Costs Case Law Update – May 2025

Below, Lang J had held that a claim for judicial review was an Aarhus Convention claim (see (see Article 9(3) Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters) falling within Part IX of CPR 46 and had ordered that the costs limits in CPR 46 should apply. The Court of Appeal reversed her decision. Part IX gave partial effect to Art.9(4) by imposing costs limits on Aarhus Convention claims. The Convention required each party to ensure that members of the public had access to administrative or judicial procedures to challenge acts and omissions by private persons and public authorities which contravened provisions of its national law relating to the environment. The challenge in question had amounted to allegations of breaches of public law principles and not to any breach of the country’s law relating to the environment or environmental law. Accordingly, it had fallen outside the scope of Art.9(3) of the Aarhus Convention, and any costs protection could only be considered through an application for a costs protection order.

The judgment can be found by clicking here.

Security for costs under CPR 25. The defendant firm had held $11.m in an escrow account with a third-party bank in relation to the sale of a vessel by the claimant. US sanctions subsequently imposed on the claimant led to the termination of the sale contract. The firm was instructed to return the $11m but the bank refused due the potential violation of the sanctions. The claimant sued for the return of the $11m against the firm which brought an additional claim against the bank alleging breach of contract in failing to comply with its instruction. The firm applied for security for costs of £6m under CPR 25.27. Foxton J dismissed the application.

Whilst there was reason to believe that the claimant would be unable to pay any costs order in the firm’s favour, the evidence that Bank would face real legal jeopardy in making a payment from a bank account within the  jurisdiction to the firm  to discharge a liability due to the firm arising by reason of an order of the court, was thin and unpersuasive.

The judgment can be found by clicking here

Following the dismissal in the Intellectual Property Enterprise Court (IPEC) of a trademark infringement claim against Google,  Shorts applied for a costs-capping order for its appeal under CPR 52.19. Google cross-appealed for £200,000 for security for costs. Lewison LJ held the IPEC had been established to facilitate access to justice by small and medium sized enterprises, and that facilitation of justice was expressed in the rule as a need. That tipped the balance. The recoverable costs of the appeal and the cross-appeal were limited to £60,000, to be paid as security for costs, since by making the application for a costs capping order, there was reason to believe that Shorts would be unable to pay Google’s costs if the appeal failed.

The judgment can be found by clicking here

To reflect the relative success or failures at trial, the parties contended for issue-based costs orders under CPR 44.2(6((f). Rajah J held that none of the issues upon which one party or another had failed were discrete and could be isolated. The fact that along the way the claimants scored some hits did not detract from the outcome or justify an issue-based order. It followed that the claimants would pay the costs of the applications of all the defendants, except the second. As against him, that the claim had been shorn of the claimant’s other proposed routes to the same result did not justify an issue-based costs order.

For interim payments, they were payable in a sum that erred on the side of caution, so that they would not exceed the costs recovered on an assessment. That was 50% for standard basis costs orders and 60% for indemnity basis, with stays of payment in respect of Georgian based defendants, where there was a risk of irremediable prejudice to the claimant if no stay was granted and the appeal turned out to be successful.

The judgment can be found by clicking here.

In a claim relating to agreements between Lloyds and Accor for the construction and management of a 290 bedroom hotel, it was agreed (Lloyds being in administration) that security for costs should continue to be provided, £2m having already been ordered. Lloyds submitted that £617,336 should be given by an ATE policy. Accor contended for a further £1,162,336. Constable J held that the policy did not provide equal protection as a payment into Court. By reason of the generality of wording, there was (at a minimum) a realistic risk of the insurer properly arguing that as a matter of construction, it would be under no liability in the case of fraud by the Claimant (or its principal or agents) in placing the policy.

In addition, the insurer would not pay any claim under the Endorsement for “Incurred Adverse Costs incurred after the Litigation Funding Agreement has been terminated”, but the LFA Litigation Funding Agreement had not been disclosed. Accor therefore did not know in what circumstances it might be terminated. Lloyds was given 10 days to refine the policy to meet these two areas of concern. Any dispute on the refinements would be dealt with by way of written submissions. The total security to be provided was £882,336.

The judgment can be found by clicking here.

The CAT (Roth J acting President) approved the settlement agreement reached between Mastercard and class representative (CR), and opposed by the litigation funder (LF), which argued that the £200m payment was too low. Of that sum, £100m was ringfenced for class members, who had six months to claim from the claims administrator. Of the other £100m, £45,567,946.28 was ringfenced as a minimum return to the LF with the remaining £54,432,053.72 available to give the LF its return, subject to any further sums that needed to be distributed if take-up exceeded 5%.

Certain of the LF’s costs and the CR’s costs needed to be assessed and a report as to their reasonableness would be undertaken by an independent costs expert on a solicitor and own client basis together with the fees of the experts. The CAT would then determine the costs in the light of the report.

The judgment can be found by clicking here

The Claimants failed on their substantive contractual case but demonstrated that they were entitled to a restitutionary quantum meruit of US$2m. The Defendants had made a Part 36 offer on 5 May 2023 to pay US$2m plus US$230,000 interest accrued to date. Subsequent determinations made by Simon Gleeson about interest meant that the Claimant had failed to beat the offer albeit by a whisker. There was nothing unjust about the consequences of CPR 36.17(4) applying. The defendant was ordered to pay 50% of the claimant’s costs up to 26 May 2023 being the date of expiry of the relevant period under the rule, with the claimant to pay the defendant’s costs thereafter.

The judgment can be found by clicking here.