The Top Five Costs Cases of the Year: 2025
Written by Colin Campbell.
Which are the most important costs cases of 2025?
Not an easy question to answer because what to some legal practitioners might be of the utmost importance, to others they may appear unimportant, depending upon what the judgments decided and who or what they affected. It must be common ground however, that one case in 2025 has stood out as having set a judicial cat amongst the legal pigeons, which has left no laywers’ firms or sets of barristers’ chambers untouched: it is Mazur v Charles Russell Speechleys [2025] EWHC 2341 (KB) (see on a later slide) which has no rival as “The Case of the Year 2025”!
The other contenders are likely to be more controversial, but those which we have chosen are intended to represent the wide spectrum of jurisprudence which the law of costs encompasses.
Case Number 5: Tescher v Direct Accident Management Ltd [2025] Costs LR 1203
Costs orders against credit hire companies in failed personal injury claims.
For those involved in credit hire, Tescher is a seminal case which has resolved an issue running for many years: whether, and in what circumstances, the non-party credit hire company should be made liable for the defendant’s costs where the credit hire claim has failed and the costs order cannot be enforced against the losing claimant due to One Way Qualified Costs Shifting (QOCS) under Section II of CPR 44.
The Court of Appeal held that in both the test cases being heard, the credit hire claims had significantly outweighed the damages sought for the personal injuries and non-party costs orders were required. That means that, going forward, care should be taken not to run up substantial credit hire charges whilst the claimant’s car is undergoing repairs or is awaiting a valuation, since if the claim ultimately fails, the companies providing the credit hire may find themselves on the hook for the defendant’s costs as non-parties under s.51 Senior Courts Act 1981.
Case Number 4: Malhotra Leisure Ltd v Aviva Insurance Ltd [2025] EWHC 2901 (Comm)
The treasure of an indemnity-based costs order where the costs budget has been busted.
This case brought the importance of an indemnity-based costs order into sharp focus where an action has been subject to costs budgeting. The claimant won at trial, but at some expense: the last approved costs budget was for £546,730 but there had been an overspend of £656,226, meaning that absent an earlier application to vary the budget under CPR 3.15A, the excess would be disallowed by the court at detailed assessment unless “good reason” not to do so under CPR 3.18 could be shown.
That is where the indemnity order came in. Nigel Cooper KC awarded the costs of the action on the indemnity basis observing that “If an order for indemnity costs is made, then the approved budget becomes irrelevant; see the White Book 2025 at 3.18.1 and Lejonvarn v Burgess [2020] Costs LR 45…”. So Malhotra got lucky: the indemnity order means the release of the requirement to show “good reason” for the overspend of £656,226, and all those costs will be potentially recoverable after all.
Case Number 3: Magomedov v TPG Group Holdings (SBS) LP [2025] Costs LR 65
Justifying Hourly Expense Rates on detailed assessment.
The Guideline Hourly Rates (GHR) for Summary Assessment have just been increased by 2.28%, see Guideline Hourly Rates 2026 here.
But how will these impact upon rates to be allowed at detailed assessment? Not a lot, if anything, is the correct answer. Contrary to myth and to submissions repeatedly made in Points of Dispute, the GHR are not the starting point for deciding rates at detailed assessment. The GHR are what they say they are on the tin: they are for the Summary Assessment of costs at hearings lasting up to one day, and as Bright J said at paragraph 8 “…The guideline hourly rates are not used in detailed assessments…”.
What the court takes into account are the factors in CPR 44.4(3) (value, complexity, importance to the parties etc) and Magomedov is a useful reminder of that.
Case Number 2: The Winros Partnership v Global Energy Horizons Corporation [2025] Costs LR 1311 and [2025] EWHC 3362 (Ch)
The Solicitors Act 1974; still a caution to rattlesnakes.
The Solicitors Act 1974 must have a place in the 2025 line up and Winros is the 21st Century version of Jarndyce & Jarndyce, the Dickensian case in Bleak House which “No man alive could ever understand it or settle it”. Almost 10 years ago to the month, the costs judge had ordered detailed assessment of various bills totalling over £6m for work undertaken by Winros under Conditional Fee Agreements.
Below, the senior costs judge had held that it had not been an abuse of process under Henderson v Henderson principles ([1843] 3 Hare 100, for the former client to raise in 2023, that a bill delivered in 2012 had not been a statutory bill and should be assessed at nil. For different reasons, Marcus Smith J agreed, holding that there could be no fair criticism levelled at Global because, without consulting the parties, the original costs judge had directed in June 2026, that two points be determined as preliminary issues namely (1) whether the CFAs were valid and (2) whether the solicitors had been entitled to end the retainer. The parties had quite properly been following those directions until the preliminary issues were finally resolved by Trower J in 2022- (see [2022] Costs LR 543).
The matter having taken the allotted two days, the judge could not deal with the other issue – whether the senior costs judge had been right to have assessed the remaining bills at nil. He had been correct, ruled Marcus Smith after another hearing – see [2025] EWHC 3362 (Ch). Following the breakdown of their relationship, Winros had terminated the retainer before any ‘win’ had occurred under the CFAs.
The issue was whether upon termination of a CFA by acceptance of a repudiatory breach, the solicitor was entitled to payment for work done up to the date of termination, where no success had been achieved. The judge held that such termination was at common law, rather than under Winros’ contractual termination powers under the CFA, and that no common law restitutionary claim was possible given the existence of a contractual power to terminate for cause, which Winros had deliberately chosen not to exercise. There was no room for a claim for unjust enrichment because the retainer already articulated what was to happen in such a case. It followed that Winros were not entitled to any payment for work they had first undertaken almost a decade and a half earlier. Ouch!
Case Number 1: Mazur v Charles Russell Speechleys [2025] EWHC 2341 (KB)
Who is authorised to conduct litigation?
The answer is that nothing done before the issue of proceedings is conducting litigation, but immediately upon the issuing, prosecution and defence of proceedings in a court of England and Wales, litigation is being conducted – see paragraph 4(1) Schedule 2 Legal Services Act 2007 (”LSA”). Where that is the case, only persons authorised either by law or by an approved regulator are permitted to do so. Miscreants who do not have such authorisation commit a criminal offence under s.14, and so do their employers under s.16 if they have been supervising non-authorised staff in the conduct of litigation.
Who can grant a ticket to conduct litigation? The regulators are:-
- For solicitors with a practising certificate – the Solicitors Regulation Authority (SRA)
- For barristers with a litigation extension – the Bar Standards Board
- For chartered legal executives with independent practice rights (”IPRs”) – CILEx Regulation
- For costs lawyers with the costs lawyer qualification (costs litigation only) – the Costs Lawyers Standards Board
In Mazur, the court was told that the SRA had notified the solicitors instructed on behalf of Charles Russell Speechleys, that an unqualified person had been entitled to perform the work because he was deemed to be authorised to do so under s.21(3)(b) LSA, as an employee of the firm which was a “body duly authorised”.
That advice had been wrong. Sheldon J held that there was a crucial distinction between an employee who is supporting an authorised person in conducting litigation, and an employee who is conducting litigation under supervision. “Supporting” is permitted: conducting litigation under supervision, is not and is a criminal offence.
The denouement? The Court of Appeal will hear an expedited appeal against Sheldon J’s judgment on 24 February 2026. This is because his decision is already generating satellite litigation. For years (and years) work has been delegated to non-authorised fee earners (eg legal executives without IPRs, trainee solicitors, paralegals and barristers without a litigation extension) under supervision of their principals. Given that doing so is a criminal offence (at least until the Court of Appeal says otherwise) can the costs of doing that work be recoverable in civil law where the conduct of it was illegal in criminal law? The jury is out on that one and where the point has been taken, detailed assessments are being stayed until the Court of Appeal delivers…. No prizes for guessing the leading candidate for “Case of the Year 2026”!
