MIL Collections v My Shop 4: clarification of fixed recoverable costs

The County Court has recently delivered a significant ruling on the application of fixed recoverable costs in fast track claims in circumstances where a claim is struck out before trial and involves multiple, unrepresented defendants.

Background

The court consolidated a number of fast track claims all brought by the same claimant, arising from similar facts (seeking payment of purported debts that had been purchased by the claimant). The court consolidated the claims for efficient case management.

The particulars of the claims advanced by the claimant were all deficient in detail and so the court ordered the claimant to file further and better particulars, requiring detailed factual and contractual bases for the claims, absent which, the claims would be struck out. The claimant failed to comply with that order and so the claims were struck out on 13 May 2025.

The defendants, accordingly, sought an order for their costs of the litigation up to that date to be paid by the claimant.

The difficulty in this case arose due to the fixed costs regime. The fixed costs regime was expanded in October 2023 to cover most civil cases valued up to £100,000 in damages and prescribes the amount of legal costs that the successful party can claim back from the unsuccessful party, generally based on (a) the stage of the proceedings that had been reached and (b) the complexity of the issues.

What was the issue?

The court was asked to determine:

• Whether the fixed cost provisions in Table 12 of Practice Direction 45 apply to a claim automatically struck out pursuant to an unless order
• If so, what level of recoverable costs ought to be paid
• Whether each defendant in a multi-defendant case is entitled to their own set of fixed costs (or whether a single costs order should be made with that divided among them)
• How costs should be assessed where defendants were litigants in person
• Whether the court should apply a 50% uplift in costs payable to the defendants due to the claimant’s conduct.

What happened?

The claimant argued that because the entitlement to costs arose from an automatic strike out, it should only be liable to pay the defendants’ costs in accordance with Table 1 of Practice Direction 45, which deals with costs relating to interim applications, and therefore would result in a lower amount of costs becoming payable to the defendants.

The defendants argued that to the claimants should be ordered to pay their costs according to the stage of the litigation that had been reached, and that an uplift should be applied, notwithstanding that some of the defendants were litigants in person, due to the claimant’s conduct.

The court held that:

• The defendants were entitled to their costs by reference to the stage of the litigation that had been reached (i.e., Table 12). An application for strike-out was treated as a “conclusion” of the case for fixed costs purposes, not an interim application
• Each defendant was entitled to a separate award of fixed costs
• Defendants 12 and 13 (who had legal representation earlier in the proceedings but not at the time of strike-out) were awarded £1,720.67 each (which two thirds of the amount permitted and broadly proportionate to the time spent with legal representation)
• Defendants 1–11 (who were unrepresented), were each awarded £133.00, based on 7 hours’ work at £19 an hour
• The court refused to apply a 50% uplift due to lack of evidence that the claimant’s conduct increased the defendants’ costs.

What is the significance?

This judgment clarifies several important points about the fast track fixed costs regime.

It establishes that fixed costs apply even when a claim is struck out automatically. In multi-defendant cases, each successful defendant is entitled to their own fixed costs, unless the court decides to make a proportionate costs order under CPR 44.2(6)(a). Litigants in person can recover up to two-thirds of fixed costs or modestly assessed costs based on time spent, even without full documentation.

The ruling emphasises that the purpose of fixed costs (providing certainty and proportionality) would be undermined if strike outs were excluded from the regime.

Overall, the judgment promotes the consistent application of fixed costs while ensuring fairness in complex or consolidated claims, particularly for unrepresented parties.

If you have any questions about the topics raised in this article, our Commercial Litigation team would be happy to help.