Kerry Underwood


with 6 comments

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.


The Old Test


East Sussex Fire and Rescue Service v Austin [2019] EWHC 1455 (QB) (10 June 2019)

The Queen’s Bench Division of the High Court considered the old proportionality test, that is the one prior to 1 April 2013, which applied to this case as it had commenced before then.

This was an appeal against the decision of the Senior Costs Master and the appeal was dismissed.

The Master had held that:

  • the base fees looked at globally, were not disproportionate;
  • the instruction of leading counsel was reasonable; and
  • leading counsel’s brief fee of £50,000 was reasonable.

The Master held that under the new test the costs claimed “are indeed obviously disproportionate” but that the old test was “rather gentler and more generous.”

The paying party challenged this statement, stating that the factors to be considered under the new test are not materially different from those under the old test.

It is the consequences which have changed.

The global assessment of proportionality is now typically undertaken after, rather than before, the item by item assessment and, therefore, the current regime is indeed tougher than the old one.

This was also the view of the Chancery Division of the High Court in the case of

Malmsten v Bohinc [2019] EWHC 1386 (Ch) (07 June 2019)

decided three days earlier.

Although the proportionality assessment itself is not substantiality different, the new regime is tougher as necessity and reasonableness do not trump proportionality, as they did under the old regime and the guidance given in

 Lownds v Home Office [2002] EWCA Civ 365. 


The New Test


Malmsten v Bohinc [2019] EWHC 1386 (Ch) (07 June 2019)

the Chancery Division of the High Court allowed an appeal in relation to a detailed assessment of costs, reducing the profit costs sum assessed by the Master from £47,500 to £15,000 on the ground of proportionality and held that the Master’s failure to make any deduction to reflect the disproportionality of the costs was an error of law.

The High Court also held that VAT and the costs of drawing up the bill should be excluded when considering proportionality.

It also confirmed that proportionality should be considered at the end of the assessment process, rather than at the start, a point also made in the case of

East Sussex Fire and Rescue Service v Austin [2019] EWHC 1455 (QB) (10 June 2019)

in a judgment delivered three days after this one.

This is believed to be the first time that the High Court on appeal has considered the law in relation to the new test of proportionality, that is the test that has been in since 2013 for cases commenced after April 2013.

The judgment contains a detailed analysis of how the proportionality test should be applied and this is contained at paragraphs 51-58 of the judgment.

“51. The present rules are very different. It is quite clear, from the express wording of CPR 44.3(2)(a) that there may be a reduction in costs on grounds of disproportionality even if those costs were reasonably or necessarily incurred.

52. That, to my mind, inevitably indicates that under the new rules a proportionality assessment must occur at the end of the process, whereas under the old rules it occurred at the beginning. In Lownds, when considering the old rules, Lord Woolf MR said this:

“…In a case where proportionality is likely to be an issue, a preliminary judgment as to the proportionality of the costs as a whole must be made at the outset. This will ensure that the costs judge applies the correct approach to the detailed assessment…Once a decision is reached as to proportionality of costs as a whole, the judge will be able to proceed to consider the costs, item by item, applying the appropriate test to each item.”

Self-evidently that must be right where proportionality determines the approach on a detailed assessment, but does not otherwise affect the outcome of that assessment.

53. It is already clear from Lord Woolf’s analysis in Lowndsthat proportionality is essentially a tool that controls the overallbill of costs. That is confirmed by the definition of proportionate in CPR 43.3(5). The five factors listed there are only meaningful when considered in relation to the overall bill of costs, rather than in relation to a specific item of costs. What the new rules require is for the judge, having completed a detailed assessment of costs, to take a step back, look at the assessed bill, and ask whether a further reduction is required on grounds of proportionality.

54. Although I have reached this conclusion on the basis of the wording of the rules, my conclusion is consistent with the views expressed by others extra-judicially. I quote the following passage from Friston, which quotes a speech from Senior Master Gordon-Saker, himself quoting Jackson LJ:

“In the editor’s view, the starting point is a keynote speech given in 2014, in which Senior Master Gordon Saker (speaking extrajudicially) said the following:

“It is said that we will need guidance on how to apply the new test. I disagree. The guidance is already there. It is likely that somebody will in some case or other seek to appeal the approach that has been taken. But I would suggest that there is no reason to suppose that the court hearing the appeal will do other than restate the guidance that has already been given by Jackson LJ in his final report.

