Ziyavudin Magomedov & Ors v Mikhail Rabinovich & Ors

IN THE HIGH COURT OF JUSTICE

SENIOR COURTS COSTS OFFICE Neutral Citation Number; [2026] EWHC 962 (SCCO) SCCO REF. SC-2025-APP-001411 Case No: Thomas More Building, Royal Courts of Justice Strand, London, WC2A 2LL Date: 24 April 2026 Before: Costs Judge Brown - - - - - - - - - - - - - - - - - - - - - Between: (1) ZIYAVUDIN MAGOMEDOV (2) SGS UNIVERSAL INVESTMENT

HOLDINGS LIMITED (3) INTIMERE HOLDINGS LIMITED (4) HELLICORP INVESTMENTS

LIMITED (5) SIAN PARTICIPATION CORP (in liquidation) (6) MAPLE RIDGE LIMITED (7) WIREDFLY INVESTMENTS (8) SMARTILICIOUS CONSULTING

LIMITED

LIMITED (9) ENVIARTA CONSULTING LIMITED (10) PORT-PETROVSK LIMITED - and - (11) MIKHAIL RABINOVICH (12) ERMENOSSA INVESTMENTS

LIMITED (14) FELIX LP Claimants /Paying Parties/ Respondents to the application Defendants/ Receiving Parties/ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Applicants Mr. Thomas Mason (instructed by Fieldfisher LLP) for the Applicants Mr. Imran Benson (instructed by Seladore Legal Limited) for the Respondents Hearing date: 11 March 2026 Approved Judgment This judgment was handed down remotely at 2.00 pm on 24 April 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives. ............................. (Draft judgment circulated on 21 April 2026) Approved Judgment Costs Judge Brown: Magomedov v Rabinovich This is my decision on an application for security for the costs of the detailed 1. assessment hearing. It has been made in reliance on the terms of CPR 25.

2. It is, to say the least, an unusual application to be made in an inter partes costs assessment in this court (the SCCO). Neither advocate were able to find any cases on it, nor am I aware of any such application ever having been made in this court. Matters of security for costs are, at least normally, dealt with in the court dealing with the substantive claim.

3. The Respondents to the application (the Claimants in the original claim) object to the application on the grounds that the court lacks jurisdiction to consider the application and in any event should be dismissed on conventional principles. The court’s powers are limited to those set out in CPR 47 which provides that an order can be made in respect of the costs by way of an interim certificate. Mr. Benson, for the Respondents, said the normal way to obtain security for costs is by seeking an interim costs certificate. In any event by the terms of the provisions of CPR 25 the Respondents should be regarded as the defendants to the claim for costs and in principle the court cannot order security for a party that is in substance the claimant to a claim. Accordingly, it was not open to the Applicants (Defendants in the original claim) to seek security for their costs of the detailed assessment. Background The precise nature of the underlying claims is dealt with in the judgment of Mr Justice 4. Bright at [2025] EWHC 59 (Comm). It is not necessary for me to deal with them in any detail. In broad outline the Respondents made essentially two claims against the Applicants (the Defendants named above, referred to as the ‘Rabinovich Defendants’) together with nineteen other defendants. They were in respect of two alleged unlawful means conspiracies. The first is said to have involved

two other Defendants (not the Applicants) who allegedly conspired to cause the entry into an agreement to sell its indirect interest in a company to a Russian state-owned oil pipeline company (the Twentieth Defendant), for less than its true value. I am told that the Respondents claimed an estimated US$5 billion for the lost interest in this company. The second is said to have involved all of the Defendants (bar one) who allegedly conspired to wrest from the Respondents the control and practical ownership of their stake in one of the largest transport and logistic companies in Russia. In respect of this claim, the Respondents claimed an estimated US$8.8 billion for their stake (including, as I understand, an entitlement to acquire a further interest under a number of option agreements). Security for costs was awarded in favour of the Applicants by Bright J on 3 May 2024 5. in the sum of £1,162,000. Bright J rejected the Applicants’ alternative application for summary judgment or strike out against certain parts of the Respondents’ claim but at the same hearing held there was no jurisdiction to hear any of the Respondents’ claims. By order of 17 January 2025, he awarded the Eleventh and Twelfth Defendants 75% of their costs on the standard basis and the Fourteenth Defendant was awarded its costs on the indemnity basis. I refer to the schedule of costs orders concerning these

