Cubic Transportation Systems Ltd v Transport for London: Payments on Account of Costs [2026] EWHC 211 (TCC)

Detailed Assessment — 2026-02-05

The TCC ordered £720,866.85 on account of costs after assessing a safe minimum recovery, while reserving an interested party's separate and insufficiently confined costs claim.

Overview

Court: High Court, Technology and Construction Court

Judge: Mr Roger ter Haar KC, sitting as a Deputy High Court Judge

Date: 5 February 2026

Citation: [2026] EWHC 211 (TCC)

In Cubic Transportation Systems Ltd v Transport for London, the court ordered a payment on account of costs of £720,866.85, exactly 60% of the receiving party’s claimed costs of £1,201,444.75.

The percentage was not applied as a rule of thumb. The court accepted that there is no fixed percentage and that the receiving party must show that the amount sought is likely to be recovered on detailed assessment. On the facts, the very high value and complexity of the procurement dispute, the volume of evidence and the close comparison with the claimant’s own expenditure gave the court confidence to order the full sum requested.

The judgment also illustrates the different approach to an interested party’s costs. A claim for £233,599 was reserved to the trial judge because entitlement was uncertain and the figure appeared to include work unrelated to the applications in question.

Background

Cubic Transportation Systems Limited challenged Transport for London’s procurement of a contract for revenue collection services, known as the Proteus Contract. Cubic was an unsuccessful tenderer. Indra Sistemas SA, the successful tenderer, participated as an interested party.

TfL succeeded on an application to lift the automatic suspension which had prevented the contract from proceeding. Cubic accepted that it should pay TfL’s costs of that application and Cubic’s related application for an expedited trial, subject to detailed assessment if not agreed.

TfL’s claimed costs were £1,201,444.75. It sought £720,866.85 on account. Cubic accepted that an interim payment should be ordered but argued that it should not exceed £300,000.

The principles applied

Cubic advanced three propositions:

the burden was on TfL to demonstrate likely recovery of at least the amount sought;
inadequate information should cause the court to err on the side of caution; and
there is no fixed percentage for a payment on account.

The court accepted those principles. The appropriate amount depends upon the circumstances, particularly the relationship between the costs claimed and the court’s provisional view of what would be reasonable and proportionate, and the quality of the information provided.

This is consistent with the purpose of CPR 44.2(8). The court should order a reasonable sum on account unless there is good reason not to do so, but it must avoid ordering more than the receiving party can confidently expect to recover.

Why 60% was ordered

Four features persuaded the judge that TfL would recover at least £720,866.85:

1. The procurement concerned a public project of very high value.

2. Although the hearing lasted one day, the court had received a substantial volume of witness evidence and supporting documents.

3. Cubic’s own estimated costs were £1,182,020.75, close to the sum claimed by TfL.

4. The senior and substantial counsel teams reflected the importance and complexity of the applications.

The length of the hearing was therefore not an adequate measure of the work reasonably required. The preparation demanded by a complex, high-value application can be substantial even where oral argument is compressed into a single day.

The comparison with Cubic’s own costs was also powerful. It did not prove that every item in TfL’s bill would survive assessment, but it made it difficult to maintain that TfL’s overall expenditure was inherently implausible.

The judge stated at paragraph 14 that he had “no doubt” TfL would recover at least the amount sought. The court therefore ordered the full £720,866.85.

Interested party costs

Indra sought £233,599. The court applied the principles stated in Bechtel Ltd v High Speed Two (HS2) Ltd [2021] EWHC 640 (TCC).

An interested party, usually the winning bidder in a procurement challenge, is not automatically entitled to its costs. It will ordinarily need to identify a separate issue on which it was entitled to be heard or an interest requiring separate representation. Permission to participate does not itself establish entitlement.

Cubic argued that Indra’s interests were aligned with TfL’s, that Indra made no written or oral submissions and that its evidence had played a minimal role. It also submitted that the statement of costs appeared to include all work undertaken since the proceedings began, rather than work confined to the suspension and expedition applications.

The judge considered £233,599 a very high figure for a watching role and accepted that it appeared to include a significant amount of unrelated work. However, he did not finally refuse the claim. The question whether, and to what extent, Indra should receive costs was reserved until the full proceedings showed the role Indra had actually played.

Practical implications for Costs Lawyers

A payment-on-account application should be prepared as a short provisional assessment, not simply as a percentage calculation. The receiving party should give the court enough information to identify a safe minimum recovery.

Useful material will often include:

a clear statement of costs limited to the application or period covered by the order;
a breakdown by fee earner, work type, counsel, expert and other substantial disbursement;
an explanation of the documents, evidence and preparation required;
any approved or agreed budget information;
a realistic allowance for likely reductions on assessment; and
where available, a measured comparison with the paying party’s disclosed costs.

The judgment does not establish 60% as a standard award. A court may order a lower or higher proportion depending upon the evidence and the likely assessment. The safe figure remains the amount which the court can confidently conclude will be recovered.

For an interested party, costs must be separated by issue and stage. A statement which includes unrelated work can undermine both quantum and entitlement. The record should show the distinct issue addressed, why separate representation was required and what contribution the interested party made.

Practical implications for Litigation Practitioners

Parties should deal with payments on account when agreeing or drafting the substantive costs order. CPR 44.2(8) creates a strong expectation of an order unless there is good reason to withhold one.

A paying party opposing the amount should do more than suggest a conventional percentage. It should identify likely assessment reductions, gaps in the receiving party’s information and any work outside the scope of the costs order. Its own costs may become a relevant benchmark, particularly where both sides addressed the same evidence and issues.

One-day applications should not be assumed to justify modest costs. In complex commercial and procurement litigation, the documentary and evidential preparation may carry far greater weight than hearing length.

Interested parties should obtain clear case management directions defining their permitted participation. That order will be relevant, but not conclusive, when costs are decided.

Conclusion

Cubic is a useful example of the evidence-based approach required when fixing a payment on account. The court accepted there was no fixed percentage, assessed a safe minimum by reference to the scale and complexity of the work, and ordered 60% only because it was satisfied that the sum would be recovered.

The treatment of Indra’s application supplies the corresponding warning. Costs must be confined to the work covered by the order, and an interested party must establish a distinct basis for recovery rather than rely on its formal status in the proceedings.

Citation

Cubic Transportation Systems Ltd v Transport for London & Anor [2026] EWHC 211 (TCC). Read the full judgment at The National Archives.

Related Specialist Support

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