“…I propose that in an assessment of costs on the standard basis, proportionality should prevail over reasonableness and the proportionality test should be applied on a global basis. The court should first make an assessment of reasonable costs, having regard to the individual items in the bill, the time reasonably spent on those items and the other factors listed in CPR 44.5(3). The court should then stand back and consider whether the total figure is proportionate. If the total figure is not proportionate, the court should make an appropriate reduction. There is already a precedent for this approach in relation to the assessment of legal aid costs in criminal proceedings: see R v. Supreme Court Taxing Office, ex parte John Singh and Co [1997] 1 Costs LR 49.”

In the 15th implementation lecture on 29 May 2012 – the lecture entitled “Proportionate Costs” – Lord Neuberger, then MR, quoted that passage and said that it seems likely that the courts will develop the approach to proportionality “as Sir Rupert described it” in that paragraph.”

Thus, if Master Gordon-Saker is right, it would seem that proportionality will now revive “the Singh adjustment”. This is noteworthy, because this was precisely the test that was urged upon the Court of Appeal by the paying party in Lownds more than 15 years ago.”

55. My conclusion is also consistent with the notes in the 2019 edition of Civil Procedure, which says this at [44.3.3]:

“As yet no guidance has been provided by the Court of Appeal as to how the test of proportionality introduced on 1 April 2014 by [CPR 44.3(2) and (5)] should be applied. The general practice on detailed assessment is to consider the reasonableness of each item that has been challenged and then to consider whether the total sum that would be allowed on that basis is proportionate or not. If it is not proportionate, the court will then reduce the total figure to a sum which is proportionate.”

56. The new rules accordingly replace the ex ante Lowndstest, with a new ex post test. Costs are assessed according to a reasonableness standard (see CPR 44.3(1): “the court will not…allow costs which have been unreasonably incurred or are unreasonable in amount”), with the final costs assessment then being subject to the proportionality test.

57. It would seem that the distinction between “reasonable” costs and “necessary” costs – intrinsic to the Lownds test – has been eliminated, given that CPR 44.3(1) refers only to costs “unreasonably” incurred or “unreasonable” in amount. The reference, in CPR 44.3(2)(a), to costs “reasonably or necessarily incurred” does not preserve the Lownds distinction, but simply makes clear that even costs necessarily incurred are subject to the overriding criterion of proportionality.

58. The approach that I have described will work equally well in the case of a summary assessment, albeit that there is, in the case of such assessment, no item-by-item consideration of costs.

(ii) When considering proportionality, is it appropriate to exclude VAT and the costs of drawing the bill?”

The court also held that it was in a position to effect a proportionality analysis without remitting the question of costs to another Costs Judge:

“This is because such an exercise does not involve, as I have explained, an item-by-item assessment, but rather taking a step back and asking whether, in light of the various factors that go to proportionality, the sum of £47,500 ought to be reduced on the grounds of proportionality. I consider that I can carry out such a proportionality assessment despite the presence, in the figure of £47,500, of costs that should not be recoverable at all.” 

The High Court reduced the costs, on proportionality grounds, from £47,500 to £15,000.


Written by kerryunderwood

July 3, 2019 at 8:34 am

Posted in Uncategorized


leave a comment »

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.


Knight & Anor v Knight & Ors (Costs) [2019] EWHC 1545 (Ch) (17 June 2019)

the Chancery Division of the High Court held that a purported Part 36 offer which attempted to limit costs was not a valid Part 36 offer.

The court set out the terms of the offer in paragraph 3 of its judgment:

The offer

3.The letter of 27 July 2017 is headed “Part 36 Offer: Without Prejudice Save As to Costs”. The substance of the letter reads as follows:

“Following Monday’s failed mediation (in respect of which privilege is not waived) we are instructed to make the following offer.

The offer is made pursuant to CPR Part 36. As such, if it is not accepted within the relevant period (see below) but is (without having been withdrawn) later accepted then your client will be liable to our clients’ costs. If Administrators succeed in obtaining a greater sum at trial then your clients will be liable to our clients costs on the indemnity basis and with interest thereon at a rate not exceeding 10% above base rate together with the additional sum set out in CPR 36.17(4)(d).

The offer is to pay, from the net proceeds of sale of Close Court, the sum of £35,000. This sum is inclusive of your clients’ costs, which we understand to be under £20,000. The offer also excludes any payment by your client of our clients’ costs, which as you also know are around £30,000.

The remainder of the net proceeds will be paid to our client as the administrators of Steven Knight’s estate.

