Costs Orders: Does the Successful Party Automatically Recover Costs?

Introduction: Costs Orders and the Meaning of a ‘Successful Party’

The practical implications whether a party who was successful should be entitled to recover their costs in full and/or on the indemnity basis was considered in the case of Click Above Corben Mews Ltd v 381 Southwark Park Road RTM Co Ltd [2025] EWHC 1581 (TCC).

Background to Click Above Corben Mews Ltd v 381 Southwark Park Road RTM

This particular judgment was in relation to costs only, with the substantive case having been dealt with by a Judgment handed down on 23 January 2025. The Applicant had succeeded in their application to vary a freezing injunction made on 15 August 2022, with the issue of costs to be the subject of written submissions.

The Applicant argued that in the simplest of terms, their application had been successful therefore they should be entitled to their costs. The Applicant also sought to be awarded costs on the indemnity basis.

The Respondents however argued that the application was avoidable and a waste of court time. Their position was that as the Applicant failed to comply with previous Orders to provide information the Respondent was unable to accurately confirm whether or not the Applicant had a beneficial interest in the properties and would therefore be entitled to deal with the properties, which may have enabled the parties to achieve settlement sooner.

How the Court Assessed Costs and Indemnity Basis in This Case

Whilst the Court raised criticism of both parties’ arguments, they took a nuanced view when considering their respective positions and conduct, both during the Claim and specifically dealing with this summary assessment. The Court concluded that neither party acted unreasonably, and ergo on the matter of whether indemnity costs should be awarded, the threshold was not met.

In considering the Respondents’ argument that the application was not necessary, the Court distinguished the facts of the case from Taylor v Van Dutch Marine Holdings Ltd, which had been relied upon by the Respondent in their submissions. This was because in the Van Dutch case it was clear from the outset whether the creditor in question was entitled to enforce a security. The current matter was less clear on this point and whilst there was some merit in saying the application was unnecessary and overly cautious, there was also an argument in support of obtaining judicial clarity. The Court did note this to have been more of ‘a comfort than a necessity’.

This then leads the Court to consider whether the Respondent should have to meet the costs of the Applicant seeking judicial comfort rather than an absolute requirement to obtain an Order. Whilst this may have been a commercially sensible decision so as to preempt potential issues later, this does not mean that there is no costs risk. Returning to the starting point of cost consequences in that the ‘successful party’ should be awarded their costs, the Court confirmed the Applicant should be entitled to recover some. However given the numerous instances of cross-conduct justification throughout the Claim and the impact of this on the overall success, the Court ordered that the Respondents should pay 50% of the Applicant’s costs.

Conclusion: What This Judgment Means for Costs Applications

The Click Above case highlights the Court’s ability to exercise discretion in reaching a decision on costs, rather than restricted to absolute options available on the basis of whether a party is ‘successful’ or not. This case proves that there are often many more factors at play in determining the winning party’s entitlement to costs which require the Court to have this flexibility afforded to them by CPR Part 44. It is often not as simple as an all or nothing approach to such decisions.

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Kirsty Bargh can be contacted here.

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