Car-Wizard Ltd v Vixen Surface Treatments Limited [2026] EWHC 2177 (Ch)

[2026] EWHC 2177 (Ch)Case No BL-2023-BRS-000060IN THE HIGH COURT OF JUSTICEVenue BUSINESS AND PROPERTY COURTS IN BRISTOLCIRCUIT COMMERCIAL COURT (KBD)Venue Bristol Civil Justice Centre, 2 Redcliff Street, Bristol, BS1 6GRDate 17 August 2026
Before
HHJ PAUL MATTHEWS(sitting as a Judge of the High Court)
Between
CAR-WIZARD LIMITEDClaimantVIXEN SURFACE TREATMENTS LIMITEDDefendant
Jay Jagasia (instructed by Wards Solicitors LLP) for ClaimantSimon Goldberg KC (instructed by Knights) for DefendantRuling on consequential matters, made on paper
This judgment was handed down remotely at 2:30 pm on 17 August 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archive.HHJ Paul Matthews :

Introduction

[1]This commercial claim between a small vehicle repair business and a supplier of commercial lathes was tried by me in October and November 2025. I handed down my written reserved judgment on 26 March 2026 (see [2026] EWHC 685 (Ch)). My draft judgment (circulated a few days earlier to the parties) had dealt with both liability and quantum of loss. However, following representations made by the defendant after such circulation, the judgment as actually handed down dealt with questions of liability, but not with the assessment of damages, which was now to be dealt with after additional submissions had been made and considered.[2]On 13 April 2026, the claimant applied to revise its costs budget. I directed and received written submissions from both sides about this, dated 22 April 2026 and 24 April 2026. On 3 July 2026, I handed down my written judgment on the assessment of damages (see [2026] EWHC 1682 (Ch)). I then invited and received written submissions on questions of consequential matters, including costs and interest. These are my reasons for my decisions on costs budget amendment and consequential matters. I am sorry that this has taken longer than I anticipated.

General comments

[3]General comments Before turning to deal with these matters, I regret to have to record that, at every stage in this litigation which I have overseen, there has been little meeting of minds, and far less co-operation than I am used to, and expect, between the parties, even though both sides are represented by experienced solicitors and counsel. The result has been a longer drawn-out, far more aggressive and certainly more expensive lawyer-led dispute resolution process than I have experienced for a long time. It has been like going back in time to when I first started in practice in the 1980s. This is highly regrettable, particularly in these days when judicial resources are scarce, and the emphasis must be on the efficient resolution of disputes.[4]Although it was not necessary for me to form a view about any of this for the purposes of the two previous judgments I have given, I must also record that in my judgment the main responsibility for the lack of co-operation lies with the defendant and its legal team. Every possible point has been taken in the defence of this claim, very many of them either bad or irrelevant. Although the claim was issued in December 2023, the trial did not take place until nearly two years later, in the autumn of 2025. This is unusually slow. In my judgment this was largely due to the defendant’s aggressive approach.[5]In addition to that, cross-examination at trial elicited the fact that many of the defendant’s relevant records were destroyed by the defendant after this dispute arose (though this fact was not mentioned in the disclosure reports): see my main judgment at [63]-[65] and [83]). The defendants’ lawyers must bear the main responsibility for that. Cross-examination also elicited the fact that the defendant’s engineering expert had revised his opinion after someone in the defendant’s legal team had suggested to him that in light of what happened at trial he reconsider his report (see my main judgment at [94]-[95]). Frankly, this is not the kind of conduct which I expect in conducting litigation in 2026 under the CPR.