 Pursuant to CPR Part 36:

  • The relevant period means a period of not less than 21 days from the date of this offer.
  • The offer is made in respect of the whole claim over the net proceeds of Close Court

This offer will remain open until it is expressly withdrawn but the court’s permission will be required to accept it where any of 36.11(3) applies.””

The defendants’ solicitors responded to that letter, also marked “Without Prejudice Save As to Costs” saying that the offer “does not make sense in accordance with Part 36, as it refers to the sum of £35,000 being inclusive of our clients’ costs…”

This exchange took place before proceedings were issued and therefore before the form of the future proceedings, if any, was known, and before it was known who would be the claimant and who would be the defendant.

For example, the claimant could have been a stakeholder under CPR Part 86, brought by the conveyancing solicitors in whose client account the funds were still sitting or, as in fact it turned out to be, a claim brought by one set of claimants to the fund against the other and in those circumstances who was the claimant and who was defendant depended upon who initiated the claim.

At trial the judge decided that the net sale proceeds of £204,000 belonged beneficially to the claimant, who had thus clearly beaten its own offer and the issue now concerned the costs consequences of that set of facts.

The defendants argued that the offer was not a valid Part 36 offer, as it contained terms as to costs.

The defendants relied on the decisions of the Court of Appeal in


Mitchell v James [2004] 1 WLR 158,


French v Groupama Insurance Co Ltd [2011] 4 Costs LO 547, [2012] CP Rep 2 .


In Mitchell the claimants offered to settle proceedings on the basis that each party bear its own costs and the Court of Appeal held that that could not be capable of being a Part 36 offer.

In the French case the defendant relied on offers made before proceedings were issued to cover the entirety of the claimant’s claims, “inclusive of interest and costs”.

The court there also held that such an offer, inclusive of costs, could not be a Part 36 offer.

The claimants held that notwithstanding these authorities a person making a Part 36 offer may still include terms in the offer which limit payment of its own costs by the paying party.

The claimant relied on the decision of the High Court in

Proctor & Gamble Co v Svenska Celluslosa AB SCA [2013] 1 WLR 1464 .

In that case the claimant made a Part 36 offer including the terms that the claimant would be liable for the defendants’ costs up to the date of acceptance and the judge held that it was open to a claimant making a Part 36 offer to agree to forsake its entitlement to costs on acceptance of the offer and instead to pay the defendant its costs, and therefore the claimant’s offer was complied with Part 36.

Here, the High Court held that even if Proctor & Gamble applied on the facts, the court could not follow it as it contradicted the Court of Appeal authority in Mitchell and French and indeed the claimant’s offer here was “ materially indistinguishable” to that in French.

In the Proctor & Gamble case the judge considered the decision of the Court of Appeal in

F & C Alternative Investments (Holdings) Ltd v Barthelemy (No 3) [2013] 1 WLR 548 .

The F&C case involved an offer to settle which had been deliberately and expressly stated to be “outside the terms of Part 36”.

Nevertheless, the successful party sought to apply Part 36 by analogy to get the consequences that flow from a Part 36 offer, and Part 36 itself says that the court must take into account any non-Part 36 offer.

In F & C the Court of Appeal held that there was no reason or justification for extending Part 36 beyond its express ambit and said:

“[63] … in my view it is not permissible wholly to discount a number of failures to comply with the requirements of CPR Part 36 as the merest technicality. Perhaps there can be de minimis errors or obvious slips which mislead no one: but the general rule, in my opinion, is that for an offer to be a Part 36 offer it must strictly comply with the requirements.”

The court when on to say here

“It is, however, to be noted that Mitchell v James was not cited to the Court of Appeal in F & C Alternative Investments nor to Hildyard J in Proctor & Gamble. On the other hand, French v Groupama was briefly discussed, albeit in a different connection, by Davis LJ (at [65]) in the Court of Appeal in F & C Alternative Investments (but was not cited to Hildyard J in Proctor & Gamble).”

In Proctor & Gamble the court said:

“47. In my view, the issue in the F & C case was really whether an offer accepted not to be within Part 36 could be given, by analogy, the same consequences as would have followed if it had been compliant and intended to be so. Here, the issue is whether CPR 36.2(2), and thus the gateway to CPR 36.10 and 36.14, is to be so strictly construed that it requires (by rule 36.2(2)(c)) the offer made to provide for the defendant to be liable for the claimant’s costs even if the claimant expresses his offer to be a Part 36 offer, but as part of that offer, agrees to forsake that entitlement and instead pay the defendant his costs. Put another way, I do not accept that it is impossible for a claimant to comply with Part 36 unless he requires to be paid his costs and such payment to be made within a period of not less than 21 days.

