[2025] UKUT 00300 (LC)

I am not satisfied that Mr Nelson has behaved unreasonably.

The Tribunal’s powers are limited to the costs ‘of and incidental to’ the proceedings in the Tribunal, i.e. the reference. It has no power to deal with costs of the abortive mediation because it is confidential, unless the parties agreed that the cost of the mediation would be costs of the reference, which I have not been told they did. In any event, I cannot inquire into, or be told about, what went on in the mediation itself. Agreeing to mediate is not indicative of an unreasonable approach to the reference. What is clear is that the parties did not reach agreement. Nor can the Tribunal award the costs arising out of Mr Nelson’s application to the Court of Appeal, for which the parties must apply to the Court.

In assessing costs under the Electricity Act, I must proceed in accordance with s.4 of the Land Compensation Act 1961. SEPD relies upon s.4(1)(a) – that where the [compensating] authority have made an unconditional offer in writing of any sum as compensation to any claimant and the sum awarded by the Tribunal to that claimant does not exceed the sum offered, the Tribunal shall, unless for special reasons it thinks proper not to do so, order the claimant to bear his own costs and to pay the costs of the … authority so far as they were incurred after the offer was made.

The terms of s.4 invited the question: Was SEPD’s offer of 12 May 2025 ‘unconditional’? The terms of the offer were:

“Offer to Settle

1.

Total compensation to you in respect of the grant of a necessary wayleave: £50,000

2.

Payment of your professional fees:

a.

SEPD agrees to make payment of £15,000 in settlement of JLL’s professional fees

b.

For the avoidance of doubt, no part of this offer includes any contribution to or payment of your mediation fees and/or or any additional costs.

3.

Timing of payments: we are holding monies. As such, we will send these upon completion of the settlement agreement.

4.

Equipment: remains in situ on the Property by virtue of the necessary wayleave dated 7 July 2023

5.

Consent order withdrawing the Claim: Within 2 working days of acceptance of the offer, the parties shall enter into a consent order, in the form already drafted and ready for signature, detailing agreed compensation and payment of professional fees and the claim shall be withdrawn and CMS shall file that signed consent order with the Tribunal.”

The offer was said to be strictly time bound, and

“must be accepted no later than 3pm on Friday 16 May 2025, and that a settlement agreement documenting the offer must complete by 3pm on Friday 23 May 2025. As you are aware a settlement agreement is already in final form and so we anticipate making only minor amendments to this to reflect the change in the terms of this offer”

That offer of compensation was not unconditional. It was conditional first on Mr Nelson accepting £15,000 as a contribution towards his costs, rather than having them assessed by the Tribunal or paid in full. Secondly, it was conditional upon Mr Nelson signing a settlement agreement, the terms of which I do not know. Accordingly, it was not an offer which engages the consequences of s.4 of the 1961 Act.

The offer is not, however, irrelevant. On the contrary it is highly relevant but not because it compels the Tribunal to act in accordance with s.4. As the Tribunal’s Practice Directions explain (para 25.10), in assessing costs the Tribunal will have regard to admissible offers to settle. The offer was in excess of my award of compensation by £2,750 or 6%. Accordingly, Mr Nelson must pay the costs of SEPD in so far as they were incurred after a reasonable time had elapsed for consideration of the offer. Given the proximity of the hearing, in my judgment a reasonable time for Mr Nelson to consider the offer and decide whether to accept it was seven days and expired on 19 May. Mr Nelson is not entitled to his own costs after that date, and must pay SEPD’s.

Mr Nelson has provided a helpful time sheet. Of the 232.5 hours claimed for, 39.5 hours were for sending emails to the Tribunal and to CMS during the period between 18 October 2024 and 9 February 2025. They are claimable.

There is then a list of time spent on emails between 4 April 2025 and 10 July 2025. I allow from 4 April until 19 May, inclusive, which I calculate to be 41 hours.

There is then a global entry, said to be between 4 April and 12 June 2025, for time spent on ‘preparation for hearing, reading, filing, submissions, site visit/hearing’. This is not broken down by dates, but is said to be 132 hours in total. While the number of hours spent per day may well have increased as the hearing of 11 June became closer, in the absence of anything to the contrary I have divided this period pro-rata between 4 April and 19 May, which is claimable, and between 20 May and 12 June, which is not. This adds 86 hours of claimable time, bringing the total claimable hours to 167. I am satisfied that Mr Nelson did spend that time on preparing the case and that it was reasonable for him to do so.

As I confirmed in Golf Café Bars (at [8])the Litigants in Person (Costs and Expenses) Act 1975 applies to proceedings before the Upper Tribunal (section 1(1)(ba)) and it enables a litigant in person to recover sums in respect of any work done, and any expenses and losses incurred, by the litigant in or in connection with the proceedings to which the order relates. It permits a sum to be allowed in respect of any work done by a litigant in person in connection with the proceedings, whether or not they caused the litigant in person any pecuniary loss (see, for example, paragraph 22.2 of the Senior Courts Costs Office Guide).

