Costs Case Law Update – November 2025
Welcome to the Kain Knight Case Law Update for November 2025, written by Colin Campbell.
This month’s review features significant rulings on costs across various domains, covering everything from the implications of allegations of dishonesty to orders concerning pro bono representation. We look at cases affirming that allegations of dishonesty can take a case ‘out of the norm,’ justifying an indemnity basis costs order, which means proportionality is disapplied for detailed assessment, as seen in Malhotra Leisure Ltd v Aviva Insurance Ltd.
Colin also covers the substantial indemnity costs order made in JSC Commercial Bank PrivatBank v Kolomoisky & Ors (Rev1). In the context of access to justice, the court in R. (on the application of Badger Trust) v Natural England refused an application to increase costs caps under the Aarhus Convention, finding it would be objectively unreasonable and a practical disincentive.
Conversely, EJW Builders Ltd v Marshall saw a pro bono costs order of £117,000 made under the Legal Services Act 2007, payable to the Access to Justice Foundation. Procedural issues were also clarified, with Tates (Agents) Ltd v Nicholas holding that a person must be formally added as a party before a wasted costs order under s.51 Senior Courts Act 1981 can be considered.
Finally, the consequentials of the £200 million settlement in Merricks v Mastercard Inc confirmed that the funder’s costs of intervening to oppose the settlement were refused from the settlement pot
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Jon Flowith & Partners v Greaves [2025] EWHC 2738 (Ch) – 22 Oct 2025
A Part 36 offer of £550,000 (inclusive of VAT and interest) was more advantageous than the judgment obtained and CPR 36.17(4) applied. Interest at 10 % above base rate applied to the principal sum (including VAT) from the expiry of the relevant period to judgment.
Interest on costs was fixed at 5 % above base rate, reflecting the timing of the offer and the reasonableness of the defendant’s decision to proceed to trial. No percentage reduction was justified on those costs: although the defendant achieved some reduction in the claim and limited success on its counterclaim, they did not justify any departure from the general rule that costs follow the event.
The judgment can be found on Thomson Reuters™ by clicking here.
R. (on the application of Badger Trust) v Natural England [2025] EWHC 2761 (Admin) – 28 October 2025
In a judicial review claim “…about badgers” and the defendant’s decision to issue or renew badger cull licences, Fordham J determined whether redaction of certain documents was justified and whether costs caps in place under the Aarhus Convention 2001 should be varied.
The defendant sought to increase the caps under CPR 46.27 to £30,000 and £20,000 for the first and second claimants respectively. The judge considered the two limbs which existed in deciding whether the proceedings would be prohibitively expensive without a costs cap.
He concluded that any increase in the costs caps would be objectively unreasonable. Their purpose was to provide a degree of appropriate prospective reassurance and the sort of exercise which had been conducted, including spiralling costs from satellite litigation, introducing uncertainty and costs risk, would clearly stand as a practical disincentive, so the application was refused.
The judgment can be found on Thomson Reuters™ by clicking here.
Merricks v Mastercard Inc [2025] CAT 69 – 31 October 2025
Sir Peter Roth dealt with consequentials following approval of the settlement for £200m. In issue was how the settlement pot should be distributed between class members, Innsworth the funder, legal costs, and the destination of any unclaimed funds. The judge refused Innsworth’s application that its costs of intervening to oppose the settlement, should be paid out of the settlement pot.
There was a clear distinction between Innsworth (1) taking independent advice regarding a proposed settlement and/or the prospects of the litigation going forward, and (2 ) intervening to oppose an application made by the Class Representative. Innsworth’s intervention was not made to assist the Settling Parties in satisfying the Tribunal that the arrangements proposed were reasonable, but was a determined attempt to defeat the settlement proposal, including the amount of the return that would be paid to Innsworth.
As to the various solicitor-client costs to be paid or reimbursed out of the Settlement Sum, this was limited to reasonable costs, any assessment to be conducted by an expert assessor without points of dispute, and with his report to be submitted to the tribunal upon which submissions could then be made.
The judgment can be found on Thomson Reuters™ by clicking here.
Kaur v Kaur & Ors (Re the Estate of Raj Kaur) [2025] EWHC 2806 (Ch) – 3 November 2025
In an action involving 10 children of a family in relation to the will of their late mother, one son (SS) had been a defendant and was subsequently joined as a claimant. Later, by e-mail he indicated that he was “resigning from the case. Simon Gleeson considered the consequences, observing that CPR r. 38.2 (2) provides that where there is more than one claimant, a claimant may not discontinue unless every other claimant consents in writing or the court gives permission : neither of those conditions had been satisfied. It followed that on the first day of trial, SS was still a party to the action as a claimant, despite the fact (according to the judge) that he probably believed that he was not.
In these circumstances, the judge was prepared to treat him as having ceased to be a claimant as of the first day of the trial, with representations as to whether SS should pay the costs upon discontinuance under CPR 38 to be addressed when the question of costs arose for determination.
