PI Brief Update

A Costly Business: No Security for Costs of Detailed Assessment - Georgina Pressdee, Temple Garden Chambers

18/05/26. On 24 April 2026, Costs Judge Brown handed down his judgment in Magomedov v Rabinovich [2026] EWHC 962 (SCCO). The key question for consideration was whether the Court dealing with the assessment of costs has the power to order security for costs. The answer was a definitive no.

Background

The application was for security for costs in the sum of £336,000, representing 70% of the Applicants’ total costs of the detailed assessment proceedings. The Respondents (originally the Claimants) objected (inter alia) on the basis that the Court lacked jurisdiction. The underlying Claim had been brought against the Applicants together with 19 other Defendants. It consisted of two allegations of unlawful means conspiracy, with a total value of US$13.8 billion.

Procedural History

On 3 May 2024, Bright J awarded security for costs in favour of the Applicants in the sum of £1,162,000. Bright J also held that there was no jurisdiction to hear any of the Respondents’ claims. Costs orders were made in the Applicants’ favour on 17 January 2025, with substantial interim costs awarded on 17 February 2025. An application for disclosure in respect of the Respondents’ funding arrangements was subsequently granted with an order for the Respondents to pay the Applicants’ costs. Permission to appeal was refused, with a renewal application pending. The Applicants then served a Notice of Commencement of Detailed Assessment and a Bill of Costs of £4.2 million in respect of four orders made in their favour. The total interim payments amounted to £1.8 million.

Ruling

Costs Judge Brown ruled that the Court dealing with the assessment of costs does not have jurisdiction to award security for costs on the basis that there is no express power to do so and the parties have ample means of achieving security before the Court dealing with the substantive claim. Costs Judge Brown reasoned as follows:

1. Detailed assessment proceedings have their own particular procedure. There is no express power to grant security for the costs of detailed assessment nor any express importation of CPR 25. The only interim measure provided for is the power to order an interim certificate pursuant to CPR 47.16, which is itself a method of providing security for a claim.

2. Whilst CPR 25.2 permits the Court dealing with the substantive Claim to make an interim order after judgment has been given, the use of the word “interim” points to that jurisdiction being linked to the determination of the Claim rather than extending to any time after judgment or even in later cost proceedings.

3. Although costs Courts have certain implied powers (such as the power to order to disclosure), the power to order security for costs is not an ordinary case management power of the kind which is integral and necessary to the determination of disputes which arise in detailed assessment.

4. 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 security could be applied for and who would be regarded as the Claimant for these purposes. The change in the parties’ status to receiving and paying party in detailed assessment proceedings is indicative.

5. In contrast to where the Court is dealing with the substantive Claim, there is no obvious sanction to enforce an order for security in the detailed assessment proceedings.

6. Accepting jurisdiction to order security would import the risk of a substantial amount of satellite litigation. Further, there is good reason to believe that the jurisdiction would be used oppressively and give rise to disproportionate costs.

Image ©iStockphoto.com/JulPo