48. As it seems to me, such a strict construction would tend to undermine a central objective of Part 36, identified by Davis LJ himself as being to encourage claimants to make sensible offers and provide an inducement to defendants to accept them lest otherwise they be exposed to the consequences provided. That objective would be advanced, not undermined, by reading CPR36.2(2)(c) as requiring a claimant who seeks his costs to specify a period of not less than 21 days within which the defendant will be liable to pay them, but not as mandating that the claimant must seek costs and make payment of them a condition of his offer.

49. I do not myself see why such a purposive approach to construction should not be available in the context of Part 36, as it is in the context of statutes and contracts and other instruments (subject, of course, to well-known limitations). Nor do I see that such an approach is precluded by the judgment of Davis LJ in F & C: this is not a matter of applying Part 36 by analogy; and the strict compliance required is of the statutory provision properly, and, if appropriate, purposively, construed.”

Here the court said that it understood the court in Proctor & Gamble to be saying that it is still possible to comply with Part 36 by including in the offer a terms as to costs, provided that that term reduced the burden on the paying party that would otherwise be imposed as a consequence of accepting the Part 36 offer, rather than increasing it.

In other words if the person making the offer was giving a concession to the paying party, then that did not invalidate the Part 36 offer.

The court here held that that was an incorrect statement of the law and was inconsistent with the decisions of the Court of Appeal in both the  Mitchell and French cases and “Accordingly, I hold that this offer is not a Part 36 offer, and therefore does not have the costs consequences of such an offer.”

Here, obiter, the court rejected the defendant’s argument that the claimant’s offer was not compliant with Part 36 in any event, because when made, the format of the future proceedings was unknown and it was uncertain whether the party making the offer would be the claimant or defendant.

The court said that once proceedings were issued, then whether a party was the claimant or the defendant would affect the consequences flowing from the offer, as Part 36 provided for different consequences depending on whether the person making the offer was the claimant or the defendant.

The court when on to say, obiter, that had Part 36 applied, then the claimants would have got the costs consequences under CPR 36 as the judgment which the claimants obtained was more advantageous to the claimants than the proposals contained in their offer.

However, the sum of £204,000 being the net proceeds of the sale of the property held by the conveyancing solicitors, was not a “sum of money awarded” in CPR 36.17(4)(a) nor a “sum awarded to the claimant by the court” as per CPR 36.17(4)(d).

Rather, what the court had ordered was that the ownership of an asset belonged to the claimant and this was based on trustee – beneficiary relationship and not a debtor – creditor one.

Consequently, had Part 36 applied, enhanced interest under CPR 36.17(4)(a) would not have been awarded and the additional amount under CPR 36.17(4)(d) would have been calculated by reference to the costs awarded to the claimant, and not by the value of the property of £204,000.

That followed from the terms of CPR 36.17(4)(d) which states in part:

“… an amount which is

(i) the sum awarded to the claimant by the court; or

(ii) where there is no monetary award, the sum awarded to the claimant by the court in respect of costs…”

Thus, here, the court found that there was no “monetary award”.

The court also rejected the claimants’ argument that the defendants’ failure to accept a non-Part 36, but reasonable, offer should mean that the claimants should get indemnity costs as though they had made a valid Part 36 offer.

“31. …A mere failure to accept a reasonable offer is not enough. That happens every day of the week, with both parties acting reasonably and in accordance with the advice that they are receiving from their professional advisers. So if the matter is to be taken “out of the norm” there must be something more, something which prompts the court to visit the paying party with a special mark of condemnation. I see nothing of that kind here. In my judgment it is appropriate to order the defendants to pay the claimant’s costs on the standard basis.”



This decision, correct in every respect in my view, is another illustration of the complexity of Part 36.

It also reinforces the point that part is making and what they think of Part 36 offers should use the standard form N242A and never depart from it.

I see a huge number of apparently Part 36 offers made in emails, which are simply not compliant with Part 36.

When it comes to Part 36, reinventing the wheel is a very dangerous thing to do.

Written by kerryunderwood

July 2, 2019 at 9:15 am

Posted in Uncategorized


leave a comment »

This piece, in slightly different form, first appeared on the Practical Law Dispute Resolution Blog.

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.


