Costs Case Law Update – February 2026
Welcome to the Kain Knight Case Law Update for February 2026, written by Colin Campbell.
This month’s review features significant rulings on costs across various domains, covering everything from the mechanics of joint liability in multi-party actions to the recoverability of solicitor fees following the termination of a retainer.
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Parsons v Convatec Ltd [2026] EWHC 300 (Pat) – 30 January 2026
Richards J carried out costs budgeting in a patent action involving seven patent families and 73 individual patents worth (on the claimant’s case) £366m, with the trial listed for 27 days. The Judge set out nine principles which the court needed to apply in carrying out the task as identified in Various SAM Borrowers v BOS [2022] Costs LR 1715, to which he added four uncontroversial considerations. In doing so, he stated that with the benefit of only a partial snapshot of what had happened so far, he could not form any view on the reasonableness or proportionality of the costs incurred to date.
He added that the mere fact that £1,100 per hour was claimed for Grade A for Freshfields solicitors for the defendant, did not, of itself, mean that this was unreasonable or disproportionate if the partner was able to do a task in one hour that a more junior member of staff would take three hours to do. The defendant’s budget was not so obviously unreasonable or disproportionate as to call into question whether the court could trust it. With the claimant’s budget having been largely agreed, the Judge allowed £5,591,550 for the defendant’s budget against £6,847,425 sought in Precedent H.
The judgment can be found by clicking here.
Limited Liability Company Air Company Air Manas v GTLK Middle East SPV Three Ltd [2026] EWHC 177 (Comm) – 30 January 2026
Bright J decided the appropriate figure for security for costs under CPR 25 where the underlying arbitration had been reasonably straightforward and did not require the most expensive solicitors on the market to conduct it. When considering the hourly rates charged by the solicitors which were well above guideline rates, he expressed surprise that two Grade A partners were to attend trial, along with three further lawyers: it was unclear what benefit would be derived from such numerous representation. Against a claim for £300,000, the judge allowed £125,000.
The judgment can be found on Westlaw® by clicking here.
CR Construction (UK) Ltd v Barclays Banks Plc (Costs) (Technology & Construction Court) [2025] EWHC 288 (TCC) – 4 February 2026
The issue for decision by HHJ Stephen Davies was whether a party intervening in proceedings for an injunction involving a tripartite contract, should be entitled to costs and to a summary assessment. He held that in principle the the intervenor should have its reasonable costs of its involvement in the proceedings but limited to reading into the case on receipt of the evidence, of responding via witness evidence and submissions, and of attending the hearing. Those costs he summarily assessed at £75,000.
The judgment can be found on Westlaw® by clicking here.
Cubic Transportation Systems Ltd v Transport for London [2026] EWHC 211 (TCC) – 5 February 2026
Roger Ter Haar KC set out the principles where an interested party sought its costs in a procurement dispute involving a contract for revenue collection services in which it had been permitted to participate . The interested party had taken no active part but had submitted evidence in relation to an application to lift an automatic suspension, incurring costs of £233,599. The judge held that that figure had included a significant element unrelated to the application. It followed that it was appropriate to reserve issue of the costs to the trial judge.
The judgment can be found on Westlaw® by clicking here.
Choksi v India [2026] EWHC 217 (KB) – 6 February 2026
The issue for Mansfield J was the level of security for costs to allow in an action for damages for personal injuries. He stated that three elements were relevant to the exercise of discretion (i) the merits of the claim (ii) the risk of non-enforcement of an order for costs against a Claimant resident out of the jurisdiction and (iii) the Claimant’s ability to provide security and continue the claim. On the facts, there was no evidence that the claimant had assets in the jurisdiction and he was on remand in Belgium pending proceedings to extradite him to India. Without any real evidence that an order for security would stifle the claim, the judge ordered security in the sums of £425,000 for the second and fourth Defendants and £252,000 for the fifth and sixth Defendants.
The judgment can be found by clicking here.
