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Dentons UK And Middle East LLP v Solicitors Regulation Authority Ltd
Smart Summary
Factual and Procedural Background
This is an appeal decision arising from disciplinary proceedings initiated by the Respondent against the Appellant before the Solicitors' Disciplinary Tribunal ("SDT"). The Appellant succeeded in a second appeal to this Court, which allowed the appeal against a decision of Judge Lang, the latter having heard an earlier appeal from the SDT. The Court of Appeal (three-judge bench presided by Judge Bean, Judge Baker and Judge Zacaroli) had previously handed down a substantive judgment allowing the Appellant's appeal ([2026] EWCA Civ 508). This judgment addresses costs of the appeal to Judge Lang and of the further appeal to this Court. The costs of the proceedings before the SDT were agreed to be reserved to the SDT itself.
Legal Issues Presented
- Whether the Respondent, as a regulatory body discharging regulatory functions, should be subject to a costs order in respect of the appeals (i.e. whether the principle in Baxendale-Walker v Law Society prevents a costs order against the Respondent on appeal).
- What proportion of the Appellant's costs of the two appeals is properly payable by the Respondent, and what sum should be ordered on account pending detailed assessment.
Arguments of the Parties
Appellant's Arguments
- The Appellant was substantially successful on the appeals and is entitled to a large proportion of its costs of the appeal to Judge Lang and of the further appeal to this Court.
- The Appellant sought an order for recovery of a percentage of its total costs and for a payment on account.
Respondent's Arguments
- The Respondent contended that, as a regulator discharging public regulatory responsibilities, it should not ordinarily be subject to adverse costs orders in respect of proceedings brought in that regulatory capacity, and that no costs order should be made against it in respect of the appeals.
- The Respondent relied on the reasoning of Lord Phillips CJ in Baxendale-Walker 2 and submitted that the approach in that decision should be adopted on the appeals.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Baxendale-Walker v Law Society [2007] EWCA Civ 233; [2007] 3 All ER 330 ("Baxendale-Walker 1") |
The Court of Appeal held that when the regulator was discharging its regulatory responsibilities an order for costs should not ordinarily be made against it; disciplinary proceedings are brought in the public interest and exposing the regulator to adverse costs risks a chilling effect. |
The Respondent relied on this principle. The Court analysed the decision but concluded that its reasoning does not extend to appeals from the SDT in which the regulator is challenging the SDT's determination. |
| [2007] EWCA Civ 820 ("Baxendale-Walker 2") |
Lord Phillips CJ indicated the same principle applied on an appeal under s.13 of the Solicitors Act 1974; comments were, however, obiter in that context. |
The Respondent relied on Lord Phillips CJ's approach; the Court treated those comments as not binding and noted they were obiter, declining to adopt them as controlling. |
| Bryant and another v Law Society [2007] EWHC 3043 (Admin); [2009] 1 WLR 163 (DC) |
The Divisional Court concluded that the normal CPR costs regime should apply to costs on appeal against SDT decisions. |
The decision was referenced as authority that appeals to the Divisional Court fall within the ordinary costs-shifting regime. |
| Bass and Ward v SRA [2012] EWHC 2457 (Admin) |
Bean J concluded that Baxendale-Walker did not govern the costs of an appeal. |
The Court cited this decision as supporting the proposition that the Baxendale-Walker approach does not determine costs on appeal. |
| Wingate v Solicitors Regulation Authority [2018] 1 W.L.R. 3969 |
The Court of Appeal held that the principle applied before the SDT does not apply on appeal; parties on appeal stand on equal footing and the normal costs-shifting regime applies. |
The Court regarded Wingate as binding and followed it, holding that the Respondent on appeal is more akin to an ordinary litigant and thus subject to ordinary costs principles. |
| Excalibur Ventures LLC v Texas Keystone [2015] EWHC 566 |
Guidance on the court's task when ordering a payment on account: to identify a fair estimate of likely recovery subject to a margin for error. |
The Court applied this approach in fixing a payment on account of the Appellant's costs. |
| [2026] EWCA Civ 508 |
The Court of Appeal's earlier substantive judgment allowing the Appellant's appeal. |
The Court relied on that prior decision in concluding the Appellant was substantially successful and that the SDT decision was quashed and remitted for reconsideration under the correct test. |
Court's Reasoning and Analysis
The Court first determined a fair proportion of costs to award. It concluded that 65% of the Appellant's costs of the appeal to Judge Lang and of the further appeal to this Court appropriately balanced two features: the Appellant was substantially successful overall; but the SDT decision was quashed and remitted to be determined under a different test. The Court then addressed whether the Respondent's regulatory status precluded a costs order. It reviewed the authorities, including Baxendale-Walker 1 and 2, Bryant, Bass and Ward, and Wingate. The Court concluded that the reasoning underpinning Baxendale-Walker 1—which protects a regulator bringing disciplinary proceedings from the chilling effect of adverse costs awards—does not extend to appeals from the SDT. Wingate, as a Court of Appeal decision on this point, is binding and establishes that on appeal the parties stand on equal footing and the normal costs-shifting regime applies. Lord Phillips CJ's comments in Baxendale-Walker 2 were obiter and not controlling. Applying Excalibur, the Court then assessed a fair payment on account: recognising the very high costs incurred by the Appellant relative to the short hearing durations, the Court applied a substantial discount and ordered an interim payment on account rather than immediate recovery of 65% of the itemised costs.
Holding and Implications
HOLDING: The Court ordered that the Respondent pay 65% of the Appellant's costs of the appeal to Judge Lang and of the further appeal to this Court, these costs to be subject to detailed assessment if not agreed. The Court ordered the Respondent to pay £200,000 to the Appellant within 21 days on account of those costs. The costs of the proceedings before the SDT remain reserved to the SDT.
Implications: The direct effect is that the Respondent must make the stated payments to the Appellant and will be liable for 65% of the Appellant's appeal costs subject to assessment. The Court reaffirmed that the protective principle articulated in Baxendale-Walker 1 concerning regulator immunity from adverse costs does not generally apply on appeal; this follows the binding authority of Wingate. The judgment imposes no wider novel precedent beyond applying and following existing authorities on the point.
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