Costs Case Law Update – September 2026
Welcome to the Kain Knight Case Law Update for September 2026, written by Colin Campbell.
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Bidco Limited v Roberts [2026] EWHC 2312 (Comm) - 07 September 2026
By order of a different Judge, HHJ Pearce undertook an Early Neutral Evaluation (ENE) in proceedings in which the Claimants sought damages and injunctive and declaratory relief under a service agreement involving the provision of professional trustee services to pension schemes.
When the ENE proved fruitless, the issue for decision was who should pay the costs. Ordinarily, the order would be costs in the case. However, the ENE was unsuccessful because counsel for the Defendant advanced a previously unheralded argument which necessitated an amendment to its Defence. In these circumstances, it had not been realistic to carry out the ENE and the claimant sought costs on the indemnity basis. That submission failed.
HHJ Pearce held that there was a presumption that costs would be costs in the case in the absence of compelling alternative factors. The court was required to encourage Alternative Dispute Resolution including ENE, and a costs regime which penalised insufficient preparation could create a perverse incentive as to when parties were prepared to participate in ENE. The court could then end up investigating whether the ENE should have taken place at all.
The appropriate order was for the costs of the ENE and of the application for costs itself, to be costs in the case.
You can view the full judgment by clicking here.
Barclays Bank UK Plc & Ors, R (On the Application Of) v Financial Conduct Authority [2026] EWHC 2298 (Admin) - 07 September
Four banks brought Judicial Review proceedings which challenged decisions made by the Financial Ombudsman Service (“FOS”) in respect of the interpretation of its jurisdiction over consumer complaints in decisions which had all been made by ombudsmen in July 2024.
The underlying complaints concerned allegedly unfair credit relationships due to the banks extending unaffordable credit facilities to customers, whether by way of overdraft or credit card, and the FOS’s interpretation of its jurisdiction in relation to those complaints.
On judicial review, the banks succeeded, the court holding that the FOS’s interpretation of its jurisdiction involved a fundamental error of law, and the impugned ombudsman decisions were quashed. In deciding the liability for costs, the banks contended that having succeeded, costs should follow the event. The FOS argued that since it acted as a dispute resolution service operating in the public interest, the court should have regard to the “chilling effect” that costs orders made against public bodies could have.
Dexter Dias J held that he could detect no appreciable or plausible chilling effect on the decisions made by ombudsmen on a daily basis by the making of such costs order against the FOS. On the contrary, costs orders instead would be conducive to good administration and be a salutary reminder about the inadvisability of taking bad or obviously flawed points.
The banks were awarded 100% of their costs subject to assessment, save for Barclays which would be paid 92%.
You can view the full judgment by clicking here.
Turner v Coupland Cavendish Ltd (t/a Gowing Law) [2026] EWCA Civ 1204 - 21 September
The solicitor’s former client brought proceedings under the Solicitors Act 1974 for the assessment of the defendant solicitors’ bill in which he contended that the firm should answer a CPR Part 18 Request about whether a commission had been paid in respect of After-the-Event insurance purchased for him.
An issue was the ability of the client to interrogate the cash account which the solicitors were required to provide in order to comply with CPR 46.10 PD 6.5(b). The claimant contended that a dispute as to the cash account was a matter in dispute in the proceedings and that the Part 18 request was the way to resolve the issue by the solicitors providing an answer as to whether there was a commission which should be disclosed in the account.
Below, the Senior Costs Judge had dismissed the Request, but his decision had been overturned on appeal (see [2025] Costs LR 1401)). Allowing the second appeal, Andrews LJ observed that since the insurance premium was £225, the amount in issue was unlikely to exceed £25. That meant that the claimant never had any real or economic interest in the pursuit of such costly litigation: the only entity which stood to gain were his solicitors. CPR 67.2(1) conferred a power on the court to make an order for the solicitor to deliver a cash account, so the client did not need a detailed assessment to see it.
Where the court was dealing with a detailed assessment under s.70, its task was to resolve how much (if any) money remained due and owing from the solicitor in respect of the solicitor’s recoverable costs. The cash account was something separate from the bill and could not form part of the assessment, and it was no part of the court’s task to certify it. If the client believed that the solicitor had not fully accounted to him, the remedy lay in applying for an account, the procedure by which the court would conduct an inquiry to discover whether a fiduciary had made a profit and, if so, to determine the amount of the profit. What the client could not do was to assert in Solicitors Act assessment proceedings that the cash account was in dispute as a Part 18 question, and then use the answer to discover whether there was any commission paid in the first place.
The Court unanimously allowed the Appeal and restored the decision of the Senior Costs Judge.
You can view the full judgment by clicking here.
R. (on the application of AYA) v Secretary of State for the Home Department (Costs) [2026] EWHC 2411 (Admin) - 21 September
In judicial review proceedings involving a decision taken by the Secretary of State (SoS) to remove the right to request reconsideration of negative trafficking decisions, five Claimants achieved different levels of success. The SoS accepted that she should pay costs but contended for a global costs order of 50% to each Claimant, subject to some carving out for particular issues with two of the claimants.
Sheldon J held that that was too blunt a tool for reflecting the individual circumstances of the various Claimants’ cases. It would be unjust to those Claimants who were more successful than others since they were represented by legal-aid practitioners and the Court was alive to the practicalities of their funding. The making of individualised claims would not be complex for the costs judge on assessment, and an issue-based approach reflected the reality of the way in which the cases were pleaded and argued. There would be unfairness on the SoS to apply a ‘winner (on one ground or in respect of one decision) takes all’ approach.
Accordingly, Sheldon J treated the two parts of the cases (challenge to the Guidance amendment and the individual claims) equally for the purposes of costs, meaning 50% attributable to each. As the Claimants did not succeed fully and the claim review could have been brought by one Claimant, the SoS were ordered to pay 40% rather than 50% of the challenge to the Guidance costs. The remaining 50% for each Claimant was to be individuated to the particular circumstances of each Claimant, save for Claimant AYA who would only be paid the costs of the interim application, having taken no part in the substantive challenge to the amended Guidance.
You can view the full judgment by clicking here.