Applicants in the schedule that has been produced to me. A substantial award of costs was made on 17 February 2025 in favour of the Applicants, £1,162,000 (for D11 and D12) and £211,286 (for D14) on an interim basis. Approved Judgment Magomedov v Rabinovich The funding arrangements of the Respondents were said to be opaque. Following 6. Bright J’s judgment, a further application was heard by Bryan J for disclosure in respect of these arrangements. That application was granted and the Claimants were required to pay the Defendants’ costs. (I should perhaps say that the Applicants complained to me that the relevant documents which Bryan J ordered to be disclosed have not been provided but it seems to me, that if there has not been sufficient compliance of this order, that it is a matter for Bryan J and is not one on which I should make any determination.) Costs were ordered in the Applicants’ favour and an interim payment on account of some £73,116 was awarded on the disclosure application and a further interim payment of £32,312 was made in respect of a freezing injunction. Permission to appeal the decision of Bright J was refused. But as at the time of the 7. hearing of this application, a renewal application was due to be heard shortly. The Applicants have served the Notice of Commencement of Detailed Assessment and 8. a Bill of Costs at £4.2million in respect of four orders

made in their favour (there were two others in respect of an injunction application). As things stood at the hearing, there was no Request for a Detailed Assessment and Points of Dispute had not yet been served but were due to be served on 27 March 2026. It was put to me that total interim payments have been awarded in the sum of about £1.8m - which appears to be supported by the agreed schedule that has recently been provided to me (and helpfully produced at my request). I understand that the Respondents have had to seek extensions of time for payment of the sums due on some of the costs orders, but they have been paid. The application Security is sought in the sum of £336,000 or such sum in respect of the costs of the 9. detailed assessment proceedings which is 70% of the total sum of about £480,000. I am told that the Bill of Costs has been prepared at a cost of £220,000. It is also said that the assessment is estimated to last three weeks’ assessment and some £259,000 will be incurred for the preparing of replies, settlement negotiations and representation at the detailed assessment hearing.

10. The Applicants say there have been material changes of circumstances since the order for security; namely (1) a costs order made by Bright J, one of which was made on the indemnity basis; (2) the applications before Bryan J and his order; (3) the CPR 52.30 proceedings; and (4) an increased risk of non-payment of costs: the First Claimant is said to be incarcerated in a prison in Russia and has been made bankrupt, and further because the claim will end and there will be no incentive to pay costs if the Claimants are not granted permission to appeal the dismissal of their claim.

11. The Respondents accept that the ‘gateways’ applicable on an application for security are satisfied and do not say in defence to the costs claimed that it would be ‘stifled’ if an award were made in a suitable amount. I should say that although provided with this synopsis to the Bill of Costs, I have not 12. been provided with the Bill itself although it has been served on the Respondents. This was a matter of concern because although in general, on an application for security for costs, the court does not consider the merits of the claim there is no prohibition on the court doing so in an appropriate case. It is moreover normally possible to make a reasonable estimate of the amount of costs that will be recovered on a Bill, at least once Points of Dispute have been Approved Judgment Magomedov v Rabinovich served. I recall that in the course of the hearing I noted the failure to provide me with the Bill though the Applicants offered to provide the Bill at the hearing. Relevant provisions 13. CPR 25.1 enables the court to grant an order for security for costs as one of a list of “interim” remedies that a court may make. Under the heading Timing, CPR 25.2(1) provides that “an order for an interim remedy may be made at any time, including before proceedings are started or after judgment has been given, subject to any rule, practice direction or enactment which provides otherwise” (my underlining).

14. CPR 25.26.(1) provides: A defendant to any claim may apply for security for their costs of the proceedings.

15. CPR 25.27 provides that: The court may make an order for security for costs if — (a)it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; 16. 47.6 (1) is headed “Commencement of detailed assessment proceeding”. It provides: Detailed assessment proceedings are commenced by the receiving party serving on the paying party - (a) (b) notice of commencement in the relevant practice form; a copy or copies of the bill, as required by practice direction 47; 17. CPR 47.7 is headed “Period for commencing detailed assessment proceedings” and provides in terms: The following table shows the period for commencing detailed assessment proceedings. Source of right to detailed assessment Judgment, direction, order, award or other determination Discontinuance under Part 38 Acceptance of an offer to settle under Part 36 Time by which detailed assessment proceedings must be commenced 3 months after the date of the judgment etc. Where detailed assessment is stayed pending an appeal, 3 months after the date of the order lifting the stay 3 months after the date of service of notice of discontinuance under rule 38.3; or 3 months after the date of the dismissal of application to set the notice of discontinuance aside under rule 38.4 3 months after the date when the right to costs arose Approved Judgment Magomedov v Rabinovich 18. CPR 47.8 sets out the sanction for delay in commencing detailed assessment proceedings.

