Bugsby Property LLC v Stewarts Law LLP [2026] EWHC 275 (SCCO) (16 February 2026)

Neutral Citation Number: [2026] EWHC 275 (SCCO) Case No: SC-2024-APP-000838

IN THE HIGH COURT OF JUSTICE

SENIOR COURTS COSTS OFFICE Thomas More Building, Royal Courts of Justice Strand, London, WC2A 2LL 16/02/2026 B e f o r e :

SENIOR COSTS JUDGE ROWLEY ____ Between: Bugsby Property LLC Claimant - and - Stewarts Law LLP Defendant ____ James Taylor (instructed by CANDEY) for the Claimant Robin Dunne (instructed by Stewarts Law LLP) for the Defendant Hearing date: 6 February 2026 ____

HTML VERSION OF APPROVED JUDGMENT ____ Crown Copyright © This judgment was handed down remotely at 10.30am on [date] by circulation to the parties or their representatives by e-mail and by release to the National Archives. .............................

SENIOR COSTS JUDGE ROWLEY Senior Costs Judge Rowley: The claimant instructed the defendant in respect of a claim against Legal and General and with the assistance of litigation funding companies, Therium and Omni Bridgeway. The claim was at least partly successful and the claim proceeds amount to £27.6 million. As is usually the case where litigation funding is involved, a "waterfall" arrangement was recorded to show the precedence of the distribution of the claim proceeds. In this case the relevant document is called the Amended Priorities Agreement ("APA") and which is dated 19 July 2021. That period in time coincided with the claimant disinstructing the defendant and instructing Signature Litigation instead. Consequently, the claimant, the two firms of solicitors and the two funding companies are all signatories to the agreement. It appears to be common ground that the sum recovered is not sufficient to meet all of the funding costs and all of the solicitors' charges as envisaged in the APA. The claimant relies upon a variation of the APA to entitle it to a share in the proceeds. The distribution of the claim proceeds is currently before an independent counsel, Andrew Onslow KC. I was told that he has received submissions from the various signatories and there is the opportunity for the parties to produce reply submissions within the next fortnight. The best estimate of the

time period in which Mr Onslow will be making a determination was given as perhaps in 4 to 6 weeks altogether. Until that distribution is resolved, the parties are apart as to whether the claimant will receive anything from the claim proceeds at all. The defendant says that there is no prospect of any recovery by the claimant, either under the APA or the variation agreement. The bill rendered by the defendant to the claimant amounts to approximately £4.5 million and roughly £2.5 million of those bills have been paid via Therium. On the basis that the claimant will not receive any sums to meet the remaining £2 million, the defendant says that these detailed assessment proceedings cannot have been brought for the ostensible reason of challenging the fees. The claimant says that it may have a share of the claim proceeds and that as such, the amount of fees charged by the defendant to it are as relevant as for any other client of solicitors. Consequently, these detailed assessment proceedings are no more than the usual challenge by a former client to its solicitor's charges via the Solicitors Act 1974. It is the claimant's position that it has no assets with which to pay the defendant's costs until such time as the claim proceeds have been distributed. Consequently, if the defendant is in fact right that the claimant has no entitlement to any of the claim proceeds, then it seems

inevitable that the costs assessed by this court would not be paid by the claimant over and above those which have already been met via the litigation funder. It is no surprise, therefore, that, whether the proceedings are bona fide, as the claimant says, or in fact a sham because they have been brought for some purpose other than the quantification of reasonable costs, as the defendant says, is a central issue. In the substantive proceedings, the claimant was ordered to pay £3 million by way of security for costs given the claimant's location in Delaware, USA, and having no assets in this jurisdiction. Upon the claimant making an application for an assessment of the bills it had received, the defendant was quick to state in correspondence that an application for security for costs would also be made in these proceedings. This judgment concerns the defendant's application for security for costs in the sum of £200,000 as a condition of the court exercising its discretion to order an assessment of the defendant's bills. In the alternative, the defendant seeks a stay of the order for assessment of the defendant's bill pending (at least) Mr Onslow's deliberations. There have been arbitration proceedings between the claimant and each of the litigation funders in respect of this matter. I am told those proceedings have been resolved and I was also told of the existence of a second

