BL-2022-MAN-000036 - [2025] EWHC 2084 (Ch)

I have borne both counsel’s submissions firmly in mind.

Any award of litigation costs requires a judicial evaluation of the particular facts of the case, followed by a principled exercise of judicial discretion. Each case is inevitably fact-sensitive. Nevertheless, there should be an acceptable degree of consistency of approach, with like cases being treated alike.

Mr Wilton is right to draw the court’s attention to the court’s recent decision in Bellhouse v Zurich Insurance Plc [2025] EWHC 1551 (Comm). The substantive hearing in that case concerned the claimants’ application to strike out, and for summary judgment on, substantial parts of Zurich’s defence to a claim on the claimants’ household insurance policy. As the court explained (at paragraph 6 of its consequentials judgment), the court had spent a full day hearing that application. Apart from one aspect of one part of Zurich’s defence, the court had refused to strike out the other challenged parts of Zurich’s pleadings, or to enter summary judgment for the claimants on those parts of Zurich’s defence. But it only refused to do so because it afforded Zurich the opportunity to address, and correct, what the court had found to be serious deficiencies in the way that, up until then, Zurich had pleaded its case. Before the hearing of the application, Zurich had refused, not only to correct, but even to acknowledge, any of those deficiencies. Whatever the precise form that Zurich’s further particulars might thereafter take, the court considered it appropriate to grasp the nettle of determining the incidence, and the quantum, of the costs the parties had incurred in arriving at the position that court had reached. That was that Zurich had been required to supply further particulars of its defence, as the price of avoiding the striking out of, and the entry of summary judgment against it on, the challenged elements of its pleaded defence. At paragraph 19 of the court’s consequentials judgment, the court held that the successful parties to the application were the claimants, and not Zurich. Although the court had not struck out the majority of Zurich’s challenged pleadings, nor had it entered summary judgment against it, that was only because the court had ordered Zurich to remedy the clear deficiencies in its pleaded case. That was not something that Zurich had ever previously recognised was necessary. For those reasons, the court concluded that Zurich had been the losing party; and it was therefore ordered to pay the claimants’ costs. I accept Mr Wilton’s submission that the overall incidence of costs in that case supports Vincents’ overall submission that where a party’s case is fundamentally deficient, it should expect to pay the costs of any application for strike out, or summary judgment, in circumstances where the claim is only allowed to proceed because of a comprehensive amendment, which the court finds to be necessary in order for the respondent to advance a viable claim.

In my judgment, and for the reasons that Mr Wilton has given in relation to Vincents’ application, and its first hearing, I find that the position is the same in the present case. I agree with Mr Wilton that Vincents’ application to strike out, or summarily determine, the claim would have succeeded had the remaining claimants not produced wholesale amendments to their claim. Where, as here, it is clear that such an application would have succeeded, absent such amendments, the starting point should be that costs are to be paid by the respondent, since it follows that the case was fundamentally defective, and would have been dismissed but for the amendments. If the claim was to survive, then it required comprehensive amendment. The amended particulars of claim amount to a comprehensive reformulation of the case, with numerous additions, and detailed and lengthy appendices. Whilst, at the first hearing, and in response to questions from the court, the claimants made it clear, in oral submissions, that they would amend if they needed to, they did not accept that their case was fundamentally defective. They had filed a skeleton argument, and witness evidence, contending for the dismissal of Vincents’ application (with indemnity costs). In Mr Wilton’s language, that reflected the “unyielding stance” that the claimants had taken in pre-application correspondence. Nor had the claimants formulated any draft amended pleading before the first hearing, so there was no alternative but for Vincents to argue out the issues. In my judgment, none of Mr Scher’s counter-submissions satisfactorily address, or answer, the fundamental reality that it is Vincents, and not the claimants, who were the successful party at the first hearing. As such, they should be entitled to recover their costs from the remaining claimants.

I consider that there is no force in Mr Scher’s submission that the amendments are in no way remotely helpful to Vincents; that the process of refinement has led to Vincents now facing a stronger claim; and that Vincents is now in a worse position than it was before it made its application. Even if Vincents’ application was a “strategic blunder” on its part, as Mr Scher claims, the fact remains that the application was merited on the basis of the claimants’ pleadings as they then stood. Absent wholesale amendments to the claimants’ case, the application would have succeeded. It should not have been necessary for Vincents’ to, in effect, precipitate any strengthening of the claimants’ case. That case should have been advanced from the outset.

I agree with Mr Wilton, on this aspect of the case, that the appropriate order is for the remaining claimants to pay 71% of Vincents’ costs of its application, and of the informal amendment application, up to 22 July 2024 (which is the date 14 days after Vincents’ receipt of the draft amended particulars of claim). That percentage figure appropriately reflects, in round terms, the settlement of certain of the claims after my first judgment had been handed down.