19. CPR 47.10 deals with the procedure where costs are agreed. There is no procedure for obtaining judgment by default, the procedure in costs proceedings is to obtain a default costs certificate if points of dispute had not been served in accordance with the rules.

20. CPR 47.14(1) under the heading Detailed Assessment Hearing provides that where points of dispute are served in accordance with this part, the receiving party must file a request for a detailed assessment hearing within three months of the expiry of the period for commencing detailed assessment proceedings.

21. Under the heading Power to issue an interim certificate CPR rule 47.16 provides: The court may at any time after the receiving party has filed a request for a (1) detailed assessment hearing – (a) or (b) issue an interim costs certificate for such sum as it considers appropriate; amend or cancel an interim certificate. (2) An interim certificate will include an order to pay the costs to which it relates, unless the court orders otherwise. (3) court. The court may order the costs certified in an interim certificate to be paid into I was correctly reminded by Mr Benson of the Overriding Objective which requires the 22. court to deal with cases justly at proportionate cost, ensuring that cases are dealt with expeditiously and fairly allotting to the case an appropriate share of the court’s resources. This was in support of a point that there are good reasons why the court is not granted any power to order security the way claimed. If it were, parties would likely embrace such a jurisdiction with enthusiasm and there would be a risk, if not a very high prospect, that such a jurisdiction would be used oppressively and that a great deal of time would be taken up in the SCCO dealing with such applications. Is there jurisdiction to make the order? Is the applicant to be treated as defendant to the claim in respect of an application for security for costs in the SCCO? I was referred to a significant amount of authority on these two issues and they seem to 23. be intertwined, so I have dealt with them together. It has also been necessary on the parties’ arguments to go back to first principles - at least to some extent.

24. As is well known and as Lord Millet explained in CT Bowring v Corsi & Partners [1994] BCC 713, the purpose of the jurisdiction to order security for costs is to prevent “the injustice which would result if a plaintiff who was in effect immune from orders for costs were free to litigate at the defendant’s expense even if unsuccessful” [724-H].

25. He went on to say: Such an order can be made only against a plaintiff; it cannot be made against a defendant. That is because a plaintiff institutes proceedings voluntarily. If he Approved Judgment Magomedov v Rabinovich chooses to bring proceedings against an insolvent company with limited liability, he does so with his eyes open; he takes the risk that he may not recover his costs even if successful, but it is his own decision to take that risk. The defendant, however, has no choice in the matter. He is compelled to litigate or submit to the plaintiff’s demands. He must be allowed to defend himself without being subjected to the embarrassment of having to provide security for the plaintiff’s costs.

26. And at [727-E] said this: It has long been firmly established by authority that the court cannot award security for costs against a defendant, and that in considering whether a party is a plaintiff or defendant the court must have regard to the substantial and not the nominal position of the parties. The question in every case is whether the party against whom an order for security is sought is in the position of plaintiff in the proceeding in question.

27. An order for security for costs is plainly intended to protect a defendant who is compelled to defend a claim at risk that it will not be able to recover its costs of doing so. The order seeks to address that risk by providing for a fund against which that party can enforce any award for costs they may later obtain (see the editorial note in the White Book at 25.26.1). The obvious sanction which may be deployed to enforce such an order is the striking out of the claim. In JSC Karat v Tugushev [2021] EWHC 743 (Comm), Cockerill J, as she then was, set 28. out the following principles which were derived from GFN SA and others v Bancredit Cayman Limited [2010] Bus LR 587 (and were said not to be in issue): i) The Court has an inherent jurisdiction to order security for costs. That jurisdiction is essentially discretionary, but must be exercised not merely in a generally judicial manner but in a manner which accords with the settled practice of the court as circumscribed or extended by … legislation”: Lord Neuberger at [30]. In deciding whether an application falls within the court’s power to order ii) security, the court must look at the substance of the application rather than its strict form: Lord Neuberger at [31]. iii) Applications made within the forensic framework of other proceedings or for which other proceedings are the procedural launch pad can be essentially

