PT-2023-BRS-000112 - [2025] EWHC 2829 (Ch)

Under CPR rule 44.2(8), since I have made an order for costs to be subject to detailed assessment if not agreed, I must also make an order for an interim payment on account of such costs, unless there is a good reason not to do so. In Learning Curve (NE) Group Ltd v Lewis [2025] EWHC 2491 (Comm). HHJ Russen KC, sitting as a judge of the High Court, said:

“59.

I recognise that, where the receiving party has an approved costs budget, the court now routinely fixes a payment on account by reference to 90% of the agreed and/or approved budgeted sum (and, as the level of incurred costs generally feeds into any agreement upon or approval of the budgeted costs, I think usually without any real distinction being drawn between the incurred and budgeted elements of the total sum): see, e.g. Thomas Pink Ltd v Victoria's Secret UK Ltd [2014] EWHC 3258 (Ch); [2015] 3 Costs LR 463, at [60], per Birss J; MacInnes v Gross [2017] EWHC 127 (QB); [2017] 4 WLR 497, at [28], per Coulson J; and Sheeran v Chokri [2022] EWHC 1528 (Ch), at [41], per Zacaroli J. However, those cases concerned costs which were to be assessed on the standard basis. It is because CPR 3.18 provides that, when assessing costs on the standard basis, the court will not depart from the approved or agreed budgeted costs unless there is good reason to do so that the practice has been adopted of taking a high percentage of the receiving party's budgeted costs for the purpose of fixing the payment on account. CPR 3.18 provides reasonable confidence that a figure in the region of 90% of the budget is unlikely to amount to an overpayment and should for that purpose be treated as reflecting the payee's likely irreducible minimum entitlement.

60.

In this case, and in the absence of agreement upon the recoverable amount, a significant part of the claimant's costs will be assessed on the indemnity basis and CPR 3.18 will not apply to those costs. As Coulson LJ observed in Burgess v Lejonvarn [2020] EWCA Civ 114; [2020] 4 WLR 43, at [89]–[93], if there is an order for indemnity costs, then prima facie any approved budget becomes irrelevant. It follows that the reasoning underpinning the approach to a payment on account, which is illustrated by the three cases mentioned above, does not apply to the significant element of the claimant's costs covered by the award of indemnity costs, whether or not they are included in a presently approved budget.”

Since I have ordered the first defendant to pay the claimant’s costs on the indemnity basis, the same reasoning applies to the present case. The originally approved costs budget of the claimant was varied by DJ Markland in August 2025 to a total of £109,133.50, excluding VAT (of which £27,173.50 were incurred costs, and £81,960 were estimated costs). The claimant acknowledges that this budget will include costs which have not been incurred, such as the second day of the trial and disbursements from mediation. But there are also other costs incurred by the claimant which are not included. She estimates that her total costs incurred are approximately £155,000. In all the circumstances, I will order a payment on account of £109,000 by 4 PM on 17 November 2025.