The judgment can be found by clicking here.
Tates (Agents) Ltd v Nicholas [2025] EWHC 2869 (KB) – 4 November 2025
Two claims, in the County Court for breach of warranty and in the High Court (later transferred to the County Court), involving allegations of harassment and conspiracy, had been joined and case manged together, but were never consolidated nor was the High Court defendant (Mr A) ever added as a defendant to the County Court claim.
At trial, the judge awarded damages of £17,500 and ordered the defendants (including Mr A) to pay the costs on the indemnity basis. On appeal, Sweeting J held that the judge below had been wrong to hold that Mr A had been a party to the litigation throughout.
When the Court considered making a wasted costs order under s.51 Senior Courts Act 1981 against a non-party, that person must first be added as a party. No notice had been given to Mr A of any intention to make him liable for all the costs of the County Court claim. It followed that that costs order was set aside, leaving him (with the other defendant) liable for the costs of the matter in which they were parties, payable on the indemnity basis.
The judgment can be found on Thomson Reuters™ by clicking here.
Malhotra Leisure Ltd v Aviva Insurance Ltd [2025] EWHC 2901 (Comm) – 7 November 2025
On dealing with consequentials, three issues required determination by the court. (1) Whether the Defendant should pay the Claimant’s costs of the proceedings on an indemnity or standard basis; (2) Who should bear the costs of an application for specific disclosure issued by the Defendant on 07 March 2023 (3) What quantum of payment on account should be ordered.
The principal consequence of an indemnity basis order was that it would enable the Claimant to seek to recover costs exceeding the last approved costs budget where the budgeted costs of £546,730.50 had been exceeded by £656,226.59.
Nigel Cooper KC held that allegations of dishonesty took the case out of the norm, justifying indemnity basis costs.
The significance of that was that proportionality was disapplied and the parties’ last approved costs budget would be irrelevant for the purposes of detailed assessment, except for the specific disclosure issue.
There was agreement that if the costs were ordered on the standard basis, a payment on account should be £475,000 : if on the indemnity basis, £600,000.
It followed that the order was made for £600,000.
The judgment can be found on Thomson Reuters™ by clicking here.
EJW Builders Ltd v Marshall [2025] EWHC 2898 (Ch) – 7 November 2025
The court dealt with the costs consequences where the claims had been dismissed, but the defendants had been represented pro bono by solicitors and counsel.
Exercising jurisdiction conferred by the Legal Services Act 2007, a pro bono costs order was made under s.194 that the claimants pay the defendants’ costs in respect of their representation, to the Access to Justice Foundation, those costs to be £117,000 following a summary assessment.
The judgment can be found on Thomson Reuters™ by clicking here.
JSC Commercial Bank PrivatBank v Kolomoisky & Ors (Rev1) [2025] EWHC 2909 (Ch) – 10 November 2025
Trower J gave judgment with indemnity costs for the bank against (1) the Individual Defendants for US$1,911,877,385 (less the real value of Transferred Assets (2) the corporate defendants for compensation for the harm it sustained on the making of specific identified Relevant Drawdowns. An interim payment of £80m (approximately 72% of £110,524,169.99 claimed) under CPR 44.2(8) was too high.
The Bank broke down its costs into monthly figures for profit costs (totalling £65.21 million), counsel’s fees (£13.95 million) and other disbursements (£31.36 million). Hourly rates from 17 August 2017 to 16 July 2025 were – partners: £724 to £1028 , counsel: £645 to £844, senior associates: £533 to 776, junior associates: £380 to £648 : and trainee/ paralegals : £165 to £328 ph.
A significant reduction was made for uncertainty, meaning £76.4m was ordered, with interest at 3% over Bank of England base rate on pre-judgment costs from the date the bank paid its solicitors’ bills, continuing on costs at that rate until three months post judgment, and at 8% thereafter.
Lee v BDB Pitmans LLP [2025] EWHC 2955 (Ch) – 11 November 2025
Following judgment on (1) the first defendant’s application for summary judgment on the Claimants’ claim; (2) the Cs’ application to (i) amend its Particulars of Claim and (ii) substitute the respondent for DI if summary judgment was granted, Caroline Shea KC dealt with consequentials.
Cs’ application to amend, to which D I consented, were to be costs in the case and not the usual order that the amending party pay the consequential costs because (1) there was virtually no wastage or duplication as a result of the new particulars being introduced, and (2) D I had not stated its position on liability earlier in the process.
The costs of the other applications were assessed in the claimants’ favour at £170,000.
Summary assessment was not appropriate because the hearing lasted one and a half days, led to a judgment of thirty pages, with the sum at stake considerably larger than was typically the object of summary assessment.
An interim payment of £120,000 (30% of the claim) was ordered to ensure that the winning party was not kept out of its money for an inordinately long time.