Claimant’s budget revision application

[6]Claimant’s budget revision application The first matter with which I must deal is the claimant’s application by notice dated 13 April 2026 to revise its costs budget. It sought an increase upwards in the trial phase of the claim of £19,710, so that its total budget would increase from £275,201.79 to £294,911.79. This is an overall increase of about 7%. This increase was to cover written submissions on the question of the assessment of damages, which was certainly not foreseen by anyone when I reserved judgment at the end of what turned out to be the first phase of the trial.[7]The defendant by its lawyers objected to the application, referring to the decision in Queensgate Place Ltd v Solid Star Ltd & Ors (No. 3) (Consequential Matters) [2024] EWHC 2139 (Ch). In that case David Rees KC, sitting as a deputy judge, referred to earlier dicta to the effect that it would not be appropriate for budget approvals to be sought by the court after the trial had concluded. In particular, in Elvanite Full Circle Ltd v AMEC Earth & Environmental (UK) Ltd [2013) EWHC 1643 (TCC), [39], Coulson J had said “Furthermore, in my judgment, an application to amend an approved costs budget after judgment is a contradiction in terms.”[8]I note that there are in fact cases where the trial judge has allowed applications to revise costs budgets upwards after trial. These include Cranstoun v Notta [2021] Costs LR 47, and Barry v Barry [2025] 4 WLR 56, both of which post-date Elvanite. Barry was a case where the formal application to vary was made after the trial had started, but before it had finished, though it was not dealt with until after the trial was over. So far as I can see, neither of these decisions was mentioned by David Rees KC in his judgment. I assume that this is because they were not referred to him.[9]In any event, however, this case is factually different from Queensgate and Elvanite. Firstly, the trial of the claim in the present case had not concluded. The intention had always been to deal with liability and quantum together. I abandoned this idea only at the last moment, after circulation of my draft judgment, and comments made by the defendant. I decided that I needed further submissions from the parties, and therefore adjourned the trial for that purpose. In the meantime, I handed down judgment on liability, simply because I considered that it would be too difficult to preserve the confidentiality of that decision if I waited for further submissions.[10]Secondly, before I had even received, let alone considered, those submissions, the claimant had already applied to revise its budget to cover their cost. This extra cost had not previously been contemplated, and was necessitated not by anything the parties did, but by my own decision that it was in the interests of justice to require those further submissions. In my judgment, the revision was therefore sought during the trial, and the application was sufficiently prompt. By contrast, in both Queensgate and Elvanite there was unexplained delay in applying for the approval of a revision. In my judgment, it was not too late in the present case to apply for a revision to cover further, unbudgeted, work which at that stage had not been carried out.[11]The defendant also opposed the application on the basis that there had been no “significant development” within CPR rule 3.15A, making it mandatory for the claimant to revise its budget. I disagree. My decision not to deliver my draft judgment, but to invite further submissions on the assessment of damages, was such a development, giving rise to the need to incur further costs. I really do not understand how the defendant can have thought otherwise.[12]Thirdly, the defendant objected to the increase on the basis that it was excessive and duplicative of effort. However, no particulars were given of its allegedly excessive and duplicative nature. In particular, the defendant has not condescended to state how much the further written submissions added to its own costs. If this was indeed less than the increase sought by the claimant, I have no doubt that the defendant would have said so. I infer therefore that it is because the increase is at least as great as that of the claimant. That would hardly demonstrate excess and duplication on the part of the claimant.[13]Looking at the extra work that had to be done, I do not consider the sums claimed excessive, and I have no proper basis for assuming duplication of effort. For all the above reasons, I am entirely satisfied that I should approve the revised budget of the claimant, and accordingly I do so.

