CA-2025-000371 - [2025] EWCA Civ 1003

On 15 April 2025 we handed down our judgment dismissing the appeal against the order of Leech J sanctioning the restructuring plan (the “Plan”) in respect of Thames Water Utilities Holdings Limited (the “Plan Company”). We now have to determine the costs of that appeal.

No costs order is sought by or against the third appellant (“Mr Maynard”) or the second respondent (the “Class A AHG”).

The Plan Company contends that it was the successful party on the appeal; that costs should follow the event; and that it is entitled to be paid its costs of the appeal. In recognition, however, of the fact that no costs order is sought against Mr Maynard, and of the fact that the appeal was successful in part (in that we ordered a variation to that part of the Plan releasing claims against the Plan Company’s officers and advisers) the Plan Company seeks recovery of only 80% of its costs. This is sought against the first appellant (“Kington”) and the second appellant (“TWL”) on a joint and several basis. The total costs which the Plan Company incurred on the appeal are approximately £2.26 million. 80% of that figure is approximately £1.81 million, and it seeks an order that 40% of that sum is paid on account (£724,441.08).

Kington contends that it was the successful parties on appeal, and both Kington and TWL seek payment of their costs by the Plan Company. Kington’s costs of the appeal are approximately £1.81 million. It seeks a payment on account of 40% of that sum (£650,966.08). TWL’s costs of the appeal are £895,839.98. It also seeks a payment on account of 40% of that sum (£339,333.45).

Leech J described the amount of the costs of finance and advisers’ fees in connection with the restructuring of Thames Water as “eye-watering”. The same can be said – certainly so far as the Plan Company and Kington are concerned (the Class A AHG’s costs have not been revealed) – of the legal costs of this appeal, which lasted three days and was heard only three weeks after judgment was handed down below. We are not asked to assess any party’s costs, so this point is relevant, so far as the issues before us are concerned, only to the extent that we are asked to order a payment on account of costs.

Costs are in the discretion of the Court: CPR 44.2(1). The general rule is that the unsuccessful party will be ordered to pay the costs of the successful party, but the Court may make a different order: CPR 44.2(2). In deciding what order to make, the Court is to have regard to all the circumstances: CPR 44.2(4), including whether a party has been successful on part of its case, even if that party has not been wholly successful.

The Plan Company’s position is simple: the appeals have been dismissed; as respondent to the appeals it is therefore the successful party and should be entitled to at least most of its costs.

Kington and TWL put their case in two ways. First, the general rule ought not to apply in the case of an appeal from a decision whether to sanction a scheme of arrangement or restructuring plan. Second, if the general rule does apply, then they should be regarded as the successful parties because – although the appeals were dismissed – the Court in substance agreed with their submissions on the legal principles to be applied.