Costs Case Law Update – August 2026
Welcome to the Kain Knight Case Law Update for August 2026, written by Colin Campbell.
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Global-365 Plc v PayPoint Plc [2026] CAT 67 - 07 August 2026
The issue for decision was the liability for costs following the CAT’s earlier judgment ([2026] CAT 43) that PayPoint had abused its dominant position in the market for the supply of OTC prepayment services to energy suppliers in Great Britain and awarded Global damages of £169,334 being 0.15% of the claim at the time of the trial.
Global accepted that a percentage reduction to the costs would be required but hat this should be limited to 30%. PayPoint contended that it should be treated as the successful party having regard to the unusual and extreme circumstances of the proceedings. Although the Tribunal had largely accepted Global’s case on liability, this was a money claim in which £170m had originally been sought and Global had recovered approximately 1% of that sum.
Lord Richardson held that although there was no prescribed "general rule" in the CAT Rules that the unsuccessful party should pay the costs of the successful party corresponding to CPR 44.2(2(a), that was the approach generally adopted by the Tribunal. The issue was which of the parties had been successful. That was Global as being the party receiving money at the end of the case.
The judge declined to follow the approach urged on him by PayPoint - had the Defendant denied the Claimant the prize that he brought the action to win? That was because Global had vindicated each element of its substantive claim and the CAT had held that PayPoint had abused its dominant position by acting in an exclusionary manner, damaging competition in the market.
From the outset of the litigation, PayPoint could have made an offer in terms of r.45, thereby entitling it to the protection provided by the rule. As to the percentage deduction, 30 % understated the significance of the issues of causation and quantum at trial and did not reflect the size of the gap between the unrealistic pleaded claim and the actual loss caused by PayPoint's conduct. The just figure was 60%, so PayPoint was ordered to pay 40% of the costs of the action.
You can view the full judgment by clicking here.
Abbott v Ministry of Defence [2026] EWHC 2083 (KB) - Garnham J, Master Brown - 07 August 2026
The court dealt with the costs of preliminary issues in proceedings for damages for noise induced hearing loss suffered by members of HM armed forces and test claims brought by two former soldiers.
The Claimants applied for 95% of their costs in respect generic issues determined by an earlier judgment, including the two test cases, and a payment on account of £6,013,822.09. The court held that the Claimants had been very largely successful on the major issues in the case, those that attracted most attention and required most work in the trial, and the soldiers had won damages.
However, the MOD had achieved success on the utility of military audiometry, latency, acceleration and cochlear synaptopathy and on loss of future earnings, in so far as that issue had been tested. Taking those factors into account, the appropriate costs award was that the MOD would pay the Claimants 60% of their costs, after detailed assessment. As to the payment on account, the court had real concerns about the costs generally and particularly as regards the hourly rates claimed, the total number of hours worked, the seniority of the solicitor engaged on some of the tasks involved, the appropriateness of the levels of delegation adopted and the disbursements.
Applying a broad brush, the appropriate figure was £2,515,194.95, having given credit for an earlier payment made on account of £1,355,000. 60.
You can view the full judgment by clicking here.
Watford Insurance Company Europe Ltd v Bassey & Anor [2026] EWHC 2126 (KB) - Cavanagh J - 10 August 2026
Cavanagh J’s task on appeal was to decide whether the court had a general discretion to vary an approved costs budget under CPR 3.15A where there was no agreement between the parties to that course and no significant developments had occurred since the budget had last been approved.
Below, the judge held that such discretion existed. That decision had been wrong.
Whilst the claimant, who wished to vary his budget upwards by £238,350, had advanced factors such as extensions to the trial timetable and increased disclosure obligations as being significant developments which potentially increased costs, that was not the relevant test. The question was whether the developments were genuinely unforeseen and fell outside the reasonable contemplation of the parties when the original budget was approved.
The events relied on by the claimant were not significant developments occurring after the last budget had been approved. Accordingly, the court’s jurisdiction to vary the budget under CPR 3.15A was not engaged and the judge below had been wrong to hold that in their absence, he had power to carry out variations under the rule.
Beyond that, however, the court was not prepared to decide whether there was discretion to vary cost budgets if the parties agreed that this should be done, even if there had been no significant developments in the litigation since the date on which the budget had last been approved.
You can view the full judgment by clicking here.
Baroness Lawrence of Clarendon v Associated Newspapers Ltd [2026] EWHC 2207 (KB) - 21 August 2026
Following the dismissal of the action on all counts after a 41 day trial, Nicklin J decided the liability for costs. In issue was whether these should be on the standard or indemnity basis and the amount of any immediate payment.
The judge found that although none of the seven Claimant had been dishonest in their evidence, a combination of factors had taken the case out of the norm: this included the exceptional breadth of the pleaded case, the failure to withdraw allegations that could no longer be properly maintained, the advancing of very serious allegations involving evidence given to the Leveson Inquiry which had no foundation and the putting of un-pleaded allegations to witnesses during their cross-examination.
That justified an order for indemnity costs, which, as a consequence, meant that the Defendant could seek to recover costs exceeding the last approved costs budget of £13,464,098. However, at £34.5m, those costs were striking and appeared to be excessive and exceptionally high, but it was not appropriate for the court to exercise its power to cap them, due to the absence of any detailed evidence of what the appropriate ceiling should be.
Quantum was a matter for the Costs Judge on detailed assessment. As to a payment on account, against a request for just under £10m, the appropriate figure was £9,544,355 payable within 7 days.
You can view the full judgment by clicking here.