However, I disagree with Mr Wilton about the costs as from 22 July 2024. So far as the incidence of those costs is concerned, I prefer Mr Scher’s submissions. In my judgment, none of Mr Wilton’s counter-submissions satisfactorily address, or answer, the several points made by Mr Scher (as summarised above). I do not agree with Mr Wilton that it was reasonable for Vincents to contest the amendment application in its entirety after 22 July 2024. In my judgment, Vincents should, in furtherance of the overriding objective, have engaged with the remaining claimants over the amendments once they had had the opportunity to consider them. Had they done so, I consider that the second hearing might well have proved unnecessary. Whilst I would not necessarily agree with Mr Scher’s characterisation of Vincents’ conduct of this application as “heavy-handed”, I consider that there is considerable force in many of the points that Mr Scher makes. I acknowledge that the remaining claimants were not entirely successful on the second hearing; but they were substantially so. And the respects in which they were unsuccessful should have been capable of resolution, without the need for a full day’s contested hearing, had Vincents adopted a more constructive approach, consistent with the overriding objective, and their duty (under CPR 1.3) to help the court to further this. In my judgment, the remaining claimants were substantially the successful party after 22 July, and at the second hearing. They should be entitled to recover the substantial part of their costs. I will apply an overall 10% discount to reflect, on the one hand, the remaining claimants’ failure to secure permission for the ‘individual advice’, and one aspect of the nexus, amendments, and, on the other, Vincents’ conduct in refusing to engage over the amendments. The remaining claimants will be entitled to recover 90% of their costs since 22 July 2024.

I turn them to the summary assessment of the parties’ recoverable costs. I summarily assess the costs to be awarded to Vincents up to 22 July 2024 in the total sum sought by Mr Wilton of 71% of £41,850.32. That is £29,713.73 (with no VAT). I am satisfied that the work recorded in Vincents’ two Form N244 statements of costs is both reasonable and proportionate. The hourly rates claimed are well within the applicable guideline rates. The sums claimed are properly recoverable on a standard basis summary assessment.

It is unnecessary for me to address the claimants’ first Form N244 statement of costs. Turning to the remaining claimants’ second N244 statement of costs, I make no deduction for the fact that this runs from 15, rather than 22 July, 2024. It would be neither proportionate, nor cost effective, to require the remaining claimants to prepare or file any revised statement of costs running from this later date. Although slightly in excess of the applicable guideline rates, I am satisfied that the rates actually applied to all the fee-earners are reasonable and proportionate given the nature of this multi-claimant litigation. They are well within the range seen in this court. Subject to two matters, I am satisfied that all items claimed are reasonable and proportionate. The first relates to attendance at the second hearing. At the first hearing, attendance was by one Grade C, and one Grade D, fee earner, charging a combined hourly rate of £350. At the second hearing, attendance was by one Grade A and one Grade B fee earner, charging a combined hourly rate of £570. In my judgment, that was both unreasonable and disproportionate. I propose to allow a combined hourly figure of £400 (based on one Grade B and one Grade D fee earner at £275 and £125 respectively). That results in a reduction of £170 per hour for 8.5 hours which (with VAT) amounts (if my arithmetic is correct) to £1,734. The second matter is counsel’s fee for the second hearing. I appreciate (from Mr Scher’s written submissions on costs) that this has been reduced to £20,000 (plus £4,000 VAT). However, I consider this still to be excessive, particularly when compared with the fee paid to Mr Wilton KC of £12,500 for the second hearing. I would reduce this by £5,000 (plus VAT of £1,000) to a VAT-inclusive figure of £18,000. The total deductions are therefore £7,734. When applied to Mr Scher’s figure of £43,043.40 this produces a figure (again, if my arithmetic is correct) of £35,309.40 (inclusive of VAT). This falls to be reduced by 10%, producing a figure of £31,778.46.

The figure of £29,713.73 payable to Vincents falls to be set-off against the figure of £31,778.46 payable to the remaining claimants. By my calculations, that leaves a net sum due to the remaining claimants of £2,064.73. This should be paid to their solicitors within 14 days, i.e. by 4.00 pm on 20 August 2025. That makes it strictly unnecessary for me consider Mr Scher’s further submission that, should the court choose to make any order for costs against the remaining claimants, it should defer any assessment of Vincents’ costs until 28 days after the handing down of judgment following the substantive trial of this claim, and should not order any payment on account of costs. Had it been necessary for me to do so, I would unhesitatingly have rejected this submission. The summary assessment, and the award, of the costs of interim applications has had the welcome effect (and intended) effect of acting as a restraint upon the initiation, and the pursuit, of unnecessary, and inappropriate, interlocutory applications by introducing the salutary concept into civil litigation of ‘pay-as-you-go’. Mr Scher’s suggestion would run counter to that beneficial philosophy.

For all these reasons, I order Vincents to pay costs assessed (after netting-off) at £2,064.73 to the remaining claimants’ solicitors by 4.00 pm on 20 August 2025. It is, I think, common ground that the remaining claimants must pay Vincents’ costs of and occasioned by the amendments to the particulars of claim. If it is not, then I so hold. I direct that the parties should endeavour to agree, and file, a further costs order to give effect to this costs judgment.

That concludes this written judgment.