PT-2022-BRS-000087 - [2025] EWHC 2609 (Ch)

Mr McKean cited Christopher Clarke LJ in Excalibur Ventures v Texas Keystone [2015] EWHC 566 (Comm) at paragraph 23:

Mr McKean submitted that Luke’s budgeted pre-action costs should be removed from the calculation simply because they took no steps pre-issue in breach of the Practice Direction. He wrongly submitted that I had awarded Vivian his costs of the PTR (at which there was the successful application to launch the personality disorder claim), whereas Ms John pointed out that I had ordered Luke to pay the costs of the attendance for hand down of judgment on 28 March 2024 but otherwise ordered the PTR costs to be in the case, and the costs of the amendment to be paid by Vivian in any event.

Mr McKean suggested a figure of 70% as suggested by the executors, and submitted that, because of the prospects of success of Vivian’s intended appeal were so good, 80% would be too high.

Ms John, because time was short at the hearing, referred me to her skeleton argument on the point. So far as the quantum is concerned, she submitted where the costs form part of a costs budget that can properly be regarded as approved, the payment on account should be no less than 90% of that budgeted amount (Cleveland Bridge v Sarens [2018] EWHC 827 (TCC) at paragraph 20). In relation to incurred costs that are not approved costs, the court must determine a reasonable sum by reference to an estimate of the likely level of recovery, subject to an appropriate margin for error: Ibid at paragraph 21.

The sum sought on behalf of Luke was £94,000. Luke’s incurred costs as at the date of the CCMC stood at £21,562.80 (inclusive of VAT) and his onwards costs were budgeted at an additional £86,400 (inclusive of VAT). The sum sought on account amounts to (rounded to the nearest thousand) 90% of the budgeted costs and 75% of the incurred costs. Ms John submitted that 75% is a reasonable level at which to assess the incurred costs in circumstances where the sum incurred at the date of the CCMC on 30 May 2023 (some 10 months post-issue) was relatively modest.

Furthermore, the overall sum is reasonable Ms John submitted bearing in mind the indemnity basis assessment applicable from 06 February 2024. Budgets will have been substantially exceeded on both sides, she said, which is palpably true. There have been a range of unanticipated additional costs that were not budgeted for and which would justify departure from the budget in any event, including the fact that the matter was ultimately listed for six days plus the further consequentials hearing (where four days were budgeted for) and the need for an addendum report from Dr Fawzi and additional statements due to the way that the personality disorder issue developed.

I agree with Ms John and will order the payment on account of costs that she seeks.

Mr Knight sought 70% of the executors’ budgeted costs on account, not least because the estate is illiquid and the administration needs to proceed with pace once probate is granted. In accordance with Clevedon Bridge in which Miss Joanna Smith QC (as she then was) undertook a review of the authorities and specifically relied on MacInnes v Gross [2017] EWHC 127 (QB)), I find that 70% is too low, and so I will award 85%, taking into account both the incurred costs at the time of budgeting (£7,693) and the budgeted costs (£12,585) plus the factors referred to by Ms John (excepting the indemnity costs point).