Monthly Legal Costs Update – January 2026
Here, in Kain Knight Costs Lawyers’ regular monthly legal costs update January 2026, 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 January 2026 update has been written by Nick McDonnell and Colin Campbell.
The award for Case of the Year, for which there was no real competition, goes to Mazur v Charles Russell Speechley Bircham LLP [2025] WEHC 2341 (KB).
Sheldon J has sent shivers down the spine of the legal profession in holding that unqualified fee earners cannot conduct litigation under supervision of an appropriately qualified fee earner without committing a criminal offence under s.14(1) Legal Services Act 2007. They can only support the qualified fee earner following the issue of proceedings in the High Court or County Court: that, at least, is the current law, but CILEx Regulation has obtained permission from the Court of Appeal for a further appeal in Mazur, so Sheldon J’s judgment could still be reversed!
Click here to read practical guide for solicitors, written by Colin, following Sheldon J’s judgment.
Back in the courts, Trower J has ordered the largest payment on account of costs ever, following the trial in JSC Commercial Bank PrivatBank v Kolomoisky & Ors (Rev1) [2025] EWHC 2909 (Ch).
The bank succeeded and obtained an order for indemnity costs. Those costs were £110,524,169.99 and £80m of that was sought on account under CPR 44.2(8). The judge reduced this for “uncertainty” having commented that grade A solicitors’ hourly rates at £1,028 were too high. But that merely dented the request by £3.6m, meaning that the defendants would need to pay £76.4m within 14 days of the order!
Still with the big money, in Merricks v Mastercard Inc [2025] CAT 69, Sir Peter Roth dealt with consequentials following approval of the settlement for £200m. In issue was how the settlement pot should be distributed between class members, Innsworth (the funder), legal costs, and the destination of any unclaimed funds.
The judge refused Innsworth’s application that its costs of intervening to oppose the settlement, should be paid out of the settlement pot. Innsworth’s intervention had not been made to assist the Settling Parties in satisfying the Tribunal that the arrangements proposed were reasonable, but was a determined attempt to defeat the settlement proposal, including the amount of the return that would be paid to Innsworth.
The Judge also directed that solicitor-client costs of the Class representative to be paid or reimbursed out of the Settlement Sum, would be limited to reasonable costs, with any assessment to be conducted by an expert assessor without points of dispute, and with his report to be submitted to the tribunal upon which submissions could then be made.
Next, contested probate.
In Kaur v Kaur & Ors (Re the Estate of Raj Kaur) [2025] EWHC 2806 (Ch), ten children disputed the will of their late mother. One son (SS) had been a defendant and was subsequently joined as a claimant. Later, by e-mail he indicated that he was “resigning from the case”. At trial, Simon Gleeson considered the consequences, observing that CPR r. 38.2 (2) provides that where there is more than one claimant, no claimant can discontinue unless every other claimant consents in writing or the court gives permission: neither of those conditions had been satisfied.
On the first day of trial, SS was still a party to the action as a claimant, despite the fact (according to the judge) that he probably believed that he was not. In these circumstances, the judge was prepared to treat him as having ceased to be a claimant as of the first day of the trial, with representations as to whether he should pay the costs upon discontinuance to be addressed when the question of costs arose for determination.
Lee v BDB Pitmans LLP [2025] EWHC 2955 (Ch) deals with consequential costs following amendments to the Particulars of Claim made by consent. The court departed from the usual costs order holding that costs were to be in the case because (1) there was virtually no wastage or duplication as a result of the new particulars being introduced, and (2) the first defendant had not stated its position on liability earlier in the process.
Back to the big money and the high-profile privacy claim involving Prince Harry and other celebrities.
In Baroness Lawrence of Clarendon v Associated Newspapers Ltd [2025] EWHC 3207 (KB) Nicklin J, sitting with Master Cook, decided the claimant’s costs liabilities should they lose: each claimant would be severally liable for their own costs specific to their individual claims, but jointly and severally liable for all costs common to the claims. That was important because the claimants’ After-the-Event insurance might need to be adjusted to reflect the liability for common costs, should any of the other claimants fail to pay their share.
In addition, the court approved variations to the costs budgets under CPR 3.15A, including a mere £200,000 each for the claimants and defendant respectively for a prospective third case management conference!
Finally, we end with the Rule that just keeps giving – Part 36.
In Thomas v Secretary of State for the Home Department [2025] EWHC 3274, the claimant had made four Part 36 offers, the last in the sum of £15,000 in a claim for unlawful detention. A Consent Order had been made for payment of £16,000 after the claimant had succeeded at the liability trial, but before the quantum trial. The principal issue which then arose was whether the costs consequences set out in CPR 36.17(4) were engaged.
It was The Defendant’s submission that there must be a judgment before that rule came into play under which the successful party would be entitled to benefits such as an additional sum and enhanced interest. HHJ Freedman rejected that argument, holding that the mere fact that the word “judgment” did not appear in the Consent Order was of no consequence when considering its effect. Indeed, an Order made by the Court following a Trial could have been drafted in precisely the same terms as the Consent Order. It followed that the claimant received his additional sum of 10% of damages under CPR 36.17(4).
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
