The firm has conducted about 11,500 of the claims, brought by former service personnel whose hearing was impaired. In 2020, lawyers on both sides agreed an informal protocol where the firm would provide ‘without prejudice’ schedules or breakdowns of costs and disbursements to provide a basis for settlement. While more than 300 cases settled, the majority did not and the claimant would then serve a formal bill of costs on the MoD. However, the MoD then noticed discrepancies between the sums stated in the schedules and bills, and argued the firm was overcharging. From August 2024, the informal protocol was abandoned.
In Henderson and McPherson v Ministry of Defence [2026] EWHC 2645 (SCCO), Senior Court Costs Office Judge Whalan considered two preliminary issues. Judge Whalan held the schedules have the status of without prejudice privilege, but that the MoD’s case fell ‘a long way short’ of the ‘unambiguous impropriety’ required to remove this privileged status.
Judge Whalan looked at two claims. Claimant Ian Henderson settled for £65,000. His costs schedule sought nearly £45,000 and bill sought just over £37,000. The difference was £7,678.
Claimant Jonathan McPherson settled for £20,000. His costs schedule sought more than £162,000 and bill sought £132,000. The difference was £30,549.
Delivering his judgment, Judge Whalan said: ‘I am satisfied, on the balance of the available evidence, that the without prejudice schedules claimed exclusively costs which the claimants had actually incurred.
‘The defendant's allegation that the schedules included costs in excess of those actually incurred and/or costs which the claimants were not liable for is incorrect.’
Tom Blackburn, head of costs at Hugh James, said: ‘For the MoD, the immediate consequence is that it cannot rely on these schedules in the detailed assessments.
‘The wider significance lies in preserving workable settlement negotiations across substantial litigation. Informal arrangements can secure interim payments and avoid additional applications, but they benefit from clear explanations of what a schedule represents and how it may differ from a certified bill in due course.’
