Anonymised Summary of Costs Judgment by Judge Bowles (sitting in retirement)
Factual and Procedural Background
This judgment, handed down following a previous judgment dated 12 June 2025 ([2025] EWHC 1413 (Ch)), resolves the incidence and basis of costs arising from a multi-faceted dispute about ownership, occupation and lettings of a residential property (referred throughout as "the Property") located in The City.
The Claimant in the underlying proceedings (hereafter the "Plaintiff") advanced a primary proprietary estoppel claim seeking a substantial beneficial interest in the Property. The court dismissed the Plaintiff's claims in their entirety, declared that the First Defendant was the sole legal and beneficial owner of the Property and determined that the Plaintiff had occupied the Property as a trespasser until he vacated on 30 May 2025. The court also made orders for mesne profits arising from unlawful occupation and directed that the Plaintiff account to the First Defendant for net income from the letting of a self-contained flat within the Property (31A) for a limited period (10 May 2023 to 1 August 2023).
A two-day hearing on 19–20 August 2025 addressed consequential matters following the handed down judgment, chiefly concerned with the precise scope of accounting and the appropriate costs orders. This judgment determines:
- which parties should bear the costs of the claim and counterclaim, and
- whether those costs should be awarded on the standard basis or on the indemnity basis, taking account of pre-litigation conduct, an incident at the Property on 10 June 2023, and the parties' conduct toward mediation and settlement.
Legal Issues Presented
- Which party or parties should bear the costs of the proceedings (incidence of costs), having regard to the outcome at trial and the parties' conduct?
- Whether the successful Defendants' costs should be assessed on the standard basis or on the indemnity basis, given the Plaintiff's conduct and the merits of the claim.
- Whether any conduct by the Defendants (including the events of 10 June 2023 and their approach to mediation and settlement) justifies a deduction, penalty or different incidence of costs (including partial or total disallowance of recoverable costs or reduction in rate of recovery).
Arguments of the Parties
Plaintiff's Arguments (as advanced by Attorney Boyd)
- Submitted that no order as to costs should be made against the Plaintiff (i.e., "no order" on costs).
- Argued that the Defendants' pre-litigation conduct and the events of 10 June 2023 involved misconduct or cutting corners and that this should attract a significant costs penalty (a proposed 50% penalty on recoverable costs).
- Contended that the Defendants' attitude to mediation and their handling of multiple Calderbank offers warranted a further costs deduction (proposed 30%–50%) and could justify an overall order of no costs against the Plaintiff.
- Submitted that the Defendants had failed or refused to mediate and had not engaged appropriately with Calderbank offers, citing authorities that, in his submission, supported costs sanctions for unreasonable conduct in relation to settlement and mediation.
Defendants' Arguments (as advanced by Attorney Haren)
- Submitted that the Defendants (First Defendant and the three other Defendants) defeated the Plaintiff's claims and should recover all their costs.
- Argued that the Plaintiff's case was intrinsically without merit and that his conduct in bringing and conducting the litigation placed the case outside the normal range such that indemnity costs were appropriate.
