Dentons UK and Middle East LLP v Solicitors Regulation Authority Ltd [2026] EWCA Civ 655

[2026] EWCA Civ 655Case No CA-2025-000780
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
KING’S BENCH DIVISION
ADMINISTRATIVE COURT
LANG J
AC-2024-LON-002379
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 21/05/2026
Before
LORD JUSTICE BEAN (Vice President, Court of Appeal, Civil Division)LORD JUSTICE JEREMY BAKERLORD JUSTICE ZACAROLI
Between
DENTONS UK AND MIDDLE EAST LLPAppellantSOLICITORS REGULATION AUTHORITY LTDRespondent
Richard Coleman KC and Marianne Butler (instructed by Kingsley Napley LLP) for AppellantPaul Ozin KC and George McDonald (instructed by Capsticks LLP) for RespondentHearing dates; 25-26 March 2026
COSTS JUDGMENT
[1]In a judgment handed down on 27 April 2026 [2026] EWCA Civ 508, we allowed an appeal by the solicitors’ firm, Dentons UK and Middle East LLP (“Dentons”), against a decision of Lang J, itself made on appeal from a decision of the Solicitors’ Disciplinary Tribunal (the “SDT”) in proceedings brought by the Solicitors Regulation Authority Ltd (the “SRA”). This judgment addresses certain issues arising in relation to the costs of that appeal and of the appeal to Lang J. It is common ground that the costs of the proceedings before the SDT are to be reserved to the SDT itself.[2]Subject to the point discussed below, we have concluded that the appropriate costs order is that the SRA pays 65% of the costs of Dentons incurred in this court and on the appeal to Lang J. This best balances two considerations: first, Dentons is – following the second appeal to this court – substantially the successful party in respect of the appeals from the decision of the SDT. Second, we have nevertheless quashed the decision of the SDT and remitted the case to it to be determined on the basis of the different test set out in our judgment.[3]The question which now arises for determination is whether, as the SRA contends, no costs order should be made against it to reflect the fact that it is a regulatory body discharging its responsibilities as a regulator.[4]In Baxendale-Walker v Law Society [2007] EWCA Civ 233; [2007] 3 All ER 330 (“Baxendale-Walker 1”), the Court of Appeal held that there was no presumption in cases before the SDT that an order for costs should be made in favour of a solicitor who had been successful before the tribunal. The reasoning and conclusions of the Court of Appeal in that case are summarised as follows in the headnote:
“When the Law Society was discharging its responsibilities as a regulator of the profession an order for costs should not ordinarily be made against it on the basis that costs followed the event. There was no assumption that an order for costs in favour of a solicitor who had successfully defeated an allegation of professional misconduct would automatically follow. When the Law Society was addressing the question whether to investigate possible professional misconduct, or whether there was sufficient evidence to justify a formal complaint to the tribunal, the ambit of its responsibility was far greater than it would be for a litigant deciding whether to bring civil proceedings. Disciplinary proceedings supervised the proper discharge by solicitors of their professional obligations, and guarded the public interest by ensuring that high professional standards were maintained, and, when necessary, vindicated. Although the Law Society was not obliged to bring disciplinary proceedings, if it was to perform its functions and safeguard standards, the tribunal was dependent on the Law Society to bring properly justified complaints of professional misconduct to its attention. Accordingly, the Law Society had an independent obligation of its own to ensure that the tribunal was enabled to fulfil its statutory responsibilities. The exercise of that regulator function placed the Law Society in a wholly different position to that of a party to ordinary civil litigation. The normal approach to costs decisions in such litigation had no direct application to disciplinary proceedings against a solicitor. The tribunal's costs decision should be informed by the crucial feature that the proceedings had been brought by the Law Society in exercise of its regulatory responsibility in the public interest and the maintenance of proper professional standards. For the Law Society to be exposed to the risk of an adverse costs order simply because properly brought proceedings had been unsuccessful might have a chilling effect on the exercise of its regulatory obligations, to the public disadvantage. Accordingly, the appeal would be dismissed.”
