KB-2023-003483 - [2025] EWHC 1799 (KB)

CPR 44.2(8) provides that “Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so”.

CPR 44.7 provides in material part that a party must comply with an order for the payment of costs within 14 days of the date of the judgment or order if it states the amount of those costs, unless the court specifies otherwise.

The Claimants contended that there were a series of good reasons not to order a payment on account of costs in this case, namely (i) the fact that they were drawn into this litigation by serious tortious conduct, which has had very serious consequences for the mental and physical health of C1 and C2; (ii) the significant financial difficulties the protracted nature of the litigation has caused them, in particular because of the fact they have had to meet significant costs since December 2024, including £58,185.50 to be paid to D4 (see [3] above); (iii) the delay in enforcing the judgment in [2025] EWHC 912 (KB) against D1 in the United States; and (iv) the additional time they will need to raise further funds.

In my judgment these are good reasons to allow additional time for a payment on account to be made, but not sufficiently good reasons to refuse to order a payment on account at all. As the White Book 2025 explains at paragraph 44.2.12, the purpose of a payment on account is to enable the receiving party to recover part of the expenditure on costs before the possibly protracted process of carrying out detailed assessment: see Days Healthcare UK Ltd v Pihsiang Machinery Manufacturing Co Ltd [2006] EWHC 1444 (QB); [2006] 4 All ER 233 at [4], per Langley J. Here, D3 rightly contended that there is a reason to be concerned that the detailed assessment process in this case will be particularly protracted given the Claimants’ conduct of the litigation to date: see [45] and [55] above. This militates in favour of maintaining the presumption in favour of ordering a payment on account.

As to the amount of any payment on account, D3 accepted that the US lawyers’ fees and the VAT element sought were particularly contentious as far as the Claimants were concerned and so excluded those sums from consideration. D3 posited that a figure consisting of 60% of the remaining costs up to 2 May 2025 and 60% of its costs of the 12 June 2025 hearing was appropriate, bearing in mind that the costs were unbudgeted. The Claimants proposed much lower figures, namely 10% of D3’s total costs.

What is a reasonable figure for a payment on account of costs will depend on the circumstances and will often be one that is “an estimate of the likely level of recovery subject…to an appropriate margin to allow for error in the estimation”. The figure can be calculated by “taking the lowest figure in a likely range or making a deduction from a single estimated figure or perhaps from the lowest figure in the range if the range itself is not very broad”: Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm) at [23].

In my judgment D3’s assessment of what is a reasonable figure for a payment on account in this case is sound and satisfies the approach set out in Excalibur Ventures LLC. D3 has excluded those elements that are likely to lead to the most extensive arguments on detailed assessment, and applied a 40% reduction to the remaining costs which provides adequate scope for reductions to their claimed costs to be made on general principles (given that they were unbudgeted) and/or because some or all the Claimants’ arguments that have been intimated already (see [96] above) succeed. I also bear in mind that payments on account in the region of 90% of costs claimed are often ordered: see, for example, Elphicke v Times Media Ltd [2025] EWHC 1554 (KB) at [46].

I therefore order the Claimants to make payments on account of costs to D3 of (i) £72,805.80, to reflect 60% of D3’s costs up to 2 May 2025 (excluding the US lawyers’ fees and the VAT element); and (ii) and £19,776, to reflect 60% of D3’s costs relating to the 12 June 2025 hearing.

In light of the factors set out at [103] above, I am content to give the Claimants until 4.30 pm on 29 September 2025 to make the payments on account, as they requested.