DeNovo Legal Costs Newsletter - February 2017

DeNovo - The Legal Costs Experts

Welcome to our Legal Costs Newsletter. We very much look forward to meeting with you and hope that you will consider attending our free costs seminar service which we provide in conjunction with leading costs counsel.


The past few months have seen further downward pressure on claimant costs, with headline decisions on proportionality – in relation to budgeting and assessment – putting the relationship between claim value and costs centre stage.  Those concerned about the compatibility of new look proportionality with the provision of universal and affordable access to quality civil justice will be especially interested to follow the appeal of Master Gordon-Saker’s decision in BNM v MGN, which we understand will be heard this coming autumn.


Funders have featured in two of the more prominent costs cases of the past few months.  We report on successful claims for arbitration funding costs and for indemnity costs against third-party funders.

Costs Budgeting

As we move towards our fourth year of the costs management regime we have been served with several important reminders: (1) the winning litigant’s last approved costs budget is the appropriate starting point for the assessment of the interim payment (MacInnes v Gross); (2) the court may not ‘approve’ costs incurred before the date of any budget – the confusion caused by Lord Justice Sales’ comments in SARPD Oil International has been addressed by the Rules Committee, with the amendment to Practice Direction 3D 7.4 to take effect on 6 April 2017.

Our top picks of recent costs cases are summarised briefly below.  Please follow the links to our full case reports.  Our website ‘News and Views’ page includes reports of further costs cases, updated weekly.  Likewise, please do join our Twitter feed for speedy access to information on developments, rule changes and prominent costs cases as and when judgments become available.

Through our new look Newsletter, News and Twitter feeds, and seminar programme we aim to provide the most comprehensive and up-to-date litigation costs news service.  We would greatly welcome your feedbackshould you wish to see any changes or improvements.

Featured cases and news – our top picks


  • Rezek-Clarke v Moorfields Eye Hospital: ‘Disproportionate’ ATE premium slashed from £31,976.49 to £2,120.

Costs management

  • CPR Amendment to reverse SARPD

The amendment to PD 3D 7.4 comes into force on 6 April: ‘As part of the costs management process the court may not approve costs incurred before the date of any budget. The court may, however, record its comments on those costs and will take those costs into account when considering the reasonableness and proportionality of all subsequent costs.’


  • Litigation funding costs recoverable under Arbitration Act 1996

Essar Oilfields v Norscot Rig Management: the costs of funding obtained to bring an arbitration under the Arbitration Act 1996 are ‘legal or other costs of the parties’ and can be recovered inter partes.

Funders liable for indemnity costs

Excalibur Ventures v Psari Holdings:  funders will ordinarily liable to pay the successful party’s costs on the same basis upon which they have been assessed against the fundee.

Other developments

  • Factual costs information is not given without prejudice

Savings Advice v EDF Energy:  Master Haworth found that factual costs information provided in the context of settlement negotiations (a mediation in this case) can be ‘separated out’ from other information provided without prejudice.That factual costs information can be relied on in subsequent assessment proceedings.

  • Additional liabilities – celebrity ‘tittle tattle’ is not ‘news’

Stone and Williams v Flynet Pictures:  additional liabilities can only be claimed as costs in harassment proceedings were the defendant publisher was acting in its capacity as a ‘news publisher’.

  • Solicitor – client disputes – inadequate estimates can amount to special circumstances

Eurasian Natural Resources Corp v Dechert LLP:  the solicitor’s failure to provide adequate estimates and failure to provide satisfactory explanation for exceeding estimates amounted to ‘special circumstances’ within the meaning of Section 70 (3) Solicitors Act 1974, thus entitling the client to assessment out of time. Master Rowley also said – obiter – that specific billing issues may amount to special circumstances, likewise the fact that the claimant could not realistically challenge regular interim statute bills within a month of delivery given the need to keep the solicitors on board.

Costs Seminar

We offer seminars on important areas of costs law and practice, including budgeting, detailed assessment, funding options and client care issues. Our speakers are accredited by The Law Society and delegates qualify for one CPD hour for each seminar attended.  Please contact us to discuss your exact requirements.

Share this article