free- standing and originating proceedings in substance, and can be the basis for an application for security for costs: Lord Neuberger at [32]. iv) An order for security for costs can be made against an applicant making an application which, although interlocutory in form, raises issues as to the rights of the parties which are in substance “independent of the issues in dispute in the parent action”: per Lord Scott at [26]. v) On the other hand, an application which constitutes a mere formulation of the applicant’s defence or goes no further than is reasonably necessary to resist a claim cannot be the basis for an application for security for costs: GFN per Lord Scott at [22], per Lord Neuberger at [31] – based on the settled practice Defendants cannot be forced to produce security for costs. Approved Judgment Magomedov v Rabinovich In the case of an enquiry on a cross undertaking in respect of a discharged injunction 29. case, the claimant and applicant for the injunction will not be regarded as a defendant to claim on the enquiry for purposes of security (see Bowring, JSC Karat). The enquiry is properly to be regarded as ancillary to the claim. As Lord Millet put it, Although the defendant is claiming monetary compensation for loss which it alleges it has sustained as a result of the injunction, it has no independent cause of action to recover such loss. It cannot bring

separate proceedings, whether by writ or counterclaim in the existing proceedings. Its claim arises out of and is wholly dependent upon the plaintiffs cross-undertaking. Its only remedy is to enforce the cross-undertaking by applying under the liberty to apply in the proceedings in which the cross-undertaking was given. Analogies tend to be imperfect, but the closest analogy which occurs to me is the enforcement by a successful defendant of an order for costs made in his favour. Security for the plaintiff’s costs of resisting enforcement would not be ordered for other reasons, but I cannot think that such a defendant could properly be regarded as being in the position of a plaintiff.

30. Whilst affirming the general rule that the court will not exercise its discretion in favour of an applicant when that party is not in substance the defendant (see [34]), this analysis was confirmed by Cockerill J in JSC Karat. She held in similar circumstances that the enquiry into damages was all part of the “working out” [38] of the ordinary claim on the cross undertaking. It appears clear from a number of decisions that when dealing with the substantive 31. claim a court can order security for the costs of the detailed assessment proceedings as costs of proceedings (MAN Nutzfahrzeuge AG v. Freightliner & Ors [2007] EWHC 247 (QB) – see too Excalibur Ventures v. Texas Keystone [2013] EWHC 4278 (Comm), Republic of Djibouti v. Boreh [2016] EWHC 1035, Alta Trading UK v Bosworth [2025] EWHC 1097). Thus, while the costs sought under a costs order may be seen as a ‘claim’ by a winning defendant against a losing claimant, the costs of detailed assessment proceedings may form part of the security that the court provides to a defendant in a claim. Although, as I understand it is not expressly stated, the decisions appear to assume “proceedings” in CPR 25.26 (2) must be understood as including the detailed assessment proceedings for the purpose of determining the amount of security, presumably on the basis that such proceedings are ancillary to the main proceedings, or as it may be

put, the assessment of costs are part of the ‘working out’ of the substantive claim. It does not however follow that merely because the court dealing with the substantive 32. claim could include such costs as part of the security that the court in the detailed assessment proceedings can be assumed to have the same powers under CPR 25.2, rather than the more limited power under CPR 47, once the claim has been determined.

33. As is well known the meaning of the term ‘proceedings’ depends on its statutory context and on the underlying purpose of the provision in which it appears (Plevin v Paragon [ 2017] UKSC 23, per Lord Sumption). In Serbian Orthodox Church - Serbian Patriarchy v Kesar & Co [2021] EWHC 1205 (QB), Foxton J, as he then was, held that detailed assessment proceedings were a distinct phase of the proceedings, not an originating process ([56]). He did so for the purposes of deciding whether service had taken place for a Notice of Detailed Assessment proceedings. However, the court was not addressing the issue as to Approved Judgment Magomedov v Rabinovich whether for other purposes costs proceedings may be regarded as separate from the substantive proceedings, in particular for the purpose of deciding whether the terms of CPR 25 apply (which, I might add include powers plainly not incidental to the jurisdiction of the costs judge in detailed assessment proceedings).

34. As appears from the provisions which I have set out above, detailed assessment proceedings have their own particular procedure They do not set out expressly any power to grant security for the costs of detailed assessment, nor is there any express importation of CPR 25. The only interim measure provided for is the power to order an interim certificate and this itself is a method of providing security for a claim. Indeed, whilst CPR 25. 2 permits the court dealing with the substantive claim to make 35. an interim order “after judgment has been given”. The use of the word ‘interim’ in CPR 25 at least points to the jurisdiction to make such orders being linked to determination of the claim which the court is then dealing with. It is perhaps difficult to read “after judgment” as extending the power so that it can be used at any time after judgment and even in later cost proceedings (rather than as part of the process of giving judgment).

