A costs judge has allowed claimants to recover more than £12,000 in assessment costs – defeating the defendants’ arguments that they should be capped at £1,500.

The defendants in UK Sovereign Investments Ltd v Hussain had said the initial overall costs bill of £83,000 had been ‘grossly exaggerated’ through  ‘unreasonable conduct’.

Deputy Costs Judge Campbell acknowledged that the amount claimed was ‘odd’ but said he was not in a position to make a finding that the figure advanced in the bill was unreasonable.

The court heard that the underlying claim for the return of a deposit and for damages was settled for almost £104,000, plus costs to be assessed if not agreed. The claimants served a bill seeking £83,425 and the parties eventually settled the costs at £59,000, leaving only assessment costs to be resolved.

The dispute arose because the rules stipulate that bills up to £75,000 are dealt with as provisional assessments and result in capped assessment costs of £1,500.

With the initial bill exceeding £75,000, the defendants had to show unreasonable conduct if the court was still to enforce the £1,500 cap.

Campbell said there was no ‘irrefutable inference’ that the initial costs were exaggerated simply because they were later negotiated down. It might have been that the claimant wanted to speed up the process or to reach finality, he suggested, or that the costs were reduced to reflect a discount for the risks of litigation.

‘There may have been many reasons why the claimant was willing to discount the bill about which the court does not know and will never be told,’ added Campbell.

He rejected the plea to limit or cap assessment costs, although he pared the figure claimed down to £12,456 after finding that the initial claim for £19,000 was ‘strikingly high’. The £270 hourly rate for the costs lawyer was ‘far too high’ given the guideline hourly rates, while ‘excessive’ time was spent in the documents section.

Reflecting on the case, costs consultant Carter Burnett said Campbell’s ruling was ‘patently the correct decision’. But the firm added: ‘That said, the court has left the door open to arguments at assessment about whether a costs claim was exaggerated.’