Summary of Opinion

Factual and Procedural Background

The Claimants obtained a Consent Order dated 5 September 2023 made by Judge Jefferis, which provided that the First Defendant pay the costs of the claim to the date of that order. The Consent Order required the First Defendant, acting as a fiduciary, to provide accounts of his dealings with certain property and funds. Following the Consent Order, the parties engaged in a process of "taking of the Accounts" with contested accounting schedules (referred to in the opinion as Accounts A, B, C and D) and supporting documentation. The First Defendant maintained at various stages that he was owed money on the accounts and provided multiple iterations of accounting schedules (including revised schedules prepared in April 2025). The taking of the Accounts resulted in a finding that the First Defendant was liable to make payments on all of the accounts. The dispute over costs continued, including submissions about mediation attempts, Without Prejudice Save As to Costs (WPSATC) offers, the appropriate basis for assessment of costs, and whether the Claimants or the First Defendant should bear post-Consent Order costs. A disposal hearing occupied multiple days (18 October 2024, 21 May 2025 and 13 June 2025). The court gave a judgment on costs and related procedural directions, including a direction for the parties to file a draft order and timetable for submissions on a payment on account.

Legal Issues Presented

1. Whether the Claimants are the successful parties for the purpose of costs arising from 5 September 2023 (the date of the Consent Order).
2. Whether the court should depart from the general rule that the unsuccessful party pays the successful party's costs (CPR 44.2(2)(a)) having regard to the conduct of the parties and other circumstances (CPR 44.2(4) and (5)).
3. Whether the Claimants' costs should be assessed on the standard basis or on the indemnity basis.
4. Whether a payment on account of costs should be ordered and the timetable for submissions to quantify that payment.

Arguments of the Parties

First Defendant's Arguments

• Costs liability should be determined by reference to the parties' conduct in the lead-up to and during the proceedings.
• The Claimants failed to engage with multiple proposals from the First Defendant for settlement and/or mediation (the First Defendant relied on a schedule of attempts to induce mediation or meetings).
• The Claimants failed to recover more than they had offered in their WPSATC offers, which the First Defendant contended should affect costs outcome.

Claimants' Arguments

• The Claimants were entitled to the accounts required by the Consent Order; requests for meetings were not a substitute for the accounting disclosure ordered.
• The Claimants argued that an appropriate comparison between offers and outcome must exclude costs to compare like with like; on that basis the Claimants showed a substantial level of recovery.
• The Claimants sought an order that costs be assessed on the indemnity basis.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Excelsior Commercial and Industrial Holdings Ltd [2002] EWCA Civ 879	Guidance that an order for costs on the indemnity basis is appropriate where the conduct of the parties or other circumstances take the situation "out of the norm"; judges retain discretion and should not replace rule language with other phrases.	The court cited the authority to explain the limited circumstances in which indemnity costs are appropriate and applied the principle to conclude that, although the costs were disproportionate and the First Defendant's conduct contributed to that disproportionality, the conduct was not sufficiently unreasonable to make the case "out of the norm" and therefore indemnity costs were not justified.

Court's Reasoning and Analysis

The court began with the established discretionary framework: the general rule under CPR 44.2(2)(a) is that the unsuccessful party pays the successful party's costs, but the court may make a different order after having regard to all circumstances (CPR 44.2(4)) including conduct (CPR 44.2(5)).

On the question of success, the court found that the Claimants were successful because the Consent Order produced an order for an account and, ultimately, the taking of the Accounts resulted in the First Defendant being found liable to make payments on all accounts. The court rejected the First Defendant's contention that the Claimants were not the successful party, noting the First Defendant's repeated positions that he was owed money and his revised schedules that asserted substantial amounts owing to him, contrasted with the ultimate finding of liability.

On conduct and attempts at settlement/mediation, the court reviewed the correspondence and proposals relied on by the First Defendant (15 letters/emails identified by the court). The court analysed the nature of the accounting obligation of a fiduciary (requiring clear tabular accounts and supporting documents or explanation) and concluded that the Claimants' insistence on proper accounts before mediation or meetings was reasonable. The court found that many of the First Defendant's early proposals predated the Consent Order and that post-Consent Order disclosure exhibited inadequacies (multiple spreadsheets rather than single clear accounts, incomplete accounts, missing Account D). The First Defendant's solicitors acknowledged efforts to comply but the evidence showed piecemeal and inadequate verification of accounts. The court therefore rejected the submission that the Claimants were intransigent and that that justified depriving them of costs.

Regarding WPSATC offers, the court accepted the Claimants' position that comparisons must exclude costs to compare like with like. The court agreed with the Claimants' analysis that the level of monetary recovery was substantial when costs are excluded. The court also noted that the period of Account A was extended at the hearing, giving the First Defendant credit for additional pre-accounting-period expenditure (about £29,000), which the Claimants could not reasonably have anticipated and therefore could not reasonably have included in settlement offers. The First Defendant made no counter-offers, and the court considered it reasonable for the Claimants to proceed to a disposal hearing.

On the basis for assessment of costs, the court acknowledged that both sides agreed costs were disproportionate to sums at stake and that court time was disproportionate (three days of hearing plus pre-reading). The court identified several aspects of the First Defendant's conduct that primarily caused increased costs: failure to produce clear and complete schedules, piecemeal production of supporting documents, a late hearing application to broaden accounts and adduce further evidence, attempts to reopen previously decided points, and seeking irrelevant documents. Despite this, the court concluded that the misconduct did not reach the threshold of being sufficiently unreasonable or exceptional to justify ordering costs on the indemnity basis. The court relied on the Excelsior authority to explain that indemnity costs are reserved for situations that take the case "out of the norm."

The court therefore ordered that the First Defendant personally pay the Claimants' costs of the claim from 5 September 2023 onwards, except where other costs orders had already been made, and additionally ordered that the First Defendant was not entitled to indemnify himself for those costs from the deceased's estate or other fiduciary funds. The court also ordered a reasonable payment on account of those costs under CPR 44.2(8) and directed the parties to file a draft order and a timetable for submissions and payment on account.

Holding and Implications

Core Ruling: The court ordered that the First Defendant is personally to pay the Claimants' costs of the claim from 5 September 2023 onwards (except to the extent that other costs orders have been made), and the First Defendant is not entitled to indemnify himself in respect of those costs from the deceased's estate or other fiduciary funds.

Implications:

• The Claimants are declared the successful parties for the purposes of costs arising from the Consent Order dated 5 September 2023.
• The court declined to order costs on the indemnity basis despite finding that the overall costs were disproportionate and that the First Defendant's conduct contributed to that disproportionality; the conduct was not found to be sufficiently exceptional ("out of the norm") to justify indemnity costs.
• The court ordered a reasonable payment on account of costs and directed the parties to submit a draft order and a timetable for filing up-to-date costs schedules and submissions on the amount and timing of that payment.
• No new legal principle was established beyond the application of existing costs rules (CPR 44.2) and the Court of Appeal guidance in Excelsior as applied to the facts of this case.

Directions

The parties were directed to file a draft order (agreed if possible) reflecting the judgment and to set out a timetable for:

1. The Claimants to file an up-to-date costs schedule and brief submissions proposing the amount to be ordered as a payment on account of costs and the proposed date for payment.
2. The First Defendant to file submissions as to the amount and date of the payment on account.