36. Moreover, whilst it seems to me clear that the court does have power to order disclosure under its case management powers or CPR 31 (see Edwards v Slater and Gordon [2022] EWHC 109 in a Part 8 claim) and generally to order a Part 18 request for further information even though here the power might not be expressly set out, the power to order security is to my mind qualitatively different from ordinary case management powers. The former are rather more obviously case management powers which are integral and necessary to the determination of disputes which arise in detailed assessment, whereas it seems to me that orders for security on claims which have already been determined, are not.

37. To my mind, had it been intended that there should be a power to make orders for security in detailed assessment proceedings the rules would have said so expressly and made clear the circumstances in which it could be applied for, and indeed who is be regarded as the defendant and who the claimant for these purposes (as the rules do in respect of Part 36 offers, see CPR 47.20(4)). The previous status of the parties as claimant and defendant for the purposes of the CPR rules is changed in detailed assessment, so that the parties are referred to as receiving party and paying party. And whilst the fact that the parties are renamed may not be decisive, it is indicative. Indeed, it points to another problem which is that if the Applicants were right that they should still be regarded as the defendants and CPR 25 did apply independently in costs assessment, then both parties might be able to apply for security (as the receiving party might say they were the defendant to the claim for costs). This would seem to be a highly improbable interpretation. Indeed it seems to me that if CPR 25 had been intended to apply, the rules would have 38. dealt with the difficult issue as to the point at which a claim for costs ceases to be merely ancillary to the original substantive claim (per GFN at (v) above) and as to whether the court is imposing security for a claimant on a claim – which it

is clear the court should not, at least in general, do. Further, and importantly, in contrast to the position when the court is dealing with the 39. substantive claim there is no obvious sanction to enforce an order for security. Mr Mason did not show me any basis in law for striking out Points of Disputes (which are not, as I understand it, regarded as statements of case, not being documents which require a statement of truth). In any event it seems to me in many instances such an order might be a disproportionate sanction. Approved Judgment Magomedov v Rabinovich There are perhaps other points to be made. There is, for instance, no obvious need for 40. any power to order security in detailed assessment proceedings given the wide powers of the court dealing with the substantive claim. Indeed it is far from the ordinary role of the costs court to deal the issues such as the ‘gateways’ and broader considerations which might apply in the event that there were risks of stifling - issues which are outside the SCCO’s normal remit. Indeed, it is difficult to see how the Costs Court can readily determine whether there has been a material and sufficient change of circumstances when it is not the court dealing with the substantive claim. These can be expensive and time-consuming applications. It is well recognised that an order for interim payment is a form a security

Excalibur 41. Ventures v. Texas Keystone [2013] EWHC 4278 (Comm) at [77] - where it was considered to be an alternative to awarding security for the costs of detailed assessment1. The court thus has the express power to provide security by way of an interim costs certificate. In the circumstances, and for the reason set out above, I am not persuaded that I can read into these provisions, which are at least intended to be part of a self-contained code for detailed assessment, powers that go beyond that.

42. On this point - following GFN - the court can look to the settled practice of the court and, as I have indicated, it does not seem to me that there is any practice of the court making such orders in inter partes claims. Whilst there is always a first time, as Mr Benson pointed out, if I were to accept that the Applicants were right, it would be effectively to import or instigate the risk of a substantial amount of satellite litigation. Had there been such a jurisdiction it would surely have been enthusiastically employed to ward off any challenge to the claim for costs. Indeed, there is good reason to believe such a jurisdiction would be used oppressively and would give rise to disproportionate costs. To my mind, concerns of this sort strongly weighs against what seems to me a novel interpretation of the rules.

