant”. Phew!
Next costs capping.
In Spender & Ors v F.I.T. Nominee Ltd & Anor [2025] EWCA Civ 1319, the Court of Appeal refused to make a costs capping order under CPR 52.19 in favour of 76 tenants (out of a total of 436). The tenants contended that without one, they would be unable to advance their proposed appeal involving a service charge dispute with their landlords, because it would be stifled. The court held that if the landlords successfully defended the appeal, their costs would be recoverable from the tenants who were not subject to the cap, meaning that the those who had chosen not to be involved in the appeal would bear the costs risk. That was not a result which accorded with justice or the overriding objective so the application failed.
Process & Industrial Developments Limited v The Federal Republic of Nigeria [2025] UKSC 36 concerns the currency for the payment of costs. Nigeria had won an eight-week trial and had unassessed costs of £44.2m. P&ID sought to have the costs denominated in naira because for several years, the naira had fallen markedly against other currencies, and that if Nigeria received costs in sterling, it would gain a substantial windfall at its expense. The Justices dismissed P&ID’s appeal, holding that an award of costs is a discretionary contribution towards the liability incurred to the lawyer. It was not compensation for a party’s underlying financial loss, such as currency conversion losses. Nigeria was entitled to a costs order in sterling, as its solicitors had billed in sterling and it had paid those bills in sterling.
Next consequentials.
In Jon Flowith & Partners v Greaves [2025] EWHC 2738 (Ch) – 22 Oct 2025, following a strike out application, Jonathan Hilliard KC dealt with costs orders involving multiple parties. The claimant [C] lost the third defendant’s (D3) application to strike out various claims unless amended particulars were served. D1 and D2 sought their costs of D3’s application from C, who contended for no order. The judge held that the hearing could have been avoided had C submitted a draft amended pleading earlier, and the failure to do so had caused the parties to incur avoidable costs. C was ordered to pay D1 and D2’s costs from the date on which they received the C’s skeleton argument as their support for D3 and their representation was justified by their distinct legal interests and responsive submissions at the hearing.
Craft Development SCI v Actis LLP [2025] EWHC 2744 (KB) is a long and complicated judgement about security for costs under CPR 25 and whether (1) an earlier order to provide security made by Stacey J should be revoked under CPR 3.1.7 as it had been made on a false premise and (2) an order by Morris J as to whether a summary assessment of costs should be replaced by an order for detailed assessment. Jonathan Glasson KC rejected the Claimant’s argument that there had been a change of circumstances because it could now establish a high degree of probability of success such that the Stacey J Order should be revoked. Likewise, the Claimant had not established a material change of circumstances such as to warrant varying the order made by Morris J. It followed that the Claimant was ordered to provide security for costs in the sum of £226,000 within 6 weeks otherwise the case would be struck out.
In CRF I Ltd v Banco Nacional de Cuba and the Republic of Cuba [2025] EWHC 2786, Butcher J dealt with interlocutory costs in respect of (1) Cuba’s application for a payment on account which he dealt with by ordering £300,000 – being 60% of the sum claimed and (2) CRF’s application for the detailed assessment of its costs of BNC’s application to be commenced forthwith which he resolved by refusing an immediate assessment with useful reasons where there exists little authority. The general rule was that the costs of any proceedings were not to be assessed by detailed assessment until the conclusion of the proceedings (CPR r. 47.1). There was no good reason to disapply the rule where (i) a substantial payment on account had been received (ii) the judgment Order provided for interest on costs and (iii) an immediate detailed assessment would require the parties to engage in a complex and time-consuming process at the same time as progressing the matter to trial.
In R. (on the application of Badger Trust) v Natural England [2025] EWHC 2761 (Admin) Fordham J began his judgment thus “This is a judicial review case about badgers.” However, paragraphs 1 and 17 to the end concern costs under the Aarhus convention! They involve whether to change the level of the shielding costs caps which were in place to protect the Claimants. Natural England contended for of an increase beyond the Rule 26 Caps of £10k per claimant, to £20,000 (Wild Justice) and £30,000 (Badger Trust). The court examined the two-limb test for establishing that proceedings were prohibitively expensive for a claimant, and concluded that any increase to the costs caps was objectively unreasonable and the variation application was refused.
Next a factually tortuous dispute in the County Court where there had been separate claims which were case managed and heard together.
In Tates (Agents) Ltd v Nicholas [2025] EWHC 2869 (KB) the proceedings had led to a third party costs order being made against the second defendant under s.51 Senior Courts Act 1981. Freedman J allowed the second defendant’s appeal on the basis that he had never been a party to the principal claim brought against the first defendant, nor given notice of the potential non-party costs order, so the s.51 order was set aside.
Finally, for an example of the court using its powers to make a pro bono costs order in favour of the Access to Justice Foundation under s.194 Legal services Act 2007, see EJW Builders Ltd v Marshall [2025] EWHC 2898 (Ch). The Foundation benefitted to the extent of £117,000.
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
