Car-Wizard Ltd v Vixen Surface Treatments Limited

In consequential-costs proceedings, an approved costs budget may be revised during an unfinished trial where a court-directed development creates unbudgeted work, the application is prompt, and the revision is reasonable. Handing down a liability judgment before that work is completed does not itself make revision too late.

Where a claimant beats a Part 36 offer, the default consequences apply unless injustice arises from particular circumstances; the burden is formidable, and the comparison may include interest. Enhanced interest is not confined to cases involving dishonesty. A lower damages recovery does not alone justify reducing costs. Indemnity costs may be ordered where cumulative conduct takes the litigation out of the norm, including disclosure failures and interference with expert evidence.

Car-Wizard Ltd, a vehicle-repair business, sued Vixen Surface Treatments Limited, a supplier of commercial lathes. Following the trial, the court gave a liability judgment, [2026] EWHC 685 (Ch), and a damages judgment, [2026] EWHC 1682 (Ch).

This judgment determined consequential matters. They included revision of the claimant’s costs budget, the consequences of an unbeaten £65,000 Part 36 offer, interest on damages and costs, the costs percentage and basis, payment on account, and the additional Part 36 amount. The central issues were whether budget revision was still permissible and what orders followed from the offer and the parties’ conduct.

The court approved the claimant’s increased costs budget. The trial had not concluded when further submissions on damages became necessary. The need for that work arose from a court-directed development, the application was prompt, and no adequate basis for alleging excess or duplication had been shown. The court distinguished Queensgate Place Ltd v Solid Star Ltd & Ors (No. 3) (Consequential Matters) [2024] EWHC 2139 (Ch) and Elvanite Full Circle Ltd v AMEC Earth & Environmental (UK) Ltd [2013] EWHC 1643 (TCC).

1. The claimant had beaten its £65,000 offer. No exclusion in Part 36 applied. The default consequences therefore applied unless injustice was established. The defendant’s arithmetic failed because the offer included interest. The losses were pleaded, and the evidence explaining their sources did not need to be pleaded separately. The defendant had suffered no procedural prejudice.
2. Under section 35A of the Senior Courts Act 1981, interest on damages before expiry of the relevant period was compensatory and assessed broadly by reference to borrowing rates available to businesses with the claimant’s general attributes. The court awarded 5% above base rate. For the later period, the Civil Procedure Rules 1998 permitted enhanced interest. Dishonesty was not required. The defendant’s disclosure failures and interference with expert evidence justified 10% above base rate.
3. The claimant recovered 90% of its costs. A recovery below the pleaded amount did not alone justify a reduction. The defendant’s cumulative conduct took the case out of the norm and justified indemnity costs before expiry of the relevant period; Part 36 required indemnity costs thereafter.
4. The court awarded interest on costs at 5% above base rate before expiry and 10% thereafter. It ordered £214,000 on account of costs and an additional amount equal to 10% of the award including interest. A minute of order was requested.

This was a first-instance ruling on consequential matters. The judgment records an earlier liability judgment, [2026] EWHC 685 (Ch) , and a later damages judgment, [2026] EWHC 1682 (Ch) , in the same litigation. No appeal is described.