Barker v Confiànce Ltd & Ors [2019] EWHC 1401 (Ch) (05 June 2019)

the Chancery Division of the High Court considered the issue of costs orders against parties who are minors and/or their litigation friends, holding that there were no special principles preventing a costs order being made and that the court must consider all of the circumstances of the case.

Here, in a claim involving a number of child claimants, two of the children made an application which was dismissed and the respondents sought costs against the children and/or the litigation friend, who had not given the normal undertaking to pay costs, as required by CPR 21.4(3)(c), if the party is a claimant.

The decision contains a detailed discussion of the law in this area and the court rejected an argument that the litigation friend was only liable to pay costs in cases of gross misconduct.

The case also sets out the considerable duties of a litigation friend, something to which solicitors for litigation friends and their clients often pay scant attention.

The court said that there was a long line of cases, dating back nearly 300 years, which established the practice that in a case of an unsuccessful claim by a child claimant acting by a litigation friend, the usual order is that the litigation friend will be ordered to pay the successful defendant’s costs (Paragraph 26).

In effect, the courts treat the litigation friend as being responsible for the costs which would otherwise be ordered against the child if that party had been an adult.

Section 51 of the Senior Courts Act 1981 is couched in very wide terms and clearly allows this practice to continue to be applied, as does CPR 44.2(4).

The court held that the reasoning in the pre-Senior Courts Act cases remains valid, and that nothing in the Act or the Civil Procedure Rules calls for it to reconsidered.

In spite of the wording of CPR 21.4(3)(c), the court here held that a litigation friend for a defendant could be ordered to pay costs.

On the issue of liability of a litigation friend for costs the court said:

“53. When considering whether to make an order for costs against a litigation friend, who has acted for an unsuccessful child party, the court should apply the general approach that, as regards costs, the litigation friend is expected to be liable for such costs as the relevant party (if they had been an adult) would normally be required to pay. The governing rule is that the court has regard to all the circumstances of the case and it is open to the litigation friend to point to any circumstance as to their involvement in the litigation which might justify making a different order for costs from that which would normally be made against an adult party.”

As to the issue of an order for costs in favour of a litigation friend the court said:

“55. The position appears to be that a child or protected party who acts by a litigation friend and who would, applying the usual principles as to costs, be entitled to an order for costs in his favour, will be entitled to an order which makes the paying party pay the costs incurred by the litigation friend. It is not open to the paying party to say that as the party entitled to recover costs was a child or a protected party, they did not incur any costs because they did not retain the solicitors who were instead retained by the litigation friend.”

The court also said that the practice in a case involving a litigation friend is not to apply the indemnity principle so as to hold that the child has incurred no costs and so is not entitled to recover costs.

The costs incurred by the litigation friend are considered to be the costs of the party.

“Another way of analysing the matter might involve holding that the litigation friend is entitled to an indemnity from the party for whom they were the litigation friend and, in that way, the party does incur the liability for the costs in question.” (Paragraph 99).


Costs Against Children

The court reviewed case law going back to 1725 and concluded that there is no general rule that the court will not make an order for costs against a child unless it has been guilty of fraud or gross misconduct.

Rather, as always, the general rule is that the court must consider all of the circumstances of the case.

Written by kerryunderwood

July 1, 2019 at 8:00 am

Posted in Uncategorized


leave a comment »

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.


XDE v North Middlesex University Hospital Trust [2019] EWHC 1482 (QB) (12 June 2019)

the Queen’s Bench Division held that it was unreasonable for a claimant in a clinical negligence case to switch funding from legal aid to a Conditional Fee Agreement, even where the Simmons v Castle uplift was not in play, and upheld the Master’s decision to disallow recovery of the success fee and after the insurance premium.

Here the legal aid certificate had a costs limit of £55,480 at the prescribed legal aid hourly rates of £70 for a solicitor, £50 for junior counsel and £90 for senior counsel.

The claimant’s solicitors applied for an increase of the total, but that was refused unless and until the solicitors prepared a report dealing with various matters raised by the Legal Services Commission.

The claimants had the legal aid certificate discharged and switched to a Conditional Fee Agreement.

This case differed from ones such as

Surrey v Barnet and Chase Farm Hospitals Trust and others [2018] 1 WLR 5831

in that the Conditional Fee Agreement was entered into in October 2012, that is before the 10% damages uplift was announced in the case of Simmons v Castle, so the loss of that uplift caused by entering into a pre – 1 April 2013 Conditional Fee Agreement, could not be a factor, as it was in Surrey and other cases.