set of arbitral proceedings against Therium. These second proceedings were only described in the witness statement of Sam Clayton of the claimant's solicitors in the most general of terms and Mr Taylor, appearing on behalf of the claimant, was similarly constrained as to what he could say. In these circumstances, assertions that the outcome of the second arbitration could materially affect the claimant's position were not ones to which I could accord any meaningful weight. The defendant's choice of application is an unusual one, and indeed I am not aware of an application for security for costs in these circumstances. Neither party relied upon any authority which involved Solicitors Act 1974 assessment proceedings. The rarity may simply be because where a case falls under section 70(2) of the Solicitors Act 1974, the court is entitled to impose such conditions as it sees fit upon the assessment of the solicitor's charges, save in respect of pre-judging the incidence of the costs of the proceedings themselves. Where the client has paid little or nothing in relation to the bills by the time of the application, it is common for an order for an interim payment in respect of those costs to be made. If there is a potentially "knockout" blow which would cause the bills to be assessed at little or nothing, then such payment may be made into court rather than to the solicitors.

Otherwise, the payment is made on the basis that the reductions to the solicitors' bills based purely on an assessment of the time claimed, et cetera will not fall below a certain level. Indeed, given that section 70(9) guides the court to awarding costs to a party depending upon whether a reduction of more or less than 20% of the solicitor's bills has occurred, it is not difficult to see the sort of reduction that might be made absent any particularly fundamental challenges. In this case, the claimant has not put forward any specific indications as to the challenges it would wish to make to the defendant's bill and, therefore, I presume that it is simply a question of standard queries as to the time spent, number of fee earners involved et cetera. I was addressed on the detail of applications for security for costs under Part 25 at some length by Mr Taylor and Mr Dunne, who appeared for the defendant. Some of Mr Taylor's submissions raised the question of whether the court had any jurisdiction to deal with an application at this stage since the application was said to be proceeding under the Solicitors Act 1974, rather than the Civil Procedure Rules. I do not think that can be right and I do not take any support for this proposition from the judgment of Costs Judge Leonard in Warren v Hill Dickinson . His case concerned an application under section 70(1) where the client has

an automatic right to an assessment and Costs Judge Leonard was, in my judgment, simply pointing out that once the order for assessment had been made an application at a later point could be made under the CPR. In my view, these claims are dealt with under the CPR right from the beginning. It is a CPR Part 8 claim form that is issued and proceedings under Part III of the Solicitors Act 1974 are brought in accordance with CPR Part 67. This is hardly revolutionary (see e.g. paragraph 71 of Warren ) and it is the case throughout the civil jurisdiction that proceedings are brought using the rules of court with the jurisdiction of particular legislation used to determine the party's rights and responsibilities in respect of the individual case. As such, if I thought it appropriate to make an order for security for costs, then I do not have any doubt that I have the jurisdiction to do so. Furthermore, this seems to be the sort of case where an order for security for costs might be made in the same way as in the substantive proceedings. The claimant has a care of address in the Channel Islands, but remains a company incorporated in Delaware, USA and it seems common ground that it has no assets in this country. CPR 25.26(1) makes it clear that "any claim" can be the subject of an application for security for costs where either the claimant is outside the country or is a company that

appears to be without assets to meet a judgment. In this case the claimant is both located abroad and, on its own case, is without assets. The only reason that I do not consider that I need to make an order for security for costs is that I could achieve the same ends by the rather more common approach of making an order for an interim payment of costs in respect of the defendant. This would remove any vestige of concern regarding jurisdiction. I was told that such an approach was taken originally by the defendant, but the security for costs approach has overtaken it. That may be a choice by the defendant based upon its view of how the claim proceeds will be distributed. But, given the practical effect of an order for payment on account of costs to be made would have the same effect of protecting the defendant from incurring costs which it may well not otherwise recover in, for example, producing a breakdown of the bill already rendered, then I would propose to make the more standard order. It seemed clear from the submissions made that such a requirement to make an interim payment would essentially stay the proceedings until the issue of the claim proceeds distribution had been resolved. For the sake of completeness, I do not accept the argument put forward by Mr Taylor that, because the defendant has so far received around 50% of the value of the bills rendered, such sum is

