Costs Case Law Update – April 2025
In this latest case law update, compiled by Colin Campbell, we offer valuable insight into a wide range of costs-related decisions, from the interpretation of Part 36 offers to the limits of fixed costs and funder recovery in class actions. Highlights include judicial clarification on the consequences of imprecise offers (Henderson & Jones v Salica Investments), the implications of beating Part 36 in acrimonious litigation (Barry v Barry), and the interplay between domestic costs regimes and former EU principles (Makeality v City Doggo). We also examine rulings on misconduct in budgeting, solicitor costs under the 1974 Act, and the recovery hierarchy in collective redress.
Henderson & Jones Ltd v Salica Investments Ltd [2025] EWHC 838 (Comm) 7 April 2025.The claimant’s Part 36 offer had failed to specify the “relevant period” for acceptance. In issue before Calver J was its validity. He held that the history of correspondence showed that the parties knew full well what the relevant period was, and taken in context, a reasonable solicitor would have understood the offer to be referring to a period of 21 days. That was consistent with earlier Part 36 offers. It followed that the offer was valid and compliant and carried with it the Part 36 consequences.
Barry v Barry [2025] EWHC 819 (KB) 8 April. Following an acrimonious and contested trial in a contract dispute between two parents and their son, it was agreed that the costs would be paid by the son on the indemnity basis. However, the parents had beaten their own Part 36 offers. Dexter Dias J held that it was not unjust for them to receive the CPR 36.17(4) benefits. The £75,000 was all or nothing and was payable in full. Interest on costs was discretionary and 8% above base rate was appropriate. However, due to lack of promptness in applying, it was too late after trial to vary the parents’ costs budget upwards for disclosure and witness statements under CPR 3.15A. Trial preparation was different and a late amendment to the defence was a “significant development” and the application had been made promptly. An upwards variation was permissible.
Vardy v Rooney [2025] EWHC 851 (KB) 11 April and [2025] EWHC 1027 (KB) 29 April. On appeal by Mrs Vardy, Cavanagh J held that there had been no misconduct by Mrs Rooney’s solicitors within CPR 44.11 justifying any sanction being imposed against them. Her budget in precedent H had been completed on the basis that for costs already spent, it represented an estimate of the costs likely to be recoverable on a standard basis, rather than the actual costs that had been incurred already, which were higher. The solicitor’s lack of transparency in not having made the position clear did not amount to misconduct, so Mrs Vardy’s appeal failed. On three subsequent issues, Cavanagh J held that she should pay the costs of the appeal without any deduction relating to points lost by Mrs Rooney in her Respondent’s notice, that the costs should be summarily assessed by the judge’s assessor and that there should be no payment on account because the summary assessment would take place relatively quickly.
Attersley v UK Insurance Limited [2025] EWHC 884 (KB) 11 April. The claimant had accepted a Part 36 offer which had been made pre-allocation to a track, outside the “relevant period”, by which time the case had been allocated to the multitrack. The insurer’s argument that the Fixed Costs Regime should apply to the date of expiry of the relevant period failed. Stacey J concluded that both on a purposive and a literal reading of the rules, where an ex-Protocol case was allocated to the multi-track, it came out of Section IIIA by the wording of CPR 45.29B, and Part 36(20) did not apply. It followed that multi-track costs were payable up to the end of the relevant period and not fixed costs.
Makeality Ltd v City Doggo Ltd [2025] EWCA Civ 400 Holroyde, Arnold, Dingemans LJJ 11 April- In trademark proceedings in the Intellectual Property Enterprise Court, it was the claimant’s case that the small claims track costs regime did not comply with Directive 2004/48 art.14, which required intellectual property cases to be tried in a forum that allowed for the award of a significant and appropriate part of the winner’s reasonable legal costs. That submission failed. Following the Retained EU Law (Revocation and Reform) Act 2023, which provided that no general principle of EU law was part of domestic law after 31 December 2023, it was no longer open to the claimant to advance an argument based on art.14 having direct effect. Since the claim was below £10,000 and could be tried in the small claims track in one day, the judge below had been entitled to conclude that the overriding objective, and in particular the requirement to determine claims at proportionate cost, meant that the claim should be allocated to the small claims track. The appeal was dismissed.
Spanakis v Schillings International LLP [2025] EWHC 873 (KB) 14 April. Tipples J held in proceedings under the Solicitors Act 1974, that the appellant solicitor’s costs should not be limited in any way to a costs estimate provided in respect of part of the work anticipated. That had been £10,000 for “phase one”. Subsequently the solicitors had billed £15,000. The judge held that it had been open to the judge below to find that the client did not rely on the estimate, and there was no basis for an appellate court to interfere with those findings of fact, so the appeal was dismissed.
Gutmann v Apple [2025] EWCA Civ 459, 16 April. In a collective class action, iPhone users alleged that Apple had abused its dominant position through a lack of transparency when it introduced software to deal with an iPhone battery problem. The issue for the court’s decision was whether the group of funders of the actions could be paid out of compensation recovered before any damages could be distributed to members of the class. The court held that payment of the funder’s return and lawyers’ fees from the award of damages in priority to payment to the class was clearly permitted under the Competition Act 1998 Pt I s.47C (3)(a) and (b). Sub-section (3)(a) contemplated that the CAT would make an order for the damages to be paid on behalf of the represented persons (i.e. the class) to the class representative. It did not prescribe what the class representative did with the damages once received and accordingly it would be open to him to pay the funder and the lawyers, subject always to the control of the CAT under its supervisory jurisdiction.