43. This application appears to have generated some £150,000 in costs. Costs proceedings are intended to be costs efficient (and afford access to justice in circumstances where parties are often depleted in resources). Mr. Mason was right to say that in this case the receiving parties party had no choice but to defend the claims. That may often be the case. And I accept that there are circumstances where a defendant to a claim may not fully protected in respect of the costs of detailed assessment. But it seems to me that there are ample means of achieving security before the court dealing with the substantive claim. That must in itself be good reason for rejecting an application for security. In the circumstances, I am not persuaded that the court dealing with the assessment of 44. costs does have power to order security, But, even if there were technically a jurisdiction to, it seems to me that the position is akin to a lack of jurisdiction and for the reason set out in the preceding paragraph I should in limine refuse the application. I should perhaps add - if only for the sake of completeness - that I was initially referred 45. to two decisions in Solicitors Act assessments (Bugsby v Stewarts Law [2026] EWHC 275 and Pickering v Thomas v Mansfield [2025] EWHC 3021) in which, although the applications for security were rejected by the court, it appears that it was accepted

that CPR 25 applied. Whatever the position under the 1974 Act, to my mind neither case really assists 1See too, Republic of Djibouti v. Boreh [2016] EWHC 1035 (Comm) at [26]; Stokors SA v. IG Markets Ltd [2012] EWHC 1684 (Comm) at [30]; see Republic of Kazakhstan v Istil Group [2005] EWCA Civ 1468; [2006] 1 W. L. R. 596 at [34]-[35]. Approved Judgment Magomedov v Rabinovich in dealing with the inter partes position – as both sides appeared to accept. Section 70 of Solicitors Act 1974, it seems, might be said to be a self-contained code which is distinct from CPR 25. Section 70(2) specifically prohibits a court from imposing terms as to “the costs of the assessment” when ordering an assessment within twelve months of delivery of the bill; whilst appearing to permit the court to impose terms as regards the costs of the assessment in section 70(3) when special circumstances are required for an assessment. To my mind these provisions would appear to be inconsistent with the importation of CPR 25 into such proceedings. Indeed it strikes me that the true position is that the solicitors are making a claim for their costs (and Part 8 is merely the procedure that may bring the assessment to the court) 2 so that based on the principles that underlie CPR 25 they cannot get security. However, given that in the event, neither party placed any particular reliance on these decisions, it is not necessary for me to deal with this in any further detail. Material change of circumstances/discretion 46. Obviously these considerations only arise if I were wrong about the above.

47. A defendant may obtain an order seeking an increase in security previously allowed if they can justify the further increase by reference to a material change of circumstances; and if the defendant proves such a material change of circumstances the court has a discretion to recalculate afresh the totality of the security (see Excalibur, Stokors SA v IG markets [2012] EWHC 1684). I am not however satisfied in this case that there has been any adequate or substantial change of any substance justifying the revisiting of the security for the costs of detailed assessment. Whilst the Applicant may be able to identify some change or changes, these are at best slight. Indeed, as a matter of discretion, I am firmly of the view, in the particular circumstances, that I should not revisit it. Indemnity costs order : I accept that when a court is dealing with the substantive claim, 48. the award of costs on an indemnity basis may amount to a material change of circumstances. Of course the court might make such an order where the unreasonable conduct for the claimant prosecuting the case is much more demanding than anticipated. However not only is it not at all clear on what basis the security was granted in this case, I am not confident what, if any, difference it would make to the amount of the required security. Proportionality is unlikely to be a factor. Whether on the indemnity basis

or standard, the court is required to determine the reasonableness of the costs (see CPR 44), and the court is required to apply an objective standard of reasonableness when deciding whether costs have been reasonably incurred. In many cases the court may have little doubt about the reasonableness of the costs it is to award so that there is no need to exercise any doubt in favour of the receiving party. The basis of assessment may thus make no difference. Often it will but not necessarily so. Beyond referring to the award of costs on an indemnity basis, Mr Mason did not provide me with any clear basis for thinking that the basis of assessment would necessarily effect the 2The decisions proceed on the basis that the client was making a claim against the defendant solicitors when seeking an assessment - whereas to my mind, more obviously the substantive position is at least when a solicitor’s bill has been delivered, it is the solicitor who is making a claim on their bill, and in general the rule that a party making a claim cannot get security costs applies. I am not sure that the position can be worse for the client when the client makes an application by Part 8 under the 1974 Act (which is intended to provide a degree of consumer protection to the client)) than it would be if the claimant solicitors had brought ordinary Part 7 proceedings seeking judgment on their bill (when

