Lemos & Ors v Church Bay Trust Company & Ors [2026] EWHC 2402 (SCCO) is a genuinely instructive decision on the limits of CPR 47.20, and specifically on whether a paying party can use it to shift liability for the costs of a detailed assessment onto their own ATE insurer’s appointed costs handler. Costs Judge Nagalingam’s answer is a firm no, and the reasoning is worth understanding for anyone advising paying or receiving parties in ATE-funded litigation.

The Background

The underlying claim was brought under section 423 of the Insolvency Act 1986 and concluded with an order that the claimants pay the defendants’ costs of the action, to be assessed on the standard basis if not agreed. A payment on account of £957,814 was made in 2023, and detailed assessment proceedings followed.

For a period, the second and third claimants’ ATE insurer’s costs handler took conduct of the costs negotiations on their behalf, and was later formally joined to the proceedings as an Interested Party. Following a preliminary issues hearing on costs budgeting and a change back to the claimants’ original solicitors, the defendants’ costs claim was ultimately settled at £1,011,135.40, considerably below the figure originally claimed.

Having settled the underlying bill, the claimants then applied for an order that the Interested Party be made jointly and severally liable for the defendants’ costs of the detailed assessment proceedings, with a 100% contribution as between the claimants and the Interested Party.

A Deliberately Narrow Application

The claimants were careful not to frame this as a non-party costs order application, nor as one made under section 51 of the Senior Courts Act 1981. Instead, the application relied solely on CPR 47.20(1)(b), which allows the court to make “some other order” in relation to the costs of detailed assessment proceedings.

Why the Application Failed

The rule addresses which party is entitled to the costs of the detailed assessment proceedings – it does not address which of a paying party’s own funders or representatives should ultimately discharge a liability once it has crystallised. The claimants were trying to use the rule to redirect their own liability onto the Interested Party, which the judge held fell outside what CPR 47.20(1)(b) was designed to do.

Testing the Claim Against NPCO Principles

Even applying non-party costs order principles by analogy, drawing on Travelers Insurance v XYZ [2019] UKSC 48 and Dymocks Franchise Systems v Todd [2024] 1 WLR 2807, neither the “intermeddler” nor “real party” test was met – the Interested Party’s and claimants’ interests were mutual and aligned, not adverse.

The Conduct Allegations Didn’t Stand Up

Allegations of aggressive conduct, unreasonable delay and an “absurd” £600,000 settlement offer were all rejected on the evidence – the offer, in particular, was found genuine and realistic against the eventual settlement figure.

What This Means in Practice

CPR 47.20(1)(b) cannot be used to reallocate an already-crystallised liability for costs of assessment onto an ATE insurer or its costs handler, however robustly that handler conducted negotiations, absent proper NPCO-style evidence. The judgment also closes with a warning for the defendants: their own costs of assessment will now face significant scrutiny on the standard basis.

Speak to Our Team of Costs Lawyers

Our team of costs lawyers and costs draftsmen advises on detailed assessment proceedings involving ATE-funded litigation, including disputes over who bears the costs of the assessment itself.

If your firm needs advice on a CPR 47.20 application or costs arising from ATE-funded proceedings, contact Greener Costs today. Call us on 01204 263047 or email info@greenercosts.co.uk.