Nevertheless, the switch was held to be unreasonable.

By accepting a legal aid contract the claimant’s solicitors were bound by the rules of the Legal Services Commission and those rules included keeping the case within the legal aid budget and failure to do so did not justify a switch to a Conditional Fee Agreement.

The solicitors also failed to make a properly constituted application in time for an increase in the budget.

Written by kerryunderwood

June 28, 2019 at 8:32 am

Posted in Uncategorized


with 2 comments

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.



Hammond v SIG plc & Subsidiary Companie [2019] EWHC B7 (Costs)

the Master held that where a matter was started in one of the portals and subsequently resolved by the claimant accepting a defendant’s Part 36 offer of £36,500, the claimant was entitled to fixed costs, and not standard basis costs.

Although the decision was only given on 11 June 2019, the hearing took place on 12 March 2019, before the decision in

Ferri v Gill [2019] EWHC 952 (QB) ,

but in a postscript to this judgment, the Master said that his decision was consistent with Ferri v Gill, which had held that the exceptional circumstances provision was a “high bar”.

Here, the claimant had sent a Letter of Claim to the defendant stating that she would not be submitting the claim via the portal, due to its value, but did subsequently submit the claim on the portal at the request of the defendant insurance company.

Liability was not admitted and so the matter exited the portal and the claimant issued Part 7 proceedings and a defence was filed and subsequently the claimant accepted the defendant’s Part 36 offer of £36,500.

The claimant argued that she was entitled to costs on the standard basis as she had started her claim by way of a Letter of Claim and had not started it on the portal, albeit that she had subsequently lodged it on the portal.

In the alternative, the claimant argued exceptional circumstances under CPR 45.29J.

The Master held that a Letter of Claim was not sufficient to start a claim; if that were the case then all claimants could avoid fixed costs by sending a Letter of Claim before submitting the claim on the portal.

In any event fixed costs apply to cases which “no longer continue” in the portal, irrespective of where they started.

The facts did not amount to exceptional circumstances under CPR 45.29J.

Interestingly, both counsel, including the successful counsel Sarah Robson –  an expert in this field – could only trace one case where exceptional circumstances under CPR 45.29J were held to apply, and that was a first instance decision of a District Judge in a claim which had started in the portal, but settled for £350,000.


Please also see my blog –


Written by kerryunderwood

June 27, 2019 at 7:59 am

Posted in Uncategorized


leave a comment »

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.


But Court Of Appeal Suggests Courts And Tribunals (Online Procedure) Bill Is Unlawful


Siddiqui, R (on the application of) v Lord Chancellor and others [2019] EWCA Civ 1040 (10 May 2019)

the Court of Appeal was considering the lawfulness of the change to the Civil Procedure Rules in 2016 which removed the right to an oral hearing for people seeking permission to appeal to the Court of Appeal against a refusal of permission to apply for judicial review.

The procedure now is that when permission is sought from the Court of Appeal to appeal against a refusal of permission to apply for judicial review, the Court of Appeal may refuse leave to appeal on the papers, without the appellant having the right to have that decision reconsidered at an oral hearing.

Here, the Court of Appeal itself conducting an oral hearing in relation to leave to appeal against refusal of permission to apply for judicial review, accepted that there were likely to be some cases in which permission to appeal was refused on the papers, but where permission would have been granted if an oral hearing had taken place and that in some of those cases the appeal would ultimately have been successful.

The issue here was whether the change in the appeals procedure, brought about by an amendment of CPR 52.5, which prevented such cases from proceeding, was incompatible with Article 6 of the European Convention on Human Rights, or with the common law right of access to justice.

The changes were introduced, not because anyone thought there was any merit in them, but rather to reduce the increasing workload of the Court of Appeal which was leading to significant delays in that court.

Here, the Court of Appeal Judge held that those delays caused injustice and therefore a balance had to be struck between the rule change and the need to reduce delays.

The court said that whilst everyone was entitled to a fair trial, including a fair hearing of an appeal, the case law of the European Court of Human Rights showed that this did not mean that an oral hearing was required at every contested stage of civil proceedings.

The court considered that it was a legitimate and proportionate rule change and therefore was not incompatible with Article 6, nor with the common law right of access to justice.

Consequently the judge dismissed the application for leave to appeal to the full Court of Appeal.

Even before 2016 there was not an absolute right to an oral hearing; if, on the papers, the judge had stated the application to be “totally without merit” there was no right to have that refusal reconsidered at an oral hearing.