Th effect of an unbeaten Part 36 offer

[14]Th effect of an unbeaten Part 36 offer In the present case there was an offer made by the claimant under CPR Part 36, and I need to deal with the consequences of that, before I can consider how far to apply the rules on interest and the rules on costs. The offer was made by letter dated 24 October 2024, about a year prior to trial. The “relevant period” for the purposes of rule 36.17 (below) was 21 days, expiring on 14 November 2024. The amount that the claimant offered to accept in respect of its claims was £65,000. On the face of it, the claimant has significantly beaten that offer, recovering some £86,000 by my judgment. I have not been informed of any offer made by the defendant, and therefore proceed on the basis that this is the only offer which I am to take into account.[15]CPR rule 36.17 relevantly provides as follows:
“(1) Subject to rule 36.24, this rule applies where upon judgment being entered— (2) For the purposes of paragraph (1), in relation to any money claim or money element of a claim, ‘more advantageous’ means better in money terms by any amount, however small, and ‘at least as advantageous’ shall be construed accordingly. [ … ] (4) Subject to paragraph (7), where paragraph (1)(b) applies, the court must, unless it considers it unjust to do so, order that the claimant is entitled to— (5) In considering whether it would be unjust to make the orders referred to in paragraphs (3) and (4), the court must take into account all the circumstances of the case including— (6) Where the court awards interest under this rule and also awards interest on the same sum and for the same period under any other power, the total rate of interest must not exceed 10% above base rate. (7) Paragraphs (3) and (4) do not apply to a Part 36 offer— [ … ] (b) judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant’s Part 36 offer. (a) interest on the whole or part of any sum of money (excluding interest) awarded, at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired; (b) costs (including any recoverable pre-action costs) on the indemnity basis from the date on which the relevant period expired; (c) interest on those costs at a rate not exceeding 10% above base rate; and (d) provided that the case has been decided and there has not been a previous order under this sub-paragraph, an additional amount, which shall not exceed £75,000, calculated by applying the prescribed percentage set out below to an amount which is— (i) the sum awarded to the claimant by the court; or (ii) where there is no monetary award, the sum awarded to the claimant by the court in respect of costs— Amount awarded by the court Prescribed percentage Up to £500,000 10% of the amount awarded Above £500,000 10% of the first £500,000 and (subject to the limit of £75,000) 5% of any amount above that figure. (a) the terms of any Part 36 offer; (b) the stage in the proceedings when any Part 36 offer was made, including in particular how long before the trial started the offer was made; (c) the information available to the parties at the time when the Part 36 offer was made; (d) the conduct of the parties with regard to the giving of or refusal to give information for the purposes of enabling the offer to be made or evaluated; and (e) whether the offer was a genuine attempt to settle the proceedings. (a) which has been withdrawn; (b) which has been changed so that its terms are less advantageous to the offeree where the offeree has beaten the less advantageous offer; (c) made less than 21 days before trial, unless the court has abridged the relevant period. [ … ].”
[16]The first question is whether rule 36.17(1)(b) is satisfied, that is, whether the “judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant’s Part 36 offer”. Subject to one point taken by the defendant, and dealt with below, the answer is clearly Yes. Looking at rule 36.17(4), the next question is whether it is disapplied by any of the provisions in rule 36.17(7). The answer is No. Therefore, subject to the defendant’s point, rule 36.17(4) applies.[17]The legal result of that is that the provisions of rule 36.17(a)-(d) will apply to this case “unless [the court] considers it unjust” so to order. In considering that question, the court must take into account all the circumstances of the case including the matters specifically set out in rule 36.17(5). The default position is that the provisions of rule 36.17(a)-(d) will apply. That default position is therefore not itself unjust. Instead, the injustice needed to be able to disapply these provisions must be found in the particular circumstances of the case: see Downing v Peterborough & Stamford Hospitals NHS Foundation Trust [2015] 2 Costs LO 2013, [61]. According to Gross LJ, citing Briggs J in an earlier case, the burden of showing injustice is a “formidable obstacle”: Briggs v CEF Holdings Ltd [2017] EWCA Civ 2363, [20].[18]Is it then “unjust” so to order? The defendant says that it is. This is the point taken by the defendant and referred to above. It says that part of the damages awarded is in respect of lost work from a trade customer, SJ Curtis. But SJ Curtis did not appear in the claimant’s statements of case. The defendant became aware of it only on service of the report from the claimant’s expert, Mr Hatcher, on 15 August 2025. If the value of the damages awarded in respect of lost work from SJ Curtis are excluded from the total, says the defendant, the amount awarded would be £62,276.50, which is £2,723.50 less than the Part 36 offer. So, the defendant says, rule 36.17(1)(b) is not satisfied at all.[19]The first problem with the defendant’s argument is one of arithmetic. It may be that, if the SJ Curtis losses were excluded, the bare damages award would indeed fall to less than the £65,000 Part 36 offer. But that offer included interest up to the expiry of the relevant period. Even at the interest rate offered by the defendant (2% above base rate), the accrued interest on the (reduced) damages award added to that award would well exceed the Part 36 offer, rising to about £73,000. So, the argument fails in limine.[20]The second problem with the defendant’s argument is that the claimant’s losses were pleaded, as amounting to about £356,000. How they were derived from individual sources of business was not pleaded. In my main judgment, I said:
“186. There are two points to make in response to the point that the further letters were not pleaded. The first is that I doubt that it was necessary to plead them at all, since they were simply evidence of the loss claimed, and there is no requirement to plead evidence: see eg Barclays Bank Plc. v Boulter [1998] 1 WLR 1, 8, per Mummery LJ; Tchenguiz v Grant Thornton UK LLP [2015] EWHC 405 (Comm), [1], per Leggatt J. The loss itself [was] pleaded, even though not completely quantified. 187. But in any event, in the present case, paragraph 24 of the Amended Particulars of Claim referred to the possibility of updating the Schedule of Loss to the date of trial, and paragraphs 86 and 87 of the claimant’s first trial witness statement referred to the seeking of the further letters. Moreover, the further letters once received were disclosed to the defendant, and were considered by the forensic accountants and included as part of their calculation of the claimant’s loss. In my judgment, the defendant came to this trial well aware of the claimant’s case on loss, and also of the evidence being put forward to prove it. So, even if the claimant should have pleaded the further letters, the defendant has suffered no prejudice as a result.”
[21]As I result, I do not consider that there is anything in the defendant’s objection. The defendant knew of the SJ Curtis letter from disclosure (well before Mr Hatcher’s report), and was not taken by surprise by the claimant’s case on loss at trial. Indeed, the Amended Particulars of Claim referred to the possibility of updating the Schedule of Loss to the date of trial. And I have not been told that the defendant made any counteroffer to the claimant of the reduced amount it now says should be the amount due (£62,276.50), or anything approaching it. I do not consider that there is anything in the circumstances of this case making it unjust to apply the consequences set out in rule 36.17(4).

