Thomas v PGI Group Ltd

Where a party loses a discrete application for a costs capping order, the ordinary principle that costs follow the event will generally apply. The costs of that application should not be postponed merely because some submissions overlap with a later costs-budgeting exercise, where the issues are materially separate. Summary assessment may be preferable to detailed assessment where the costs can be assessed efficiently by the judges familiar with the application. A payment on account is unnecessary where assessment will occur shortly and the receiving party has not provided a costs schedule or allowed a reasonable opportunity for submissions.

The defendant had unsuccessfully applied for a costs capping order limiting the claimants’ recoverable future costs to approximately £150,000, or alternatively for a costs budget in that amount. The application was rejected in an earlier judgment, but the parties’ future costs budgets had not yet been set.

The claimants sought their costs of the costs capping application, immediate detailed assessment and a payment on account. The defendant argued that costs should be reserved until the costs-budgeting hearing, or assessed later. The issues were whether the defendant should pay the costs of the discrete application and what form the costs order should take.

1. The defendant was liable for the claimants’ costs of the costs capping application. The application concerned whether a costs capping order should be imposed, or whether a costs budget should be fixed at approximately £150,000. Those issues were discrete and separate from the ordinary assessment of whether a proposed costs budget was reasonable or proportionate.
2. The defendant had lost the costs capping application. There was no significant overlap with the issues to be considered at the later costs-budgeting hearing, and the result of that hearing would not affect the principle governing liability for the costs of the earlier application. The ordinary rule that costs follow the event therefore applied.
3. Detailed assessment was inappropriate. It would cause substantial delay and expense and would require the costs judge to disentangle costs relating to the application from general costs-management and budgeting issues.
4. Summary assessment was appropriate and would be undertaken by the judges familiar with the application. The claimants were ordered to file and serve a schedule of the costs claimed seven days before the hearing on 19 November 2021, when the summary assessment would take place.
5. No payment on account was ordered. The assessment was to occur shortly, and the claimants had not provided a costs schedule or given the defendant a reasonable opportunity to address the proposed figure.

Not an appeal. The judgment determined the costs consequences of an unsuccessful costs capping application described in the judgment.