The new CPR 52.5(1) removed the right to an oral hearing, providing that where an application for permission to appeal is made to the Court of Appeal, the Court of Appeal will determine the application on paper without an oral hearing except as provided for under paragraph (2) which reads:

“(2) The judge considering the application on paper may direct that the application be determined at an oral hearing, and must so direct if the judge is of the opinion that the application cannot be fairly determined on paper without an oral hearing.”

CPR 52.8 provides that if the single judge considers that there is merit in the application that judge, instead of granting permission to appeal, can decide the matter by granting permission to apply for judicial review so that the matter goes to a hearing at first instance, rather than going to a substantive appeal which might then lead to a reference back to the court of first instance.

One of the points made by counsel for the applicant was that the rule change had been made partly because of complaints by users of the Commercial Court in the delay in appeals being heard from that court by the Court of Appeal, and that very many of the litigants in the Commercial Court are foreign, with neither party having any connection with England and Wales.

Consequently applicants for judicial review were being denied justice for the convenience of commercial litigants who have no connection with this jurisdiction.

This is an increasingly important issue, given the fact that the domestic criminal and County Court systems are close to collapse.

Interestingly, given the highly controversial proposal to have lower value claims decided online, currently proceeding through Parliament in the Courts and Tribunals (Online Procedure) Bill, the Court of Appeal here said:

“The position as to an oral hearing at first instance, as it seems to me, is likely to be materially different.”

That comment was not necessary in relation to this case, as there had been a full oral hearing at first instance in the original application for permission to apply for judicial review.

Here, the Court of Appeal had considered the common law right of access to justice and considered the Employment Tribunal fees case of

 R (Unison) v Lord Chancellor [2017] UKSC 51 .

As everyone is entitled to an oral hearing at first instance at present,  the only reason for this statement can be a warning by the Court of Appeal to the government and Parliament that it may well find any restriction on oral hearings at first instance, as proposed in the Courts and Tribunals (Online Procedure) Bill, to be unlawful.

Significantly the court also quoted from

 R (Refugee Legal Centre) v SSHD [2005] 1 WLR 2219 

where the court said that the executive “is not entitled to sacrifice fairness on the altar of speed and convenience, much less of expediency, and whether it has done so is a matter for the courts.”


Watch this space.

Written by kerryunderwood

June 26, 2019 at 10:37 am

Posted in Uncategorized


leave a comment »

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.


Substantial Obstacles To Enforcement Of Costs In Russia Justified Security For Costs


PJSC Tatneft v Bogolyubov and others [2019] EWHC 1400 (Comm) (5 June 2019)

the High Court of Justice Business and Property Courts of England and Wales Commercial Court(QBD) – a snappy title – ordered a claimant company incorporated in the Russian Federation, to provide security for the defendants’ costs under CPR 25.13(2)(a).


The Legal Basis for an Order for Security for Costs


CPR 25.13 provides, in part, as follows:

(1)  The court may make an order for security for costs under rule 25.12 if –

(a)  It is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and

(i)  one or more of the conditions in paragraph (2) applies

(2)  The conditions are –

(a)  the claimant is –

(i)  resident out of the jurisdiction; but

(ii)  not resident in a Brussels Contracting State, a State bound by the Lugano Convention, a State bound by the 2005 Hague Convention or a Regulation State, as defined in section 1(3) of the Civil Jurisdiction and Judgments Act 1982 .”


As Tatneft is a Tatarstan company, Tatarstan being part of the Russian Federation, it was common ground that the condition in 25.13(2)(a) was met.

However, the court’s discretion must be exercised in a manner which is not discriminatory for the purposes of Articles 6 and 14 of the European Convention for the Protection of Human Rights and Fundamental Freedoms – see

Nasser v United Bank of Kuwait [2002] 1 WLR 1868.

The principles were set out in paragraphs 62 – 64 of that judgment, repeated here in paragraph 7.

The evidential threshold in such cases was set out in paragraphs 73, 77, 79 and 86 of the Court of Appeal’s judgment in

Bestfort Developments LLP v Ras Al Khaimah Investment Authority [2016] EWCA Civ 1099 

set out by the court here at paragraph 8.

Detailed guidance as to the jurisdiction to order security for costs was given by the Court of Appeal in

Danilina v Chernukhin [2018] EWHC 39 (Comm)

and the relevant parts of that judgment are set out by the court here at paragraphs 10 and 11 of its judgment.