- Maintained that the Defendants did not unreasonably refuse mediation, that they had actively engaged with ADR proposals at appropriate times, and that there was no proper basis for penalising them for the Plaintiff's unreasonable offers or his conditions for mediation.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002 |
Established that an unreasonable refusal to mediate may justify departing from the usual costs order (i.e., may justify a costs penalty). |
The court relied on Halsey for the general proposition that unreasonable refusals to mediate can attract costs consequences, but emphasised the need to apply that rule contextually rather than mechanically. |
| PGF II SA v OMFS Co Ltd [2014] 1 WLR 1386 (Briggs LJ) |
Endorsed the ADR Handbook approach: failure to respond to a serious request to mediate is normally unreasonable; but the rule is not invariable and is one factor in the overall costs-balancing exercise. |
The court treated PGF II as explaining the correct starting position but rejected a formulaic application. The judge applied PGF II's guidance to find that, on these facts, the Defendants' conduct did not warrant a penalty despite issues about mediation timing. |
| Garritt-Critchley and Others v Ronnan and Solarpower PV Ltd [2025] 3 Costs LR 453 |
Discussion of the merits and possibilities of mediation even in apparently unfavourable circumstances. |
Relied on this authority to show that consideration should be given to the prospects of mediation; nevertheless the court concluded the Defendants' position remained reasonable here. |
| DSN v Blackpool FC [2020] Costs LR 359 (Griffiths J) |
Direction importance: compliance with court directions about ADR can be relevant to costs decisions. |
The court noted the relevance of that decision in assessing compliance with ADR directions (Master McQuail's direction) but found the Defendants' conduct compatible with the direction and not culpable. |
| OMV Petrom SA v Glencore International AG [2017] EWCA Civ 195 (Sir Geoffrey Vos C) |
Emphasised parties' obligation to make reasonable efforts to settle and to respond to offers (context included Part 36 and reasonable engagement with proposals). |
Considered by the court in assessing whether the Defendants had an obligation to treat the Plaintiff's Calderbank offers as a basis for negotiation; the court found the offers were unrealistic and did not require penalising the Defendants for declining to engage further. |
| Kiam v MGN Ltd (No.2) [2002] EWCA Civ 66 |
Suggests that, even outside CPR 36, unreasonable refusal of a reasonable settlement offer might, in rare/extreme circumstances, warrant indemnity costs. |
The court treated Kiam as illustrating the high threshold for penalising a successful party. On these facts the Plaintiff's offers were not comparable to the offers in Kiam and did not justify indemnity costs against the Defendants. |
| Three Rivers District Council v Bank of England [2006] 5 Costs LR 714 |
Guidance on indemnity costs: core criterion is unreasonableness; identifies circumstances likely to justify indemnity costs such as speculative, weak or opportunistic claims. |
The court applied Three Rivers to conclude that the Plaintiff's case fell within categories that could justify indemnity costs: the claim was weak/speculative and carried a high risk of indemnity costs if pursued. |
| Hosking v Apax Partners LLP [2018] 5 Costs LR 1125 |
Identifies litigation used as an "anvil for settlement" — i.e., pursued primarily to extract a settlement rather than to vindicate rights — as a factor pointing to indemnity costs. |
The court invoked Hosking to support the conclusion that the Plaintiff had pursued litigation in part to exert settlement pressure, contributing to the decision to award indemnity costs. |
| Gore v Naheed [2017] 3 Costs LR 509 |
Confirms that Court of Appeal will not lightly interfere with a trial judge's finding that a failure to respond to mediation was not unreasonable. |
The court relied upon Gore to show that the failure to respond to mediation requests is fact-sensitive and that appellate intervention is not automatic; used this to support the conclusion that the Defendants' mediation conduct did not justify a costs penalty. |
Court's Reasoning and Analysis
The court approached the question in structured stages: (i) identify the successful party and the starting point for costs; (ii) consider whether the Plaintiff's partial success on a narrow accounting issue justified any allowance; (iii) assess whether the Defendants' conduct (pre-litigation conduct, the 10 June 2023 incident, and approach to mediation/settlement) warranted any costs penalty; and (iv) decide whether indemnity costs were appropriate given the Plaintiff's conduct and the merits of his claim.
1. Costs follow the event
The judge started from the ordinary principle that costs follow the event. The Plaintiff lost his primary claim (proprietary estoppel) and most of his defences; the First Defendant and the other Defendants succeeded on the principal issues and were therefore the successful parties for costs purposes.
2. The Plaintiff's limited success on the accounting issue
The Plaintiff obtained a very limited victory: a rental account in respect of the self-contained flat for a restricted period (10 May 2023 to 1 August 2023). The court concluded this matter was minor and peripheral to the core proprietary estoppel dispute. The accounting issue formed part of the broader factual matrix and did not significantly add to preparation time or trial length — the judge observed only eight paragraphs in the 333-paragraph handed down judgment were devoted to that issue. Accordingly, no allowance was made in favour of the Plaintiff and no reduction in the Defendants' recoverable costs was warranted on that ground.