[5]In a subsequent decision in the same proceedings, Lord Phillips CJ (in a costs decision that related to a hearing he had conducted when Master of the Rolls) decided that the same principle applied on an appeal under s.13 of the Solicitors Act 1974, against the imposition by the Law Society of conditions on the solicitor’s practising certificate: [2007] EWCA Civ 820 (“Baxendale-Walker 2”). He said, at §23:
“In my judgment the principle set out in the passage that I have just read applied equally to the proceedings with which I am concerned. Of course, where the proceedings are appellate in nature, there may be circumstances which arise out of the factor that it is a second hearing which will justify departing from that general principle. There is none such in the present case. The decision that I am about to announce is one that I would have reached even in the absence of that principle. It is in response to Mr Dutton's final submission that the dishonesty of the Petitioner in respect of the evidence given to me meant that the only appropriate course was that I should award costs in favour of the Law Society”
[6]This was in fact obiter, because Lord Phillips CJ determined at §24-25 that the Law Society were entitled to the payment of their costs largely on the basis that it was the petitioner’s dishonesty that was responsible for the costs incurred.[7]The SRA contend that we should adopt the same approach in respect of the costs of the appeal to Lang J and the costs of the further appeal to this court.[8]The question whether the approach before the SDT (or a similar tribunal in which proceedings are brought by a public body carrying out a regulatory function) mandated by Baxendale-Walker 1 should also apply on an appeal has been considered, and answered in the negative, in at least the following cases.[9]First, in Bryant and another v Law Society [2007] EWHC 3043 (Admin); [2009] 1 WLR 163 (DC) the Divisional Court (Richards LJ and Aikens J) concluded that the normal approach under the CPR should apply to the costs before the Divisional Court, on an appeal against a decision of the SDT. There was no consideration given, however, to either of the two Baxendale-Walker decisions.[10]Second, in Bass and Ward v SRA [2012] EWHC 2457 (Admin), Bean J, having been referred to Baxendale-Walker 1, concluded that the decision did not govern the costs of an appeal. Baxendale-Walker 2 was not cited.[11]Third, in Wingate v Solicitors Regulation Authority [2018] 1 W.L.R. 3969, the Court of Appeal reiterated that the principle that applied before the SDT did not apply on appeal. At §135, having referred to the approach taken in Baxendale-Walker 1, Rupert Jackson LJ said: “…When parties arrive in the Administrative Court, because one or other of them is appealing against decisions made by the Solicitors Disciplinary Tribunal, they are entering a costs shifting regime. They stand on an equal footing. Subject to any special circumstances, the losing party will normally pay the winning party’s costs: see CPR r 44.2. In this case the SRA will pay the costs of Mr Evans in the Administrative Court. They will recover their costs in that court against Mr Wingate”.[12]Again, the decision of Lord Phillips CJ in Baxendale-Walker 2 was not cited.[13]The SRA contends that there is a tension between Lord Phillips CJ’s decision and the other decisions referred to above, and that Lord Phillips CJ’s approach is the correct one.[14]We do not agree. The Court of Appeal’s decision in Wingate, which expressly considered whether the approach in Baxendale-Walker 1 should be applied on appeal, is binding on us. It is not rendered per incuriam by reason of the fact that Lord Phillips CJ’s comments in Baxendale-Walker 2 (which was not binding on the Court of Appeal) were not cited to it. In our judgment, the Court of Appeal in Wingate was in any event correct in determining that the reasoning that underpinned the Court of Appeal’s decision in Baxendale-Walker 1 decision does not extend to appeals from the SDT. The approach applied in the SDT is based on the fact that the SRA’s regulatory responsibilities require it to bring properly justified complaints to the SDT’s attention without fear of the “chilling effect” of an adverse costs order. That sets the SRA aside from an ordinary litigant in civil litigation. The same does not apply, however, where, as here, the SRA has the benefit of a determination by the SDT and challenges it on appeal. In that context its position is in our judgment more akin to that of a normal litigant.[15]In view of our decision that Dentons is entitled to 65% of its costs of the two appeals, with those costs being subject to detailed assessment if not agreed, a further issue arises as to the appropriate amount to order on account of the costs.[16]Dentons has filed costs schedules which show they have incurred costs in the total sum of £793,679.60 exclusive of VAT (VAT is not claimed as the firm is VAT registered). £355,778.98 was incurred in the High Court and £437,900.62 was incurred in the Court of Appeal. This was nearly 4.5 times higher than the costs incurred by the SRA (£90,358.54 in the High Court and £89,479.13 in the Court of Appeal).[17]65% of the total costs incurred by Dentons is £515,891.74.[18]It is not for us to assess the costs, but to identify, for the purposes of ordering a payment on account, a fair estimate of the likely level of recovery subject to a margin to allow for error in estimation: Excalibur Ventures LLC v Texas Keystone [2015] EWHC 566 at §23 to §24.[19]The matter was no doubt of considerable importance to Dentons, but the question on assessment of costs payable between litigants is not whether it was reasonable for Dentons to choose to instruct such expensive solicitors and counsel, but whether it is reasonable for the resulting cost to be imposed on the SRA. In our judgment, given the enormous amount of their costs for a matter that lasted a day in the High Court, and involved substantially a repeat of the same arguments at a hearing of less than two days in the Court of Appeal, a substantial discount is appropriate in arriving at a fair estimate of the likely level of recovery. We will order the SRA to pay £200,000 within 21 days on account of the total costs incurred by Dentons across both appeals.