Car-Wizard Ltd v Vixen Surface Treatments Ltd [2026] EWHC 685 (Ch) has become one of the more instructive commercial costs decisions of 2026, touching on expert evidence, Part 36 consequences, and conduct-based indemnity costs in a single dispute. HHJ Paul Matthews handed down his liability judgment on 26 March 2026. For costs practitioners, the final position is the one that matters, and it’s a rich one.

The Background

The claim concerned the supply of a vertical diamond cutting lathe to Car-Wizard Ltd, a small car wheel repair business based near Bristol, by Vixen Surface Treatments Ltd. Because the lathe was supplied through a third-party finance company rather than directly, the claim was framed in misrepresentation and breach of a collateral contract rather than straightforward breach of contract. Car-Wizard’s case was that the lathe supplied fell well short of what had been promised and was not, in fact, new. The judge found in Car-Wizard’s favour and awarded damages of £86,140.

The Expert Evidence Issue

Both parties relied on accountancy reports to quantify the claimant’s alleged losses. HHJ Mathews held that these reports, though helpful, did not amount to genuine expert evidence; simply applying arithmetic to data supplied by the parties is not expert opinion, and permission to rely on expert evidence at a case management conference doesn’t retrospectively convert inadmissible material into admissible opinion evidence. The judge treated the reports instead as aids to understanding a complex case, a useful reminder that expert reports must clearly distinguish genuine specialist opinion from calculation exercises a court could perform itself.

More seriously, the judge criticised the defendant’s expert on liability, who revised his opinion overnight after being encouraged by the defendant’s legal team to reconsider it in light of how the trial had gone. HHJ Mathews said he took “the gravest view of any interference with the opinion of an expert” who owes an overriding duty of independence to the court, regardless of which instructions came from where within the legal team.

Costs on the Indemnity Basis

Car-Wizard had made a Part 36 offer which it went on to beat at trial. Vixen argued the damages awarded shouldn’t be treated as beating the offer, on the basis that losses linked to one particular trade customer should be excluded from the comparison – an argument the judge rejected, both on the arithmetic and because Vixen had always understood how the claimant’s case was put. The usual consequences under CPR 36.17(4) therefore applied for the period after the offer expired, including indemnity basis costs and enhanced interest.

What makes this case worth flagging for costs practitioners is what happened for the period before the Part 36 offer expired. HHJ Mathews also ordered indemnity basis costs for that earlier period, a less common outcome, and one driven squarely by conduct rather than the Part 36 mechanism. The defendant had continued to defend an allegation that the lathe was not new when, in the judge’s assessment, it must have known this to be true. Combined with the interference with the expert witness, the overall conduct of the litigation was found sufficiently out of the norm to justify indemnity costs across the whole claim, not just for the post-offer period.

The judge was notably critical of how the litigation had been conducted more broadly, describing the process as “a longer drawn-out, far more aggressive and certainly more expensive” way of resolving the dispute than he was used to seeing, and awarded the claimant 90% of its costs overall.

What This Means in Practice

Car-Wizard v Vixen is a useful case to have in mind on two fronts. First, it reinforces that indemnity costs aren’t confined to the Part 36 mechanism; unreasonable conduct of a defence, particularly where a party defends a position it must know to be false, can justify indemnity costs for the whole claim, not merely the period after an offer expires. Second, it’s a clear warning on expert independence: any suggestion that a legal team has influenced an expert’s opinion, even informally, risks both the credibility of that evidence and the costs consequences that follow from conduct found to fall short of what the court expects.

Frequently Asked Questions

What was Car-Wizard v Vixen about?

A dispute over the supply of a vertical diamond cutting lathe to a car wheel repair business, framed as a misrepresentation and breach of a collateral contract because the lathe was supplied through third-party finance rather than directly.

Why did the court award indemnity costs before the Part 36 Offer expired?

Because the defendant’s conduct – continuing to defend an allegation it must have known to be false, combined with interference with an expert witness’s independence, was found sufficiently out of the norm to justify indemnity costs for the whole claim, not just the period covered by the usual Part 36 consequences.

Were the accountancy reports treated as expert evidence?

No. The judge held that reports which simply apply arithmetic to data supplied by the parties are not genuine expert evidence, even where permission for expert evidence had been given at an earlier case management conference.

What happened with the defendant’s expert witness?

The defendant’s expert revised his opinion overnight after being encouraged by the defendant’s legal team to reconsider it following how the trial had gone, which the judge treated as a serious interference with the expert’s duty of independence to the court.

How Greener Costs Can Help

Our team of costs lawyers and costs draftsmen advises on indemnity costs applications, Part 36 consequences, and costs arising from litigation conduct, for both paying and receiving parties across England and Wales.

If you’d like to discuss the costs implications of litigation conduct in an active matter, contact Greener Costs today. Call us Today on 01204 263047 or email info@greenercosts.co.uk.