Financial Inequalities and when can the court award costs pre-judgment?

An interesting judgment from HHJ Walden-Smith in the High Court in Peterborough which is an eye opener as to how different parties can litigate depending upon the economical means to them. In many ways whilst HHJ Walden-Smith's comments are not surprising, they are quite depressing on the subject of access to justice. 

The case also considers whether it was appropriate to make a costs order before final judgment had been given. HHJ Walden-Smith held that one area where the court could consider costs before judgment was where delays were "clearly attributable to conduct". The court had jurisdiction to order costs "both by reason of the provisions of section 51 of the Senior Courts Act 1981 and CPR 44.2." Here the Second Claimant was ordered to pay wasted costs on an indemnity basis after it was considered her behaviour was "out of the norm".  

The judgment in Abbotsley Ltd & Anor v Pheasantland Ltd & Ors [2025] EWHC 2076 (KB) (01 July 2025) relates to an application for wasted costs made by the First Defendant against the Claimants. The First Defendant alleged that the trial length had been extended and this had generated additional work. The Claimants contended that an application for costs could not be dealt with before a final determination was made. 

Financial Inequalities and the Court's Role 

HHJ Walden-Smith considered the issue of financial inequalities: 

"8. I have considered with care the written submissions on this issue from both the first defendant and the claimants in response. The underlying submission on the part of the first defendant is that the claimants appear to have unlimited resources whereas the first defendant, which operates for the purpose of managing the leasehold of the Abbotsley Country Homes land and lodges, has very limited resources and is reliant upon the loans of the wealthier lodge owners to be able to continue to defend the claims with legal representation. 

9. It is clear from the evidence that I have heard, that Ms Saunders is an experienced litigator and that she is very well aware of her ability to run a case at great cost, instructing senior counsel, with the idea that, if successful she will be able to recover those costs against the party she has decided to litigate against. I have expressed my concern during the course of this trial that the court is being used as a weapon to bully the defendants into behaving in the way that she wishes them to behave. I have been assured by leading counsel that is not the case and I accept that there are legal and factual issues between the second claimant and all the defendants that need to be resolved. 

10. The individual defendants in this case are in no financial position to pay for their own legal representation through the proceedings and many gave evidence of how this litigation has both locked them into not being able to sell their property and has taken all their savings – at least one described being on their knees. The first defendant is struggling to be able to pay for ongoing legal representation and is facing First Tier Tribunal proceedings with respect to whether the service charge can be used to fund any part of the litigation. On the other hand, the claimants have not baulked at paying very significant legal fees of both leading counsel, junior counsel and a paralegal on a noting brief, even though the cost budgeting clearly provides only for one counsel with Ms Saunders deciding not to instruct a solicitor. The first claimant is a significant land owner and the second claimant is the sole director and shareholder of the first claimant. At least a significant part of the land owned by the first claimant is currently subject to a promotion (or option) agreement with a significant local house builder. The land falls very close to the development of train and road transport links between Oxford and Cambridge and has been an area of recent significant housing development. In addition the second claimant is the owner of a now unused hotel and sports complex, which appears ripe for development. There is an apparent and clear significant financial inequality of arms and, while I do not have bank statements or other evidence before me, all the evidence available, and Ms Saunders' conduct, indicates that she does not struggle with paying what must be very high legal costs. The court has no role in rebalancing financial inequalities." 

The comments highlight the ability of parties to litigate in a manner that they want but the underlying reminder here is that unfettered litigating does not equate to the ability to recover all of those costs. In the matter at hand the court acknowledged that the approach taken by the Claimants was not consistent with their costs budget, which could create difficulties if the Claimants were to be awarded costs in the case.  

The other obvious remark is that the ability to litigate in such a way is acknowledged as an inequality by the court. It is a reminder that the court has no role in redressing this and that costs procedures like Costs Budgeting and Fixed Recoverable Costs will not solve the issue of inequality that can be pervasive in litigation. There is no simple solution. 

Conduct and Wasted Costs 

The High Court considered the time that had been wasted by the Second Claimant's conduct at trial. The listing of the conduct issues makes for an interesting read: 

17. With respect to the schedule of incidents, the matters where there was court time wasted as a consequence of the conduct of the second claimant and/or the need to take further instructions to avoid professional embarrassment were as follows. Where I am in any doubt as to whether the fault lies directly with the second claimant, I have not included these matters. Having been presiding over this trial, I can be absolutely certain where I have referred to time being wasted – this is time that was wasted because of the second claimant's conduct. 

(1) On 1 May 2025, the second claimant walked out of court after one of the individual defendants alerted the court to the fact that the second claimant had been mimicking counsel for the first defendant from behind the screens in court. This was in keeping with previous immature behaviour from the second claimant when interacting with counsel for the second defendant. 1 hour wasted. 

(2) On 2 May 2025, proceedings were interrupted when the second claimant started sobbing very loudly after her witness told the court that he signed his second statement "blind" and he did not know what it said. 40 minutes wasted. 

(3) On 15 May 2025, leading counsel for the second claimant had to ask for the embargo to be lifted from the second claimant discussing the case while giving evidence as counsel needed instructions to avoid professional embarrassment. 22 minutes wasted. 

(4) On 15 May 2025, the second claimant had to be warned against self-incrimination and counsel sought permission to give advice and for the embargo to be lifted for a second time. 1 hour and 10 minutes wasted 

(5) On 16 May 2025, the embargo had to be lifted for a third time as evidence of a without prejudice meeting by the second claimant with some of the individual defendants was raised but claimant's counsel had not been instructed about such a meeting. 36 minutes wasted. 

(6) On 16 May 2025, the embargo had to be lifted again in order for instructions on documents to be taken from the second claimant. A total of 19 minutes wasted. 

(7) On 20 May 2025, the proceedings were paused to enable counsel to take further instructions. A total of 28 minutes wasted. 

(8) On 21 May 2025, there was a delay to the evidence as a consequence of the second claimant taking photographs of one of the defendants while he was waiting in the coffee queue in a local coffee shop and wrongly accusing him of standing in a threatening posture and moving towards her aggressively, when he was standing normally and had not moved – the second claimant had zoomed in on him. 20 minutes wasted. 

(9) On 22 May 2025, further instructions were taken with respect to whether the second claimant was willing for the court to see the dashcam footage of the second claimant driving her car and touching Ms Beresford Ambridge. The second claimant contended she did not want the court to do so as she has an extant application to the Criminal Case Review Commission (albeit she has no new evidence), but the magistrates and the Crown Court had seen the footage and convicted the second claimant of assault by battery. 33 minutes and 28 minutes wasted dealing with this issue. 

(10) On 23 May 2025, the dashcam footage from the second claimant was disclosed showing her using her car to push at another defendant, days before the incident involving Ms Beresford Ambridge. Instructions had to be taken with regard to the showing of the dashcam footage and why it had not been disclosed earlier. Total wasted time 38 minutes. 

(11) On 27 May 2025, the video evidence showing what had actually happened after the assault on Ms Beresford Ambridge undermining the second claimant's allegation against Darren Honeywill that he had thrown tea over her. Total wasted time 1 hr and 4 minutes. 

18. By listing out these incidents it can be seen just how "out of the norm" the behaviour of the second claimant has been within the litigation. The total wasted time on these various points amounts to 7 ½ hours or 1 ½ days of court time. At a rate of £3,500 – which is entirely reasonable and proportionate - that is an identifiable and wasted cost of £5250 awarded on the indemnity basis. 

What is clear is that the court has wide discretion as to costs and where there is clear and attributable conduct issues then adverse costs can and will be ordered, even pre-judgment.