Interest on damages

[22]Interest on damages The first period I now turn to consider the question of awarding interest on damages awarded. There are two periods to consider: first, from 1 June 2021 to 14 November 2024 (the expiry of the “relevant period”), and second, from 14 November 2024 to 3 July 2026 (the date of my judgment on damages). The second is governed by CPR rule 36.17(4)(b). I will return to that. The first however is governed by section 35A of the Senior Courts Act 1981 (conferring a discretion on the court) and the caselaw. The court’s approach on this was summarised in the Court of Appeal’s decision in Carrasco v Johnson [2018] EWCA Civ 87.[23]In that case, Hamblen LJ (with whom Kitchen LJ agreed), after referring to a number of authorities, stated the position as follows:
“17. The guidance to be derived from these cases includes the following: (1) Interest is awarded to compensate claimants for being kept out of money which ought to have been paid to them rather than as compensation for damage done or to deprive defendants of profit they may have made from the use of the money. (2) This is a question to be approached broadly. The court will consider the position of persons with the claimants' general attributes, but will not have regard to claimants' particular attributes or any special position in which they may have been. (3) In relation to commercial claimants the general presumption will be that they would have borrowed less and so the court will have regard to the rate at which persons with the general attributes of the claimant could have borrowed. This is likely to be a percentage over base rate and may be higher for small businesses than for first class borrowers. (4) In relation to personal injury claimants the general presumption will be that the appropriate rate of interest is the investment rate. (5) Many claimants will not fall clearly into a category of those who would have borrowed or those who would have put money on deposit and a fair rate for them may often fall somewhere between those two rates.”
[24]The claimant is properly to be characterised as a small business, a “one-man” company, whose owner might easily have been a sole trader. The benefit of limited liability has the downside that lenders may perceive greater risk in lending to a company than to a sole trader, who stands to lose his or her own assets, and thus demand a loan premium. But this is a broad-brush exercise, and I think it right for this purpose to treat the claimant in much the same way as a sole trader.[25]The claimant asks for 5% over the Bank of England’s base rate from 1 June 2021 to 14 November 2024 (the expiry of the “relevant period”). The defendant submits that 2% over base rate is appropriate, as the rate which the claimant would have had to pay to borrow the money. The rate of 2% over base rate seems too low to me. A large company in a good way of business may be able to borrow at that rate, but I doubt that the claimant could. In any event, the test is not what the claimant would have paid, but the rate at which persons with the general attributes of the claimant could have borrowed. The claimant refers me to particular first instance decisions, but all such cases turn on their own facts. Here I am satisfied that a small business like the claimant would have paid at least 4 or 5% over base rate. I consider 5% over base rate to be reasonable to allow for the first period.

The second period

[26]The second period As I have said, the second is governed by CPR rule 36.17(4)(b). This provides for an enhanced award of interest. Unlike for the first period, this is not merely compensatory. It is part of the consequences of not accepting the Part 36 offer. The intention is to encourage offerees to take seriously the offer of settlement. In OMV Petrom SA v Glencore International AG [2017] 1 WLR 3465, Sir Geoffrey Vos C (with whom Kitchen and Floyd LJJ agreed) said:
“38. In my judgment, the use of the word 'penal' to describe the award of enhanced interest under CPR Part 36.14(3)(a) is probably unhelpful. The court undoubtedly has a discretion to include a non-compensatory element to the award as I have already explained, but the level of interest awarded must be proportionate to the circumstances of the case. I accept that those circumstances may include, for example, (a) the length of time that elapsed between the deadline for accepting the offer and judgment, (b) whether the defendant took entirely bad points or whether it had behaved reasonably in continuing the litigation, despite the offer, to pursue its defence, and (c) what general level of disruption can be seen, without a detailed inquiry, to have been caused to the claimant as a result of the refusal to negotiate or to accept the Part 36 offer. But there will be many factors that may be relevant. All cases will be different. Just as the court is required to have regard to "all the circumstances of the case" in deciding whether it would be unjust to make all or any of the four possible orders in the first place, it must have regard to all the circumstances of the case in deciding what rate of interest to award under Part 36.14(3)(a). As Lord Woolf said in the Petrotrade case, and Chadwick LJ repeated in the McPhilemy case, this power is one intended to achieve a fairer result for the claimant. That does not, however, imply that the rate of interest can only be compensatory. In some cases, a proportionate rate will have to be greater than purely compensatory to provide the appropriate incentive to defendants to engage in reasonable settlement discussions and mediation aimed at achieving a compromise, to settle litigation at a reasonable level and at a reasonable time, and to mark the court's disapproval of any unreasonable or improper conduct, as Briggs LJ put the matter, pour encourager les autres.”
[27]The claimant asks for 10% over base rate (the maximum permissible). The defendant says that, if Part 36 consequences attach at all, the appropriate rate of interest is 5% above base rate, and that the “penal” rate of 10% above base rate is not justified in this case. It refers to OMV Petrom SA v Glencore International AG [2017] 1 WLR 3465, CA, where that rate was awarded, as a case where the court found that the paying party (the defendant) had run a dishonest and unreasonable defence. I do not accept that, in order to award the maximum rate of 10% over base rate, it would be necessary to find dishonesty or similarly serious conduct on the part of the defendant. Given that I have awarded 5% over base rate for the first period, there would be no enhancement for the second if I awarded the same rate.[28]In my judgment, the way in which the defendant has conducted this litigation has led to its being longer and more complicated (and therefore more expensive) than it need have been. There have been disclosure failures and interference with an expert’s evidence (see at [5] above). I am quite satisfied that, more by way of encouragement to do better in future, than as any kind of penalty for the past, it is appropriate to award interest on damages for the period from 14 November 2024 to 3 July 2026 at the rate of 10% over base rate.

Costs

[29]Costs General I turn now to costs.

(a) However, the court may make a different

[30]Here the defendant accepts that the claimant has been the successful party. But it says that the recovery of only a small part of the damages sought by the claimant (about 7% on the defendant’s calculation; about 25% on the claimant’s) justifies a different result. The defendant accepts the notion of an order in principle in favour of the claimant, but seeks a reduction of 25% on the costs awarded. It refers to the decisions in Islam v Ali [2003] EWCA Civ 612 and Fulham Leisure Holdings Ltd v Nicholson Graham and Jones [2006] EWHC 2428 (Ch).[31]In my judgment, the mere fact that the claimant recovers a quantum of damages less than was pleaded is not of itself a reason for making an order for less than the whole of the costs incurred. The claimant was obliged to bring its claim in order to recover anything, and has succeeded in principle. The costs of that success are much the same, whatever the quantum. If the defendant had sought to settle at or about the lesser sum actually recovered, that might have been different. But so far as I know the defendant did not even try. There is nothing to suggest that the claim made was a deliberate exaggeration. It was rather an over-estimate, in somewhat fluid circumstances. The main reason that the claimant did not recover more was because of a failure to mitigate its loss, rather than because it failed to prove one.[32]In Islam v Ali [2003] EWCA Civ 612, the claimant claimed £156,000, but recovered only £12,746.41. But the defendant was ordered to pay the claimant’s costs. On appeal, the Court of Appeal substituted an order that there be no order as to costs. Auld LJ said: And the other judge, Mummery LJ, said that the claimant’s “22. … Orders departing from the general rule are appropriate where the degree of success is substantially less than absolute.” “28. … claim for remuneration was advanced on the basis of an hourly rate of £40 an hour for very many hours. He failed at trial to establish the basis of that claim. In my judgment, in the exercise of his discretion, the judge failed to take account of that relevant factor.”[33]It is clear that the decision in that case was made, not because the Court of Appeal would have decided the costs question differently from the trial judge, but because that judge failed to take account of a relevant factor, namely, that most of the claim had simply not been proved. The decision in not authority for a broader proposition, such as that an award of damages much lower than claimed justifies no order as to costs.[34]In Fulham Leisure Holdings Ltd v Nicholson Graham & Jones [2006] EWHC 2428 (Ch), the claimant claimed £7.75 million, but recovered only £6,750. The judge decided that liability and causation/quantum were each a very significant part of the case, in terms of effort and costs split roughly 50:50. The judge held that the claimant had been substantially successful on liability but the defendants had been substantially successful on causation/quantum. Mann J said:
“11. … Since it is likely that the costs of each side were roughly equal, and since it is likely that the costs of each issue are likely to have been incurred in similar proportions on each of the major issues, I consider it to be appropriate to net the two orders off one against the other. That means that the appropriate order for the costs of the action … would be no order as to costs.”
[35]In the particular circumstances of this case, I do not consider that the failure to mitigate loss in the costs order should result in no order as to costs, or anything like that. Indeed, neither does the defendant, whose submissions are that the claimant should have its costs, but that they should be reduced by 25%. I note the points made in the defendant’s written submission of 15 July 2026, at [23], but I do not think they are as serious as the defendant seeks to make out (and in any event Mr Birrell’s lie, discussed at [28] of my main judgment, is not part of the litigation conduct). In the result, therefore, I will order the defendant to pay 90% of the claimant’s costs of the claim, to be subject to detailed assessment if not agreed.

Indemnity basis

[36]Indemnity basis The claimant seeks the assessment of its costs on the indemnity basis. Given the unbeaten Part 36 offer by the claimant, the claimant is entitled by rule 36.17(4)(b) to costs on the indemnity basis from 14 November 2024. That means that I do not need to consider the indemnity costs rules for that period. The rules answer the question. But I do need to consider the position on costs before that date.[37]An award of costs on the indemnity basis is generally appropriate where the behaviour of the paying party or the circumstances of the case take it “out of the norm”: Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hammer Aspden and Johnson [2002] EWCA Civ 879; Hosking v Apax Partners Ltd [2019] 1 WLR 3347, [42]. It is not necessary that the conduct complained of should have increased the costs recoverable by the receiving party. In Phoenix Finance Ltd v Fédération Internationale de l’Automobile [2002] EWHC 1242 (Ch), Morritt V-C said:
“It is plain, I think, from all three cases to which I have referred that the question is the reasonableness or otherwise of the conduct and is not dependent upon whether the conduct, whether reasonable or unreasonable, has increased the costs payable.”
[38]The claimant relies on three matters to take this case out of the norm, and justify indemnity costs. First, it says that the defendant defended the allegation that, contrary to representations made, the lathe was not new and that the defendant must have known that. The defendant said in opening written submissions that “There is not a shred of evidence to support a claim of fraud (or the alternative claim of negligent representation) which should never have been made” (at [4]). In fact, I did not need to, and did not, reach any decision on any cause of action in deceit. On the other hand, there was considerable evidence on the allegation of (absence of) newness, which entirely satisfied me, and the evidence that one might have expected to be available from the defendant was entirely lacking, in part at least because of destruction of documents by the defendant. I found that that the allegation was proved (see at [60] and [65] of my main judgment).[39]Secondly, the claimant says that the defendant defended the allegation that the lathe was not able to cut tapered edges, when it must have known that the lathe was indeed unable to do so. It advanced no evidence to rebut the allegation, including from its own engineering expert. This cried out for an explanation, but there was none forthcoming. I found that the lathe was indeed unable to cut tapered edges (see at [105] of my main judgment).[40]Thirdly, the claimant says that the defendant’s legal team “considered that it was appropriate to try to tamper with the expert evidence given by” the defendant’s expert. In addition, it says that there was destruction of relevant documents by the defendant. I dealt with these matters at [63]-[65], [83] and [94]-[95] of my main judgment, and referred to them at [5] above. I will not repeat what I said there.[41]Taking these matters cumulatively, I am quite satisfied that the defendant’s conduct has been sufficiently out of the norm to justify an award of costs on the indemnity basis for the period to 14 November 2024.

Interest on costs

[42]Interest on costs The claimant asks for interest on costs. The court has power to award this, as a matter of discretion: CPR rule 44.2(6)(g). But it is commonly awarded these days, and, if ordered, it generally runs from the dates on which the solicitors’ several bills were paid: Douglas v Hello! Ltd [2004] EWHC 63 (Ch), [24]. The rate is at large, and can be a commercial rate: ABCI v Banque Franco-Tunisienne [2003] EWCA Civ 205, [93]. In a case where, as here, there has been an unbeaten Part 36 offer, the consequence is as provided by CPR rule 36.17(4)(c) (set out above)). The claimant asks for 5% above base rate in the period up to 14 November 2024, and 10% over base rate thereafter. The defendant submits that 2% above base rate is appropriate, and 5% over base rate so far as rule 36.17(4)(c) applies. For the reasons already given in relation to interest on damages, I accept the claimant’s submissions.

Payment on account

[43]Payment on account The next question is that of a payment on account of costs. CPR rule 44.2(8) provides that:
“Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.”
[44]In Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm), Christopher Clarke LJ said of this rule:
“22. It is clear that the question, at any rate now, is what is a ‘reasonable sum on account of costs’… 23. What is a reasonable amount will depend on the circumstances, the chief of which is that there will, by definition, have been no detailed assessment and thus an element of uncertainty, the extent of which may differ widely from case to case as to what will be allowed on detailed assessment. Any sum will have to be an estimate. A reasonable sum would often be one that was an estimate of the likely level of recovery subject, as the costs claimants accept, to an appropriate margin to allow for error in the estimation. This can be done by taking the lowest figure in a likely range or making a deduction from a single estimated figure or perhaps from the lowest figure in the range if the range itself is not very broad.”
[45]In the present case, there was costs budgeting, and this provides a good starting point for the assessment of a “reasonable sum” within the rule. Here the claimant’s budget consists of two parts, costs already incurred by the time of the approval of the budget, and costs not by then incurred, but estimated for the future. The court approves the latter, but not the former. Hence the latter figure is more robust than the former. Accordingly, in deciding upon a reasonable sum, the court is likely to build in a greater margin of error in relation to the incurred costs than in relation to the estimated costs.[46]The claimant asks for £236,000. This is made up of 70% of the claimant’s budget incurred costs of £148,244 (about £104,000), and 90% of its budget estimated costs of £146,668 (about £132,000). Courts have allowed 90% of budgeted costs in the past: see eg Thomas Pink Ltd v Victoria’s Secret UK Ltd [2014] EWHC 3258 (Ch), [60]. The defendant in its written submissions says that that is too high given that the claimant has recovered only a small proportion of the value of its claim, and that the costs expended are disproportionate to the recovery. It suggests 50%. I do not agree. I have awarded the claimant 90% of its costs, and therefore I can see no reason not to order 80% of budget estimated costs (£146,668) here. As for the incurred costs, I think that 65% (of £148,244) is reasonable in the context of an approved budget, where the same legal team has been involved throughout. I therefore order a payment on account of £214,000.

The “additional amount”

[47]The “additional amount” Finally, there is the question of the additional sum to be ordered under CPR rule 36,17(4)(d) (set out above). I awarded the sum of £86,140, to which must now be added the interest set out above. The “additional amount” within the rule will be 10% of the total figure so found. I order the payment of this additional amount.

Conclusion

[48]Conclusion I should be grateful to receive a minute of order, preferably agreed, for approval.

order

CPR rule 44.2(2)(b). In deciding whether to make an order, and if so what, the court will have regard to all the circumstances, including “the conduct of all the parties” and any admissible offer to settle the case (not falling under CPR Part 36) which is drawn to the court’s attention: CPR rule 44.2(4).