Cubic Transportation Systems Limited v Transport for London & Anor

Costs payable by an unsuccessful tenderer in procurement proceedings remain discretionary. An interested party does not obtain costs merely because it won the procurement or was permitted to participate. Ordinarily, it must show a separate issue on which it was entitled to be heard, or an interest requiring separate representation. The court may also consider specific and unusual features of the case. A payment on account is assessed by reference to the likely recoverable costs, the circumstances and complexity of the proceedings, and the quality of the information available. There is no fixed percentage applicable in every case.

The claimant challenged the defendants’ procurement of a revenue collection services contract. The defendants succeeded on an application to lift the automatic suspension, and the claimant accepted liability for the defendants’ costs of that application and of its application for an expedited trial. The court was asked to determine the amount payable on account of those costs and whether the interested party should receive costs at this stage.

The central issues were the appropriate payment on account for the defendants and whether the interested party’s entitlement to costs should presently be decided.

1. Costs order in favour of TfL. The claimant was ordered to pay the defendants’ costs of the application to lift the automatic suspension and the application for an expedited trial, subject to detailed assessment if not agreed.
2. Payment on account. The court accepted the claimant’s submissions that the amount should reflect the likely recovery on detailed assessment, the amount claimed compared with what was reasonably and proportionately recoverable, and the quality of the information supplied. No fixed percentage governed the exercise. Having regard to the substantial sums in issue, the volume of evidence and documentation, the claimant’s own estimated costs, and the importance and complexity of the applications, the court was satisfied that the defendants would recover at least £720,866.85. That sum, representing 60 per cent of the costs claimed, was ordered on account.
3. Interested party’s costs. The principles stated by Fraser J in Bechtel Ltd v High Speed Two (HS2) Ltd [2021] EWHC 640 (TCC) were accepted as applicable. Permission to participate did not itself confer an entitlement to costs. The court considered that the interested party’s claimed costs appeared to include substantial work unrelated to the applications, but declined to decide its entitlement before the issues between the claimant and the defendants had been resolved and the interested party’s role could be assessed.
4. Indra’s costs application was reserved to the trial judge. A case management conference was directed to be fixed after 1 April 2026.