In the civil courts, where a litigant in person has not proved that they have suffered loss as a result of the work they have done in the proceedings, such as having to take time off work unpaid, CPR 46.5(4)(b) (and the Practice Direction which supplements it) allows an amount to be awarded for the time reasonably spent on doing the work, limited to £19 per hour. It is appropriate for the Tribunal to adopt the same approach. Accordingly, I award 167 hours at £19 per hour, viz. £3,173.

There is no dispute over Mr Davies’ fees, at £21,850, which were incurred in full before 19 May, and are claimable.

As for disbursements, travel and accommodation, at £350 (which I assume was for the hearing, if it was connected with the mediation then I would not allow for the reasons given above) is not claimable as it post-dates 19 May. I allow the remaining £426.50 said to be for disbursements/printing/photocopying. SEPD prepared the bundle, but I assume the remaining costs were incurred when the reference was made, and shortly afterwards.

I therefore allow Mr Nelson’s costs up to 19 May, which I assess at £25,449.40. In addition, Mr Nelson is entitled to claim the reference fee of £275 which he paid in December 2023, and I therefore determine that SEPD shall pay Mr Nelson’s costs at £25,724.50, plus VAT on Mr Davies’s fees if Mr Nelson is not able to reclaim that.

These are claimable after 19 May 2025 to the extent they were reasonably incurred and reasonable in amount. CMS for SEPD have provided a helpful costs breakdown from 19 May. There are three elements to this: CMS’s costs, Mr Church’s firm’s costs, and counsel’s fees.

First, CMS’s fees. From and including 20 May 2025 these total £29,474.30, of which £21,752.20 were incurred up to the publication of the compensation decision; the remainder were in respect of submissions on costs.

CMS’s fees cover activity by four fee earners, ranging from a partner charging £365 per hour to a trainee at £110 per hour, plus an outdoor clerk at £220 per hour. In my judgment this relatively simple, albeit time-consuming matter, did not warrant that level of resource. For instance, it was not necessary for SEPD to be represented at the hearing by both a partner and a Grade A solicitor. On the basis of the information provided, and without carrying out a detailed assessment, I reduce the amount claimable from £21,752.20 to £15,000.

The remaining £7,722.10 is in respect of costs submissions. The respondent is being awarded less than half of the amount claimed in costs. It is therefore appropriate to reduce the amount claimable on the costs submissions themselves. I allow £3,000.

Accordingly, I allow £18,000 in respect of CMS’s fees.

Secondly, as regards their expert’s fees, a helpful timesheet has been submitted which outlines the fees of Mr Church, a senior director, at £250 per hour, and his colleague Mr William Gullett, a senior surveyor, at £185 per hour. Of the total of £15,502.50 outlined, SEPD claims £12,500. The fees incurred after 19 May 2025 total £10,540, comprising fees of both Mr Church and Mr Gullett. Some of Mr Gullett’s fees in assisting Mr Church are reasonable, for instance ‘PP1-PP2 research and note to HC’; it would have been more cost effective for a senior surveyor to carry out this work than a senior director.

However, I disallow two sets of fees incurred in Mr Gullett’s work. Given Mr Church’s experience, he could have more attended the site visit alone, and given that the respondent was represented at the hearing by counsel, with solicitors present, it is not reasonable to claim £1,387.50 for Mr Gullett sitting in the back of the court. Of the £10,540, I disallow £1,202.50 for Mr Gullett attending the site visit, and £1,387.50 for his presence at the hearing. Accordingly, I allow £7,950 for SEPD’s experts from 19 May 2025.

Finally, counsel’s fees for the hearing were £22,000 (in addition to £9,875 for advice/conference). Ms Chorfi, called in 2008, is a senior junior in a leading set of specialist property chambers. This was a modest claim which could reasonably have been defended by less experienced counsel, and I allow £15,000 for counsel’s fees.

I therefore direct that Mr Nelson shall pay £40,950 of SEPD’s costs.

In summary, therefore, I direct that SEPD shall pay Mr Nelson’s costs of £25,724.50 plus VAT on Mr Davies’s fees if appropriate and if Mr Nelson is not VAT-registered and unable to reclaim them.

Mr Nelson shall pay SEPD’s costs of £40,950 of SEPD’s costs.

The net effect shall depend on whether Mr Nelson can reclaim VAT on Mr Davies’s fees, if charged. In accordance with s.4(5) of the 1961 Act, the appropriate net amount may be deducted from the compensation payable.

In addition, Mr Nelson shall be responsible for the Tribunal’s hearing fee of £624.00, since this was incurred after 19 May 2025.