Exceptional costs recovery following defence of £30 million claim

Our costs team secured an outstanding recovery of more than £717,000 for two former directors after successfully defending claims exceeding £30 million.

The underlying proceedings involved allegations that the directors had undertaken a corporate restructuring which resulted in an unlawful return of capital, was designed to defraud creditors and involved breaches of their duties as directors. Following an 18-day trial in November 2022, the judge dismissed all the claims in full. Due to the way the claimant had conducted parts of the case, the directors were awarded costs on the indemnity basis, together with an interim payment of £443,675.75.

The subsequent costs proceedings were highly contested. The claimant repeatedly proposed that the interim payment awarded should represent the final settlement of the directors’ costs. In August 2024, our team offered to settle the cost claim for £490,947.42 but the claimant failed to engage, necessitating detailed assessment proceedings which began in March 2025.

The claimant sought to limit recovery and advanced numerous technical challenges concerning funding arrangements, interest, arguments that inaccuracies within the trial costs estimate amounted to misconduct, allegations that the indemnity principle had been breached and claims that the bill was incorrectly drafted. It also served a lengthy Part 18 Request together with extensive points of dispute and pursued an application to challenge the bill’s ability to be assessed, arguing that it should be withdrawn.

Drawing on its extensive experience in high-value costs disputes, our costs team overcame those challenges while maintaining a clear strategic focus on maximising recovery for the clients. The team successfully resisted the claimant’s application, with the court concluding that the issues raised had already been properly addressed and awarding the directors their costs.

A key feature of our team’s approach was the effective use of a Part 36 offer. Following an initial offer of £512,000, the costs claimed were ultimately assessed at £516,421.60, representing approximately 98% of the total costs of the substantive action. Having beaten their own Part 36 offer, the directors were also awarded a 10% uplift together with enhanced interest.

We subsequently secured a further £136,432.19 in detailed assessment costs, resulting in a total recovery of £717,347.42, including costs, interest, Part 36 enhancements, and assessment costs. This exceeded the figure our clients had previously been prepared to accept by more than £226,000.

The result highlights our costs team’s strength in navigating complex assessment proceedings. By combining technical expertise, strategic use of Part 36 and robust responses to sophisticated costs challenges, we secured an exceptional outcome and maximised recovery for our clients.