Costs Case Law Update – May 2026
Welcome to the Kain Knight Case Law Update for May 2026, written by Colin Campbell.
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Lloyds Developments Ltd v Accor Hotel Services UK Ltd [2026] EWHC 1238 (TCC) - 2 May 2026
Jefford J dealt with the costs following applications by the defendant for security for costs under CPR 25 and further disclosure under CPR 31. The security application led to £2.3m security being agreed the day before the hearing. The disclosure application, in the absence of any clear evidence that the approach taken to the assessment of relevance, was itself wrong, and given the high level of disclosure already given, it was not proportionate, or in accordance with the overriding objective, to require the claimant to produce all of the documents which their solicitors had concluded were not relevant.
To reflect these factors, including that the CPR 25 application had to be issued in order to obtain substantial further security, the claimant was ordered to pay 75% of the defendant’s costs.
On a summary assessment, the level of correspondence was extraordinarily high and in terms of work on documents, too much time was spent by too many people. However, where more work was done by a junior person the greater was the supervision that would be required by senior people. That was to be reflected in making no reduction for the Grade A to the work on documents because they were supervising and checking the work of someone significantly more junior.
To take account of these factors, the costs claimed were reduced by £14,000.
The judgment can be found by clicking here.
Friend v Friend Media Technology Systems Ltd [2026] EWHC 1056 (KB) - 6 May 2026
The issue for Sweeting J to decide was “Consequentials” on a summary judgment application. The claimant contended that as neither party had obtained summary judgment or strike out, and both had advanced competing constructions concerning Clause 19.4 of an Investment Agreement on which each had succeeded in part and failed in part, that there should be no order as to costs.
The defendant submitted that the position was straightforward: the summary judgment application had been dismissed in its entirety, and the claimant had failed to obtain the relief he sought, including payment of £307,641.69 claimed. Accordingly, the defendant should receive its costs pursuant to CPR 44.2. Sweeting J held that although the Claimant had been unsuccessful in obtaining summary judgment, he had succeeded on an important issue of contractual construction. The defendant was to be regarded as the overall successful party on the application, but its success was not complete.
The claimant was ordered to pay the defendant’s costs, subject to a reduction to reflect the important issue of construction and the mixed outcome more generally. Taking account of these factors and the high level of the defendant’s costs, the costs reduced from £149,000 to £89,400.
The judgment can be found by clicking here.
Timokhin v Timokhina [2026] EWHC 1194 (KB) - 19 May 2026
Dexter Dias J. In a dispute between Russian national former spouses about a contested post-nuptial agreement, the court found in favour of the claimant-former husband. He had made Part 36 offer representing a 9 per cent discount on the value of his full claim.
At trial, the claimant succeeded in full but the defendant submitted that it would be unjust to make the orders set out at CPR 36.17(4) because the offer was not “a genuine attempt to settle the proceedings” under CPR 36.17(5)(e).
That submission failed.
Whilst the court needed to be vigilant against very high settlement offers being used strategically as a device to secure an indemnity award, the claimant had a rational and reasonable basis to conclude that his prospects were strong, and that a discount of just under 10 per cent was justified.
The judgment can be found by clicking here.
Sergio Andrade Cardoso v Salic (UK) Ltd
By his order, Bright J struck out all claims and ordered Pogost Goodhead solicitors to pay the costs of and occasioned by the claims on the indemnity basis. The solicitors had issued proceedings on behalf of a group of people in Brazil who were affected by contamination following a ship sinking. They did so based upon the Powers of Attorney written in Portuguese. However, those Powers had merely given authority to the local Brazilian lawyers to act on their behalf in Brazil, in court in Brazil or out of court.
They had not given the English firm authority to commence proceedings outside Brazil.
The solicitors should not have commenced proceedings without first confirming their authority to do so which would have required checking the Powers of Attorney and taking legal advice from independent Brazlian lawyers. Had they done so, it would have been immediately obvious that their authority to act was questionable and that that should be resolved by seeking confirmation form the claimants. The judge ordered the solicitors to make a payment on account of £900,000 of costs to the defendant, pending detailed assessment of the balance of their costs.
The order can be viewed by clicking here.
Dentons UK and Middle East LLP v Solicitors Regulation Authority Ltd [2026] EWCA Civ 655 - 21 May 2026
The Court of Appeal allowed an appeal by Dentons, itself made on appeal from a decision of the Solicitors ’Disciplinary Tribunal (“SDT”) in proceedings brought by the Solicitors Regulation Authority Ltd ( “SRA”). The issue was who should pay the costs.
The SRA contended that no costs order should be made against it to reflect the fact that it was a regulatory body discharging its responsibilities as a regulator which set it aside from an ordinary litigant in civil litigation. That submission failed.
Where the SRA had the benefit of a determination by the SDT and challenged it on appeal, its position was more akin to that of a normal litigant. Accordingly, Dentons was entitled to 65% of its costs of the two appeals with a payment on account of costs of £200,000 to be paid by the SRA within 21 days.
The judgment can be found by clicking here.
The Winros Partnership v Global Energy Horizons Corporation [2026] EWCA Civ 654 - 22 May 2026
In proceedings commenced under s.70 Solicitors Act 1974 on 31 March 2016, the court refused permission to appeal against the judge’s ruling below that the defendant (GEHC) had not been guilty of an abuse of process in having raised an objection in its Points of Dispute which could have been argued before the Master earlier in the proceedings.
A second issue concerned a conditional fee agreement (CFA) made in March 2013. It was agreed that GEHC committed a repudiatory reach which Winros elected to accept and to sue for damages. Winros subsequently billed GEHC for work undertaken pre-termination. Below, GEHC contended successfully that there had been no entitlement to do that because at that point, there had been no win achieved under the CFA, so there was no contractual entitlement to payment, and the bills should be assessed at nil.
On appeal, Winros submitted that the repudiatory breach constituted a “failure of basis” and that it had been justified for the firm to appropriate funds belonging to GEHC on a quantum meruit because GEHC had been enriched to the value of the firm’s work. That argument failed. Asplin LJ held that the law of unjust enrichment could not be deployed to subvert the express risk allocation freely negotiated by parties to a valid contract. This was not a simple solicitor’s retainer but a sophisticated and highly calibrated CFA which allocated risk between the parties and addressed numerous situations. Clause 14.3 provided a scheme for the consequences of a party’s breach and it was impossible to imply an alternative restitutionary basis contrary to those terms.
Winros could not escape its contractual bargain by electing to accept the repudiatory breach and claim its fees through the law of unjust enrichment. Its appeal failed.
The judgment can be found by clicking here.
