PI Brief Update

Know Your ABCs: Alphabet (UK) Ltd v AXA Insurance and Pre-action Costs - Georgina Pressdee, Temple Garden Chambers

23/04/26. On 23 March 2026, Costs Judge Brown (sitting as a District Judge of the County Court) handed down his judgment in Alphabet (UK) Limited v AXA Insurance UK PLC [2026] EWHC 674 (SCCO). The Claim was for vehicle damages in the region of £12,000. However, the true subject of the proceedings (issued under Part 7) was costs. There were two issues to be determined:

1. Whether the proceedings were an abuse of process because there was no real argument as to the Claim for damages, which had already been paid.
2. Whether it was necessary for the Claimant to instruct solicitors within two months of the accident.

Background

The road traffic accident took place on 8 February 2023. By 28 March 2023, the Claimant had instructed solicitors. That date, the Defendant was notified of those instructions and presented with a Part 36 offer, along with an indication that the Claimant would seek its costs. The Defendant refused the Claimant’s bill of just over £1,000. Proceedings were therefore issued on 12 March 2024.

Ruling

Costs Judge Brown found that the Claimant was entitled to its costs but deferred the decision as to their amount until a later date.

Issue 1: Whether the Proceedings Were an Abuse of Process

This argument was not advanced forcefully by Counsel for the Defendant; the Judge concluded with good reason. In addition to well-established authority that a Claimant may issue proceedings to recover costs which the Defendant refuses to pay (Birmingham City Council v Lee [2008] EWCA Civ 891; Ayton v RSM Bentley Jennison [2018] EWHC 285; Moreira v French (HHJ Stewart, CC, 30 September 2008)), it was rejected on the basis that:

1. A Claimant would otherwise have no remedy where the Defendant had paid damages but refused to pay costs.
2. Part 36 envisages that a Claim may be settled pre-issue with the benefit of a costs order.
3. Part 45 envisages that where a Claim which would otherwise proceed on the fast-track settles prior to issue, the Claimant is ordinarily entitled to £599. There must be some means of obtaining that.

Issue 2: Whether it was Necessary for the Claimant to Instruct Solicitors

The Defendant’s submission on this issue was twofold:

1. The Claimant was a sophisticated corporate body that might be presumed to grapple with matters such as this regularly. This was contradicted by evidence from the Claimant that it frequently engaged solicitors to place it on an equal footing with major insurers and that it did not have an in-house lawyer.
2. The Claimant was too quick to instruct solicitors. Had the Claimant waited, it would have received an offer without incurring legal fees. This argument was rejected on the basis that it was predicated on hindsight and that appointing lawyers can lead to a more expeditious resolution.

Costs Judge Brown challenged the underlying assumption in the framing of this issue: that it had to be “necessary” for the Claimant to instruct solicitors. The Judge concluded there was no basis in law for such a high hurdle. Rather, the question was whether it was “reasonable” for the Claimant to do so. The fact that the Claimant was a commercial organisation with a degree of sophistication did not make it unreasonable for them to instruct solicitors. Expertise in car leasing was not tantamount in expertise in Claims for damages and it was not reasonable to expect the Claimant to have in-house lawyers. Further, it was not unreasonable for the Claimant to have instructed solicitors at a stage when much of the material relied on by the Defendant was not known to the Claimant and there had been no admission of liability. Consequently, the Judge was unable to conclude that there was any certainty at that time that the Defendant would have accepted an offer in the amount claimed.

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