Know Your ABCs: Alphabet (UK) Ltd v AXA Insurance and Pre-action Costs - Georgina Pressdee, Temple Garden Chambers

23/04/26. On 23 March 2026, Costs Judge Brown (sitting as a District Judge of the County Court) handed down his judgment in Alphabet (UK) Limited v AXA Insurance UK PLC [2026] EWHC 674 (SCCO). The Claim was for vehicle damages in the region of £12,000. However, the true subject of the proceedings (issued under Part 7) was costs. There were two issues to be determined:

1. Whether the proceedings were an abuse of process because there was no real argument as to the Claim for damages, which had already been paid.
2. Whether it was necessary for the Claimant to instruct solicitors within two months of the accident.

Background

The road traffic accident took place on 8 February 2023. By 28 March 2023, the Claimant had instructed solicitors. That date, the Defendant was notified of those instructions and presented with a Part 36 offer, along with an indication that the Claimant would seek its costs. The Defendant refused the Claimant’s bill of just over £1,000. Proceedings were therefore issued on 12 March 2024.

Ruling

Costs Judge Brown found that the Claimant was entitled to its costs but deferred the decision as to their amount until a later date.

Issue 1: Whether the Proceedings Were an Abuse of Process

This argument was not advanced forcefully by Counsel for the Defendant; the Judge concluded with good reason. In addition to well-established authority that a Claimant may issue proceedings to recover costs which the Defendant refuses to pay (Birmingham City Council v Lee [2008] EWCA Civ 891; Ayton v RSM Bentley Jennison [2018] EWHC 285; Moreira v French (HHJ Stewart, CC, 30 September 2008)), it was rejected on the basis that:

1. A Claimant would otherwise have no remedy where the Defendant had paid damages but refused to pay costs.
2. Part 36 envisages that a Claim may be settled pre-issue with the benefit of a costs order.
3. Part 45 envisages that where a Claim which would otherwise proceed on the fast-track settles prior to issue, the Claimant is ordinarily entitled to £599. There must be some means of obtaining that.

Issue 2: Whether it was Necessary for the Claimant to Instruct Solicitors

The Defendant’s submission on this issue was twofold:

1. The Claimant was a sophisticated corporate body that might be presumed to grapple with matters such as this regularly. This was contradicted by evidence from the Claimant that it frequently engaged solicitors to place it on an equal footing with major insurers and that it did not have an in-house lawyer.
2. The Claimant was too quick to instruct solicitors. Had the Claimant waited, it would have received an offer without incurring legal fees. This argument was rejected on the basis that it was predicated on hindsight and that appointing lawyers can lead to a more expeditious resolution.

Costs Judge Brown challenged the underlying assumption in the framing of this issue: that it had to be “necessary” for the Claimant to instruct solicitors. The Judge concluded there was no basis in law for such a high hurdle. Rather, the question was whether it was “reasonable” for the Claimant to do so. The fact that the Claimant was a commercial organisation with a degree of sophistication did not make it unreasonable for them to instruct solicitors. Expertise in car leasing was not tantamount in expertise in Claims for damages and it was not reasonable to expect the Claimant to have in-house lawyers. Further, it was not unreasonable for the Claimant to have instructed solicitors at a stage when much of the material relied on by the Defendant was not known to the Claimant and there had been no admission of liability. Consequently, the Judge was unable to conclude that there was any certainty at that time that the Defendant would have accepted an offer in the amount claimed.

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High Court Refuses to Play Ball: Footballs, Fences and Foreseeability - Georgina Pressdee, Temple Garden Chambers

16/02/26. This article examines the recent decision of the High Court to dismiss the Claimant’s appeal in Adam Lillystone v Bradgate Education Partnership [2025] EWHC 3341.

The Claim

The Claimant had sustained an injury to his hand on the Defendant’s premises – a football pitch surrounded by a 4.5m fence with a further 2-2.5m perimeter fence. After kicking a ball out of bounds, he climbed the locked perimeter gate to retrieve it and lacerated his hand on a metal burr at the top. He sought damages under the Occupiers’ Liability Acts 1957 and 1984.

The Claim was dismissed following a two‑day trial on liability. Whilst the Claimant was a lawful visitor, no duty was owed under either Act because he had accepted the risk, the premises were not dangerous, and the Defendant had no reasonable grounds to believe the danger existed.

Facts

HHJ Murdoch made the following findings of fact at first instance.

1. It had taken the Claimant 30–60 seconds from reaching the locked gate to assess the risks and climb over.
2. The burr which caused the injury was not known to either party and would not have been visible on reasonable inspection.
3. The fence was not dangerous and had been erected and locked for proper reasons.
4. The Defendant had no adequate system in place for ball retrieval, despite this being a known (although irregular) phenomenon, because it was not realistic for players to telephone and wait.

Grounds of Appeal

The Claimant appealed on the basis that HHJ Murdoch had erred –

1. By reaching a decision that was irrational and inconsistent.
2. In not finding that injuries flowed from the lack of safe means of retrieving the ball.
3. In not addressing the claim that the Defendant failed to conduct an adequate risk assessment.
4. In failing to find that the Defendant should have avoided creating the danger.
5. In concluding that the risks had been willingly accepted by the Clamant.

The Defendant invited the Court to uphold HHJ Murdoch’s decision but cross appealed on the basis that –

1. The Claimant was a trespasser when he climbed the gate.
2. The Defendant did have in place adequate measures for retrieving escaped balls.

Judgment: Appeal Dismissed

HHJ Murdoch’s finding that no duty was owed was upheld. The inherent danger lay in the act of climbing the gate, not in the gate itself, and it would be circular to impose a duty to prevent climbing by virtue of the failure to prevent climbing. In any event, the Claimant had a choice and the risks were obvious and had been willingly accepted. The lack of knowledge of the burr did not alter this conclusion; the Claimant had been wrong to assess the gate as climbable and climbing involved risks other than falling. Grounds 2 and 3 were dismissed on the basis that –

1. A risk assessment or signage would not have stopped the Claimant from climbing the fence; and
2. Causation was not the basis on which the Claim was originally dismissed.

HHJ Murdoch’s findings were, however, reversed in respect of both of the Defendant’s cross appeals. The fact that the Claimant’s actions were foreseeable did not mean that he had an implied licence to climb. No duty was owed under the 1984 act because the danger presented by the burr was not one the Defendant had reasonable grounds to believe existed or could reasonably be expected to offer protection against. Finally, there were adequate means of retrieving a ball – they simply required patience.

Comment

This judgment may instinctively feel correct – players prepared to a climb a 2-2.5 metre fence instead of waiting for the gate to be unlocked can expect injury. However, the conclusions are somewhat difficult to reconcile. On the one hand, the Defendant owed no duty under the 1984 Act because they had no reasonable grounds to believe the danger existed – the burr would not have been visible on reasonable inspection. On the other, the Claimant accepted the risk of that danger and the risk from the burr was obvious.

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Hire Education: Court of Appeal guidance on non-party costs orders against credit hire organisations - Michael Brooks Reid, Temple Garden Chambers

22/01/26. Michael Brooks Reid comments on the recent Court of Appeal judgment in Tescher v Direct Accident Management Ltd [2025] EWCA Civ 733, a decision which may signify a change of landscape in the world of credit hire litigation.

Facts

This judgment concerned two conjoined RTA claims. In each, an impecunious claimant had hired a replacement vehicle on credit, with payment deferred, in the usual way, until the conclusion of proceedings. The claims included both PI and credit hire elements. In Tescher, the claim was dismissed at trial; in AXA v Spectra, the claimant discontinued. In both, qualified one-way costs shifting (“QOCS”) protected the claimants from costs orders being enforced against them. As such, the defendants sought non-party costs orders against the credit hire organisations (“CHOs”), DAML and Spectra.

The Law

The jurisdiction to make a non-party costs order derives from section 51 of the Senior Courts Act 1981. In Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] 1 WLR 2807, the Privy Council distinguished between a “pure” funder with no interest in the litigation, against whom the discretion to make a third party costs order will not generally be exercised, and a non-party who does not merely fund the proceedings but substantially controls them or is to benefit from them. In the latter case, justice would ordinarily require that if the proceedings fail, they will pay the successful party’s costs.

CPR r 44.16(2)(a) provides for an exception to QOCS, where proceedings include “a claim which is made for the financial benefit of a person other than the claimant.” CPR r 44.16(3) expressly contemplates a costs order against that person, and Practice Direction 44, paragraph 12.2 lists “claims for credit hire” as an example of such a claim. Prior case law, including Farrell v Birmingham City Council [2011] RTR 14, had upheld non-party costs orders against CHOs, but uncertainty remained about the correct approach post-QOCS, particularly regarding the tests for causation and control.

The Decision

Giving the leading judgment, Birss LJ conducted an extensive review of the authorities, following which he gave detailed guidance on non-party costs orders in credit hire cases (from [65]).

The Court outlined a two-stage approach: first, the court should ask whether the jurisdiction to make a third-party costs order is engaged; second, it should determine the just amount to award.

On the first question, Birss LJ set out the features in this type of case which will engage the jurisdiction: (1) The claimant brings at least two claims, one for damages for PI and one for credit hire charges. (2) The claimant is impecunious, meaning the CHO cannot expect to recover the hire charges from the claimant. (3) The hire agreement defers payment pending the outcome of litigation, meaning litigation (or settlement) is the only realistic means by which the CHO will be paid.

In such circumstances, the Court held that the CHO is a “fundamental cause” of the defendant’s costs. A “but for” test of causation is not required. Who did or could appoint the solicitors is likely to be irrelevant; what matters is that, in reality, the CHO has effective (though not necessarily absolute) control.

Birss LJ concluded with a significant proposition of law: “…absent some reason why not, when a claimant has been ordered to pay the costs and QOCS applies, a non-party cost order against the credit hire company is likely.” [emphasis added].

On the second question, there were three obvious options: (i) an order for all the costs of the litigation; (ii) an apportionment based on the sizes of the credit hire claim and the PI claim; and (iii) an award of the extra costs attributable to the credit hire as compared to the litigation without it. Where the credit hire claim is several times larger than the PI claim, the usual order would be for all the costs of the litigation.

Comment

Tescher reinforces the obvious point that QOCS is meant to shield individual claimants from costs orders, not to shield third-party CHOs funding litigation for commercial gain. In reaching its decision, the Court of Appeal has clearly recognised the practical and economic reality of credit hire arrangements. The Supreme Court has already refused permission to appeal, so this will remain the state of play for the foreseeable future.

The Court gave clear guidance on the first question, but precious little guidance on the second question, apportionment. It seems likely that the first instance judge will be given a wide margin of discretion to apportion as they see fit.

CHOs and associated solicitors firms will no doubt be giving careful consideration to their business model, particularly in relation to providing impecunious claimants with credit hire vehicles where liability for the accident remains in issue.

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