KXO & Anor v Devon County Council [2026] EWHC 203 (Admin) – 3 February 2026
Paul Bowen KC considered whether the Court’s permission or approval was required for discontinuance under CPR 38 or, since the claim had been brought by a child or protected party, under CPR 21.10. The action had involved a judicial review with both claimants being minors at the start, with one having attained his majority. The judge held that where discontinuance constituted the ‘settlement’ or ‘compromise’ of a claim, the Court’s approval was required under CPR 21.10 even if it was not needed under CPR 38.2. However, “the mere discontinuance of a claim by” a child or protected party under CPR did not require the approval of the Court; only if the discontinuance amounted“to a settlement or a compromise of his claim” was approval needed under CPR 21.10(1).
Given that in the present case the notice of discontinuance had been issued unilaterally and not pursuant to any agreement between the parties to settle the matter, the Court’s approval for the discontinuance of the Claimants’ claim was not required under CPR 21.10. The litigation friend was ordered to pay the defendant’ costs.
The judgment can be found by clicking here.
Various Claimants v Mercedes-Benz Group AG [2026] EWHC 267 (KB) – 10 February 2026
Cockerill LJ and Senior Costs Judge Rowley continued to deal with costs budgeting in the “Dieselgate” litigation, warning the parties about “overlawyering”.
In doing so, the court considered whether there should be a departure from the usual order in costs management hearings that the costs should be in the case. The judges held that the claimants’ conduct had taken them onto the wrong side of the line by resolutely pursuing an unrealistic or overly ambitious budget. It followed that the appropriate order was that the claimants’ costs of and incidental to the costs budgets, budget discussion reports and Precedents R, (if awarded), would be allowed at 80%, whereas those of the defendants (if awarded) would be at 100%. The costs of attending the CMH were ordered to be costs in the case.
The judgment can be found on Westlaw® by clicking here.
R (on the application of ABB) v SS for the Home Department (SSHD) [2026] EWCA Civ 61 – 12 February 2026
The Court of Appeal (Baker, Nugee, Yip LJJ) overruled the decision of the court below to allow the applicant in judicial review proceedings just 75% of his costs. An applicant who had got what he wanted and was wholly successful, was entitled to recover his costs in full unless there was some good reason to the contrary or some special circumstance. On the facts before the judge below, there were none. Accordingly, a 100% costs order should have been made.
Nugee LJ stated obiter that in legal aid cases, the ability to recover costs at inter partes rates where the claim had succeeded, had a practical importance in terms of the financial viability of running a legal aid practice, and hence in terms of access to justice. It was of real importance that where an order for full costs was merited, that such an order was duly made.
Harrington & Charles Trading Co Ltd (In Liquidation) v Metha [2026] EWHC 387 (Ch) – 19 February 2026
Joanna Smith J, Master Kaye delay with who should pay the costs of an application for security for costs which had been resolved before the return date for the application.It was the defendants’ case, albeit that they had not obtained either a payment into court or a bank guarantee, that they now had the benefit of a satisfactory ATE Policy with cover for some £13 million which they did not have before they issued the application.
They had been successful and should have the costs order in their favour. The claimants argued that the application had been issued prematurely.
The court held that it needed to be alive to the fact that parties compromised applications for many different reasons, sometimes pragmatic and commercial, and that they should be encouraged to do so rather than penalised for doing so. It was neither reasonable, proportionate nor consistent with the overriding objective to have an arid debate about what the outcome might have been if the application had been fully argued. It was not the role of the court to make predictions about what the outcome would have been if the application had been argued. No order as to costs was the appropriate order.
The judgment can be found on Westlaw® by clicking here.
Duffy v Birmingham City Council [2026] EWCA Civ 146 – 25 February 2026
Newey, Phillips, Nugee LJJ decided whether a bill of costs was invalid (and ineffective to commence a detailed assessment under CPR 47.6) if, although signed by a solicitor, that solicitor had not also expressly certified that “the costs claimed do not exceed the costs which the receiving party is liable to pay to me/my firm”, that is to say, that the bill complied with the indemnity principle.
The court held that whilst the express certification that the bill complied with the indemnity principle was a mandatory requirement under the rules, there was no justification for treating a breach of that requirement as fatal to the validity of the bill any more than any other breach. Indeed, given that the signature of the bill constituted implicit certification, it might be seen as a less serious error than many others. It followed that the claimant’s bill was valid and effective to commence a detailed assessment and the claimant was entitled to a default costs certificate following the failure of the losing party to serve points of dispute.