the solicitor plainly is the claimant). Approved Judgment Magomedov v Rabinovich extent of the security required. In any event the place for this point was before Bright J not at this stage of the costs proceedings. of Bryan J : If this changes anything it is marginal, as a substantial interim 49. The order payment has been made against the costs of the disclosure application and a freezing injunction application at £105,429 in respect of these Applicants alone –(against an award of just over £666,000 in respect of the Defendants who also joined with the application). The judge may well have taken the view that the award of such an interim payment provided adequate security generally. The further difficulty again with this is the failure to explain why the matter was not raised before the judge who would have been in a far better position to deal with it. In any event additional costs associated with the detailed assessment of perhaps relatively short applications in a detailed assessment would, I anticipate, be modest indeed. To my mind this cannot justify a general revisiting of the amount of security. Part 52.30 application 50. of other applications and I was not addressed on this. It had not been heard at the time of the hearing and presumably the costs of it were not in the Bill. : Plainly it is not for this court to give security in respect of a host . I accept that if

permission to appeal is refused the Respondents may no 51. Greater risk longer have an incentive to comply because judgment has already been given. But security is not as I understand it set as function for risk, i.e. the higher the risk then the higher the award. Once the gateways are established and there is a risk of, say, non-payment then full security is provided (if it were otherwise there would be application to the court to adjust the security every time there was a significant change in risk). Mr Mason did demur from my suggestion that security in this case has been set on such a basis. Accordingly, I do not accept that the matters relied on are sufficient to justify revisiting the security. Discretion generally 52. In any event I would reject the application in my discretion.

53. Firstly, (and to repeat a point I have already made in a different context) it seems to me that the Applicants could have raised these matters before Bright J, or indeed before Bryan J, in any event when the Court was concerned with the extent of the interim payment. No adequate explanation as to the failure to raise this at an earlier stage has been provided. Secondly, the fact that the Applicants recovered only 75% of their costs before Bright J 54. seems to weigh in favour of reducing the amount of security and may be a reason why the Applicants were content with security as it was (if that had been the case). In any event, this confirms my view that I would not have increased the security now.

55. Thirdly, there is no obvious nor appropriate sanction if the Respondents do not comply with an order of payment into court. I stress that Mr Benson was not saying that the Respondents would not pay any security ordered but if the Respondents did not pay there would need to be consideration of the sanction. Such a consideration led the court to refuse security in Dar International FEF Co v Aon Ltd [2003] EWCA Civ 1883. The order I am asked to make does not include any unless provision, and I remain unclear as to what effective sanction that might be by way of an unless order; it is difficult to see particularly on the facts of this case what effective and proportionate measures would follow next if no Approved Judgment Magomedov v Rabinovich payment were made. In this case the striking out of the Points of Disputes (even if I had jurisdiction to do this) is liable to be disproportionate. The benefits of a Days Healthcare order (depriving of paying party representation at any detailed assessment hearing or the right to attend) are, my experience would suggest, highly questionable. In circumstances where the costs of further hearings on this issue are likely to be substantial, and disproportionate, such concerns must weigh against the order in the first instance. Fourthly, although in general it is not appropriate to consider the merits of claim when 56. dealing with a claim

for security, in a costs claim the court may be in a good position to form a relatively clear, albeit necessarily provisional, view as to the amount reasonably recoverable (when making an interim costs certificate). Bryan J appeared to take the view that at least some of the Applicants had a real prospect of recovering more than the amount allowed by way of interim payment. Neither party suggested I was bound by these views and that I could not exercise my own judgment. But in any event things have moved on since then. The Applicants have produced a Bill of Costs. I have not been shown it and could have been shown it. The decision not to produce it to me in the hearing bundle seems to me significant. It was later offered by the Applicants at the hearing. It would no doubt take time to consider this Bill but it should provide details of the claim and I could then perhaps have taken a reasonable view as to likely reasonableness of the costs claims and possibly a more informed view than the court ordering the original interim payment.

57. I should however make clear my concern about the amount of costs claimed. The hearing before Bright J proved to be lengthy and the issues arising appear intricate but these applications were interlocutory, not trials. I am told that fees for counsel were some £800,000. They may of course be justified but this is a large sum when seen particularly in the context of the fact that much of the work was or would have been shared with other Defendants. There is quite possibly a remarkable increase in the solicitor’s costs (the profit costs) from the costs intimated by an open letter dated February 2025 and the Bill of Costs (I accept that the open offer in that letter may have had written into it a deep discount for the risk of non-payment). However if the statement of costs on the application I was dealing with (and the number of the attendance of fee earners at the hearing) is anything to go by, it would suggest that the costs claimed in the substantive matter may be very substantially reduced. In any event there is no reliable standing or predicable measure of a disallowance on an assessment of costs whether on a standard basis or on an indemnity basis (by percentage or otherwise) - each claim depends on its facts. Obviously, reductions for unreasonable multiple - fee-earner attendance, duplication, administrative work on bundles etc (not properly chargeable) can give rise to