The judge held that there was a real risk of substantial obstacles to enforcement in Russia satisfying the test in

Nasser v United Bank of Kuwait [2002] 1 WLR 1868.

This was based on:

(i) evidence of recent enforcement rates in Russia;

(ii) the absence of any enforcement treaty between the UK and Russia;

(iii) “a non-fanciful risk” that the issue of “reciprocity” ,the usual basis for enforcement of English judgments in Russia, might not be established in the context of a costs award in this case particularly as no case in which the English courts have enforced a Russian costs-only judgment had been identified;

(iv) a 2004 Russian Federation Information Letter stating that rulings of foreign courts on “interim measures”, such as costs orders, would not be recognised and enforced in Russia;

(v) a “non-fanciful” risk that a Russian enforcement court might apply the public policy exception under Arbitrazh Code, Art. 244(1) in an expansive way;

(vi) sanctions imposed by the Russian government, which contributed to the risk of non-enforcement of a costs order for public policy reasons there being a real risk that the defendant might become subject to sanctions; and

(vii) overall, points (iii) to (vi) each represented a real risk of substantial obstacles to enforcement and, in light of points (i) and (ii), the position was “clear”.

This conclusion conformed with Danilina v Chernukhin [2018] EWHC 39 (Comm).

The judge was not persuaded by the Russian Federation’s attempt to oppose the application, based on CPR 25.13(2)(a)(ii), on the basis that it had assets in Switzerland and Cyprus.

The judge did not accept that, if a non-Convention resident has assets within the CPR 25.13(2)(a) zone, in the absence of lack of probity, no security can be ordered referring to

Texuna International Ltd v Cairn Energy plc [2004] EWHC 1102 (Comm) (paragraphs 27 and 28).

Here, there was a real risk that the assets within the zone would not be available or sufficient, and the judge concluded that, where the Nasser condition was met, the Russian Federation was able to put up security and had not pointed to any possible prejudice; and the defendant would potentially be prejudiced without security, it was just to order security for the entirety of the defendant’s costs.


Security For Costs As Sanction


Alba Exotic Fruit Sh Pk v MSC Mediterranean Shipping Company S.A. [2019] 6 WLUK 77 (Comm) (3 June 2019)

the High Court of Justice Business and Property Courts of England and Wales London Circuit Commercial Court dismissed the defendant’s application to strike out the claim under CPR 3.4(2)(b) or (c),  and dismissed the defendant’s application for security for costs under CPR 25.12, but required the claimant to provide the defendant with security for costs by way of sanction for failing to apply to fix the Case Management Conference for four years and seven months.

Thus the court imposed security for costs as a sanction for a long delay in progressing proceedings, in circumstances where the judge acknowledged that an order for security was not justified under CPR 25.12.

Following service of the defence, the claimant should have applied to the court for a Case Management Conference within 14 days in accordance with Practice Direction 59.7.2.

However, it failed to do so and did not take substantive steps in the proceedings for nearly four years.

Following the claimant’s service of a notice of change of solicitor and an application to amend its Particulars of Claim, the defendant applied to strike out the claim, and for security for costs.

The High Court Judge considered that, although the claimant’s delay applying to fix the Case Management Conference was inordinate and inexcusable, it had not resulted in serious prejudice to the defendant, and did not mean that a fair trial was no longer possible.

The judge therefore refused to strike out the claim as an abuse of process under CPR 3.4(2)(b).

Following the guidance in

Walsham Chalet Park Ltd (t/a Dream Lodge Group) v Tallington Lakes Ltd [2014] EWCA Civ 1607,

regarding the application under CPR 3.4(2)(c), the judge applied CPR 3.9 to decide on a sanction for the claimant’s failure to comply with Practice Direction 59.7.2.

The judge emphasised the need for a proportionate response to the default, considering strike out to be too draconian where the defendant could have applied to fix the Case Management Conference itself, and where he had found that a fair trial was still possible.

Although the risk of the defendant being unable to enforce a costs award against the claimant, an Albanian company, was not sufficiently serious to justify an order for security for costs under CPR 25.12, it was a fair and proportionate sanction to impose for the claimant’s serious default, which had delayed and increased the costs of the litigation.

The judgment contains a detailed analysis of the law in relation to striking out, a sanction that the court declined to impose in this case.

Written by kerryunderwood

June 25, 2019 at 11:39 am

Posted in Uncategorized

%d bloggers like this: