Yodel Delivery Network Limited v Jacob Corlett & Ors

Security for costs paid into court is court-controlled security, not a fund that the paying party may appropriate to discharge an accrued costs liability. A successful defendant may retain sufficient security until all costs for which it was ordered have been paid. Retention is not an increase in security while the liability remains unpaid; once the liability is paid, excessive security may be revisited if circumstances have changed.

Early payment out remains possible where a balancing exercise shows that it is just, but the court must protect against unrecovered costs. Security for detailed assessment costs is assessed on the standard basis unless the conduct of those separate proceedings justifies indemnity costs. A non-party costs application has no fixed time limit, but the High Court cannot impose liability for Court of Appeal costs. Disclosure of funders may be ordered ancillary to such an application.

Following dismissal of Shift Global Holdings Ltd and Corja Holdings Ltd’s counterclaim, with costs ordered on the indemnity basis and an interim payment required, Shift and Corja applied under the Civil Procedure Rules 1998 for payment out of £1.525 million held as security and for more time to pay.

Yodel sought additional security for the costs of detailed assessment, orders under section 51 of the Senior Courts Act 1981 making Mr Corlett personally liable for specified costs, disclosure of litigation funders, and an extension of time for commencing detailed assessment. The central issues were whether the existing security could be released before final assessment, the proper basis and amount of further security, the scope and timing of non-party costs orders, and the treatment of interest during the extension.

1. Payment out and retention of security. Payment out of the £1.525 million was refused. Security paid into court under the Civil Procedure Rules 1998 is court-controlled protection against the risk of non-recovery, rather than a fund that the paying party may appropriate to discharge whichever costs liability has accrued. A successful defendant may retain sufficient security until all liability for the costs for which it was ordered has been satisfied. Retention was not an increase in security while the outstanding costs remained within the potential liability. Shift and Corja could reapply if the outstanding payment was made and the security then became excessive.
2. Discretionary payment out. Earlier payment out may be justified where the paying party cannot meet an interim order within a reasonable time, its cash-flow crisis is likely to have ended by detailed assessment, and the balance of prejudice favours release having regard to the purpose of security. Those circumstances were not established. Shift could raise funds now, whereas Yodel faced a greater recovery risk if the security were released. The judge applied and distinguished the reasoning in In re Peak Hotels and Resorts Ltd [2018] EWCA Civ 2256, Force India Formula One Team Limited v 1 Malaysia Racing Team SDN BHD [2012] EWHC 1726 (Ch) and Magomedov v TPG Group Holdings (SBS), LP [2026] EWHC 1051 (Comm).
3. Detailed assessment security. Security for the costs of detailed assessment was ordered on the standard basis. The indemnity costs order and the dishonesty found in the underlying litigation did not by themselves justify indemnity costs for the separate assessment proceedings, which would be considered by reference to conduct and offers in those proceedings. Security of £48,000 was ordered, after credit for the surplus in the existing security. Failure to provide it within 28 days could debar Shift and Corja from participating in the assessment.
4. Non-party costs. The application under section 51 of the Senior Courts Act 1981 was not time-barred, and no issue estoppel arose against Mr Corlett because he had not been a party to the counterclaim. He was made jointly and severally liable for the costs of the injunction application and counterclaim. The High Court had no jurisdiction to impose liability for the costs of the Court of Appeal proceedings, since section 51(1) referred to the court in which those proceedings occurred.
5. Disclosure and time. Shift was ordered to disclose the identities and funding terms of relevant funders within 14 days. Such disclosure was ancillary to the contemplated non-party costs application and was justified by the uncertainty over funding and earlier non-compliance with a disclosure order. Time for paying the outstanding interim costs was extended to at least 31 July 2026, and time for commencing detailed assessment to 31 August 2026. Whether interest should be disallowed under CPR rule 47.8(3) was left to the costs judge after the conduct of the assessment proceedings was known.

First-instance consequential and procedural applications following dismissal of the counterclaim. The judgment records an earlier Court of Appeal appeal concerning the injunction, dismissed on 15 August 2025, but no appeal from this judgment.