a large reduction of costs. I note that costs of preparing the Bill are put at £220,000; at, say, £135-40 per hour for 58. a Grade D costs draftsman that would equate to over 40 weeks’ work (at 24/25 hours per week). I appreciate the hourly rate may be open for debate and there might be some involvement of higher grades of fee earner. Nevertheless these figures appear to be very concerning in a case where substantial time has already been spent dealing with costs, preparing for the security of cost application, the statements of costs for the interim costs application and in circumstances where the solicitors might reasonably be expected to have kept reasonable ledgers which will have been provided in detailed bills to their clients. I accept of course, by reference to the CPR 44.4(3) factors, that the sums involved in 59. this claim were huge and I would anticipate it will be said that the claim was of considerable importance to the parties, without the Bill of Costs and without Points of Dispute. Approved Judgment Magomedov v Rabinovich Nevertheless on my own findings it is difficult to form a view with any confidence that the further security sought is reasonably necessary for the “working out” of the claim (per GFN, JSC Karat) or whether it is security to pursue a significantly overstated claim for costs. My concern is that it may be the latter but, in any event, unless I

am confident that it is the former, it seems to me even if I had jurisdiction it is plain from first principles that I should not in my discretion grant it. For all these reasons, even if I were wrong to reject the claim on the grounds of 60. jurisdiction (or those akin to it), for these reasons, whether in aggregate or individually, I would have rejected this application. Amount of Security It is impossible to say with any confidence how long a detailed assessment in this case 61. will take - certainly without Points of Dispute. However neither party was suggesting that there were any particularly difficult features to the assessment. I can see that junior costs counsel might be instructed to deal with hourly rates, if in 62. dispute, and counsel’s fees. But such counsel might reasonably be expected (on hourly rates of circa £250 - £325 per hour) possibly for one day, so that I might put the fee at about £7- 9000. One might reasonably expect costs draftsman and/or a costs lawyer to be primarily concerned with the Replies (if any are required). Such an individual/individuals having (one might assume) been involved with preparing the Bill of Costs, and having already considered the underlying files, would be familiar with the documentation, and could ordinarily be expected to deal with the rest of the assessment.

63. There will be work preparing the files for submission to the court and ordinarily a short inter partes bundle. However, files can be expected to be in good order. Those files should not, as I understand it be filleted- the full files should be provided to the court. It should not take a costs draftsman familiar with the files long bookmarking the relevant documentation (often in PDF form) so that they can be shown to the assessing judge. I think most experienced costs lawyers or cost draftsman who are involved with this sort of work on a regular basis would acknowledge that perhaps the most demanding element of this part of the assessment is retrieving the relevant documents and if they cannot be found, explaining their absence (typically attendance notes). But in any event the assessment generally just involves going through the documents, most of which speak for themselves, and by process of sampling and extrapolating reasonable sums (per Nigeria v Global Partners [2026] EWCA Civ 25 at [46]), a well-ordered file should not take a long time to assess. I indicated that detailed assessment in this case - assuming the typical points are taken 64. might be nearer 5 days. That is if the file is well ordered and the representation effective. That may be optimistic. It could take longer. If a long time is spent explaining why documents have not been produced to the court pursuant

to the normal order for production (as now regrettably happens with frequent basis), it could take substantially longer but that will be a matter which might lie at the door of the receiving party. But in any event dealing with the ‘nuts and bolts’ of the assessment is rarely for counsel and normally appropriate for a costs draftsman or a costs lawyer, with limited involvement of the more senior fee earners. Approved Judgment Magomedov v Rabinovich In short I would reckon the future costs of the detailed assessment for the purposes of 65. the security to be nearer to the relatively low £10,000s. I might note that this is a fraction of the costs said to have been incurred (albeit by both parties) in the application. It follows from the above that even if I had been persuaded to give further security, I 66. would not have done so on the basis of the estimate of costs provided by the Applicants. It is very difficult to estimate the costs of a detailed assessment in circumstances where I do not have the Points of Dispute. I cannot see however why I should not assume that the assessment would be undertaken in an efficient manner and the underlying files are well kept and in order. But whatever the reasonable figure it strikes me that it is a sum that is as likely to fall within a margin of error on the initial award of security for costs or the awards of interim payment costs - a matter which might confirm my concerns about proportionality and the decisions I have set out above.