3. Events of 10 June 2023 and pre-litigation conduct
The judge reviewed the facts of the June 2023 incident and concluded that the Defendants' conduct on that date was lawful. Although the Defendants' failure to inform the Plaintiff in advance of their visit was ill-advised, that did not justify penalising the Defendants on costs. The judge further found that the Plaintiff's unlawful refusal to allow his mother access to her own home was the proximate trigger for the confrontation and that the June events were not a cause of lost settlement opportunities. The court therefore rejected the submission that the Defendants' pre-litigation conduct should reduce their recoverable costs.
4. Mediation and settlement conduct
The court applied the authorities (notably PGF II, Halsey and related guidance) to assess whether the Defendants had acted unreasonably in relation to mediation and Calderbank/Calderbank-type offers. The judge emphasized that:
- failure to respond to a request to mediate is normally unreasonable but not automatically so; the rule is fact-sensitive;
- a party facing an unfounded claim may reasonably decline to mediate or to treat an offer as a basis for negotiation;
- the Defendants had in fact proposed mediation early and had continued to contemplate mediation after disclosure; the Plaintiff imposed restrictive and, in the judge's view, unreasonable conditions on attendance which undermined the prospect of effective mediation;
- disclosure delays (for which blame was shared but not entirely attributable to the Defendants) left inadequate "space" for a meaningful post-disclosure mediation.
The judge concluded that the Defendants' approach to ADR and settlement was reasonable in the circumstances and that the Plaintiff's Calderbank offers were unrealistic in the context of the merits and value at stake. Refusal to treat those offers as a basis for negotiation did not attract a costs penalty.
5. Whether indemnity costs were appropriate
The court applied principles from Three Rivers and allied authorities in assessing whether the Plaintiff's conduct placed the case outside the normal range such that indemnity costs were appropriate. The judge found:
- the Plaintiff's proprietary estoppel claim was very weak and ultimately failed at trial;
- the pleaded assurances central to the claim were never made; the Plaintiff's evidence as to those assurances was generic, imprecise and, in material respects, untrue;
- the evidence suggested that the Plaintiff had "constructed" or "concocted" key aspects of his case for the purposes of litigation;
- the Plaintiff pursued additional tactical measures (pleading reduced capacity, late committal/contempt applications) that were not prosecuted as genuine issues but, in the judge's view, were used to apply pressure for settlement; and
- the overall conduct pointed to litigation pursued partly as a means of extracting a settlement rather than to vindicate genuinely held rights.
Taking all factors together, and applying the discretionary but fact-sensitive test for indemnity costs, the court concluded that the Plaintiff's conduct was sufficiently outside the norm to justify an order for indemnity costs in respect of the main litigation.
6. Disposition as to scope of indemnity
Although an award of indemnity costs was appropriate for the main litigation, the court distinguished post-judgment conduct and awarded post-judgment costs against the Plaintiff only on the standard basis. The judge explained there was no basis to treat post-judgment conduct as warranting indemnity costs.
Holding and Implications
Holding:
The court ordered that the Plaintiff pay the Defendants' costs of the litigation. The primary costs award was to be assessed and paid on the indemnity basis. Post-judgment costs (i.e., costs incurred after the handed down judgment and in relation to post-judgment matters) were ordered to be paid by the Plaintiff but only on the standard basis.
Implications:
- The direct consequence is that the successful parties (the First Defendant and the other Defendants) are entitled to recover their costs of the litigation from the Plaintiff, largely on the indemnity basis, subject to the narrow exception for post-judgment costs which are to be on the standard basis.
- The court declined to make any deduction in the Defendants' recoverable costs to reflect the Plaintiff's limited success on a narrow accounting issue, concluding that issue was peripheral and had not materially increased costs.
- The court refused to penalise the Defendants for their conduct surrounding the 10 June 2023 incident and for their approach to mediation and settlement, on the facts of this case.
- No new legal principles were established; the decision applies established authorities concerning mediation, settlement conduct and the approach to indemnity costs to the specific facts and conduct of the parties in this litigation.
Note: All personal names and sensitive identifiers in this summary have been anonymised in accordance with the anonymisation protocol provided. The summary is based exclusively on the content of the opinion provided and does not add facts or inferences beyond that text.