necessarily sufficient by way of an interim payment and therefore the defendant could not properly seek any further payment at this stage. As I have indicated, there is no clue given as to the challenges the claimant wishes to make in respect of the defendant's bill. Whilst that might have been understandable when these proceedings were originally brought given the seeming lack of a statute bill, that position was remedied in June 2025 and, as far as I can see, no further elucidation of the claimant's concerns has occurred. Therefore, it seems to me that there is considerable scope for an interim payment to be made in addition to the sums previously paid by Therium. Whilst Mr Taylor sought originally to persuade me that the submissions of Mr Dunne that his client would be put to several hundreds of thousands of pounds in costs to deal with this matter to a detailed assessment hearing was overblown, my indication that I thought the drafting of the breakdown of costs on its own would probably be in the region of £200,000 caused the claimant not to challenge the quantum of the defendant's application for security for costs, but simply the principle of it. I have dealt with the security for costs / payment on account application at some length to avoid the need for it to be re-heard at a later date. But, it seems to me that, in fact, a stay is the most obvious order to be made in

respect of these proceedings. Hopefully, Mr Onslow will reach a view on the distribution of the claim proceeds in the relatively near future and the parties will be able to resolve their differences as a result. The question of whether the claimant has an entitlement to a share of the claim proceeds will presumably be clarified by Mr Onslow's conclusions. On that basis, I propose to stay the proceedings for three months and would be content to extend that stay if there is some hiatus in respect of Mr Onslow's deliberations. If the claimant does wish to pursue these proceedings further, then it can expect an order for an interim payment of £200,000 to be made upon resurrecting its request for an order for assessment. I am solely making an order for a stay at this stage so that there is no prospect of the complication of applications for unless orders for failure to pay the sum of £200,000 within a particular period coming before the court in the relatively near future. Similarly, whilst I will record the agreed sum of £3,000 in respect of the order for costs I made last year, I do not propose to deal any further with it. If these proceedings are to go further, then the defendant will receive £200,000 from the claimant. If the proceedings do not go any further, the defendant can seek to enforce the order now quantified. Finally, the claimant's arguments regarding the

undesirability of a stay of proceedings was essentially that the proceedings have not got very far in the 18 months or so, on which they had been on foot in this court. There is something in that, in terms of the statute bill only being produced after several months and that this application has then been dealt with as a preliminary matter before any order for assessment could be made. Nevertheless, it seems to me that the pace of these proceedings is more reflective of the uncertain nature of the claimant's entitlement to pursue these proceedings. The defendant is clearly not interested in pursuing them, unless absolutely necessary. The claimant has been unable to demonstrate up to this point that it has any money with which to meet the assessed bill either now or once the distribution has occurred. In these circumstances, whilst I have noted the correspondence between the signatories to the APA about concluding these proceedings to help with finalising the distribution, I do not consider that to be something which makes the court beholden to the wishes of the parties. As I have indicated the simple production of a breakdown of the bill in dispute here will cost perhaps £200,000 to produce. There is then the lengthy and costly production of points of dispute and replies before a hearing date which, based on the value of the claim, is likely to take a month of court time i.e.

around 20 days. That is not an allocation of the court's resources which should be provided without the court being satisfied that it is not an entirely sterile exercise. In respect of the costs of this application, it seems to me that the defendant is plainly the successful party, even though I have taken a slightly different view of the best way to proceed. If the parties are able to agree an order prior to the handing down of this decision, there will be no need for any attendance when that occurs. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII