HT-2021-000363 - [2025] EWHC 998 (TCC)

Payment on account of costs

The Claimant’s costs total approximately £45.3 million. The Claimant seeks a payment on account of its costs. It is agreed for the purposes of the interim payment analysis that just over £2.7 million approximately is already the subject of other cost awards made earlier in the proceedings. That leaves a balance of approximately £42.5 million. The Claimant seeks an on account payment of 55%, a sum of just over £23 million.

The Defendants accept that the Claimant is entitled to a reasonable amount as a payment on account but submits that the amount is excessive and should be in the region of £17 million:

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.

Where the amount of costs is to be assessed on the standard basis:

In assessing the reasonableness of the incidence and amount of the costs incurred, the Court will have regard to all the circumstances, including the conduct of the parties, the value of the claim, the importance of the matter to the parties, the complexity of the issue, and the skill, time and effort spent on the litigation: CPR 44.4.

The court has discretion as to the amount of any order on account of costs. What amounts to a reasonable sum will depend on all the circumstances of the case, taking into account factors such as those identified in Excalibur Ventures v Texas Keystone [2015] EWHC 566 per Clarke LJ:

“[23] What is a reasonable amount will depend on the circumstances, the chief of which is that there will, by definition, have been no detailed assessment and thus an element of uncertainty, the extent of which may differ widely from case to case as to what will be allowed on detailed assessment. Any sum will have to be an estimate. A reasonable sum would often be one that was an estimate of the likely level of recovery subject, as the costs claimants accept, to an appropriate margin to allow for error in the estimation. This can be done 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.

[24] In determining whether to order any payment and its amount, account needs to be taken of all relevant factors including the likelihood (if it can be assessed) of the claimants being awarded the costs that they seek or a lesser and if so what proportion of them; the difficulty, if any, that may be faced in recovering those costs; the likelihood of a successful appeal; the means of the parties; the imminence of any assessment; any relevant delay and whether the paying party will have any difficulty in recovery in the case of any overpayment.”

In this case, there has been no costs budgeting and the seven-page costs summary prepared by Mr Pantlin contains a very high-level overview of the general categories and amounts incurred. The criticism made by the Defendants is justified. I do not accept the Defendants’ suggestion that £6.1 million should be assumed to be the irrecoverable costs in respect of the failed claims against the Third, Fourth and Fifth Defendants; as I stated above, I consider such costs to be minimal as a proportion of the overall costs. However, at least some of the other points which the Defendants indicate they would wish to challenge are likely to result in material reductions to the recoverable costs following a detailed assessment.

The recoverable costs on a detailed assessment will result in a substantial sum due to the Claimant. Having regard to the size, complexity and duration of the litigation, and the vast amounts of documentary, factual and expert evidence deployed in a ten-week trial, the overall figures identified do not appear to be disproportionate to the claims. The paucity of information available to the Court at this stage indicates that a cautious approach should be taken to a broad-brush assessment of the likely level of recovery of these costs.

Taking the above matters into account, I consider that a reasonable sum on account of costs is £20 million.