MT Construction: Default Costs Certificate Stands [2026]

Detailed Assessment — 2026-04-08

In MT Construction Ltd v Frieze [2026] EWHC 813 (SCCO), the court refused to set aside a default costs certificate where no written extension had been agreed and the paying parties failed to show a good reason for assessment to continue. The certificate was varied only to remove recoverable VAT.

Overview

Date: 8 April 2026

Judge: Deputy Costs Judge Erwin-Jones

Court: High Court of Justice, Senior Courts Costs Office

Citation: [2026] EWHC 813 (SCCO)

Nature of Proceedings: Application to set aside or vary a default costs certificate under CPR 47.12

Key Issues:

Whether the parties had agreed in writing to extend time for points of dispute under CPR 2.11
Whether there was another good reason for detailed assessment to continue under CPR 47.12(2)
The relevance of promptness, diary systems, workload and late draft points of dispute
Whether the certificate should be varied to remove VAT recoverable as input tax

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The Facts

MT Construction Ltd v Frieze, decided by the Senior Courts Costs Office in 2026 and reported as [2026] EWHC 813 (SCCO), is a practical warning about default costs certificates. The court refused to set aside a certificate where points of dispute were late, the alleged extension did not comply with CPR 2.11 and the paying parties failed to establish a good reason for detailed assessment to continue.

The defendants had been ordered to pay the claimant's costs of an injunction application on the indemnity basis, with a £20,000 payment on account. The claimant's costs agents, TLS, prepared the bill and notice of commencement. Following earlier difficulty over service, the service pack was sent by first-class post on 17 October 2025 and delivered on 20 October. The notice stated that points of dispute were due by 11 November 2025.

The parties disagreed about a telephone call on 17 October. The defendants' former solicitor said that a 21-day extension had been agreed in principle if service by email were accepted. The claimant's costs agent denied that account and had recorded only that the solicitors lacked instructions to accept email service. The judge preferred the costs agent's evidence.

On Saturday 8 November, the defendants' solicitors sent an email asserting that the extension had been agreed and stating that they could accept email service. TLS replied on 11 November, maintained that the deadline expired that day and warned that it would request a default costs certificate if points of dispute were not received by 4 pm.

No points of dispute or application for an extension followed. TLS requested the certificate on 12 November. It was sealed on 14 November for £47,005. The defendants applied to set it aside on 28 November but did not serve their proposed points of dispute with the application. Those points were served only shortly before the hearing in March 2026.

The claimant had offered openly to vary the certificate by removing VAT which it could recover as input tax, reducing the certified sum to £39,271. The defendants nevertheless pursued a full set-aside.

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Key Holdings

1. The service pack was validly served

Royal Mail tracking established delivery on 20 October 2025. The 21-day period under CPR 47.19 therefore expired on 11 November.

The court rejected the alleged oral agreement followed by the email of 8 November. CPR 2.11 requires a written agreement if the parties are to vary a time limit prescribed by the Rules. A unilateral email, sent after postal service and purporting to record a disputed conversation 20 days earlier, did not amount to a written agreement by both parties.

Silence from TLS did not signify acceptance, particularly because its email on the deadline expressly maintained the original date. At [16], the judge added:

> “The unanswered email ... does not constitute any agreement”.

The claimant had therefore been entitled to request the default costs certificate. The mandatory ground under CPR 47.12(1) was not established.

2. The breach was serious and significant

The discretionary route under CPR 47.12(2) engaged the three-stage approach in Denton v TH White Ltd. The court considered the seriousness and significance of the breach, the reason for it and all the circumstances, including efficient and proportionate litigation and compliance with rules, practice directions and orders.

The breach was serious. The defendants' solicitors had possessed the bill since at least 20 October and probably earlier. No points of dispute were served by the actual deadline, by the alleged extended deadline of 1 December, with the application to set aside or until shortly before the hearing.

The judgment does not treat every late point of dispute as fatal. Its force comes from the combination of valid service, the absence of a written extension, failure to apply for more time and a continued delay which lasted for months.

3. Workload and mistaken belief did not provide a good reason

The solicitor relied on inadvertence, a belief that the deadline had been extended and heavy High Court commitments in Birmingham, Manchester and London. Those reasons were insufficient.

The court had no evidence about the firm's arrangements for supervision, receiving and distributing correspondence, diary management or covering the work of a busy fee earner. There was also no explanation for initially refusing email service. Even if the solicitor genuinely believed an extension existed, that belief was not objectively reasonable without written agreement from TLS.

The case therefore illustrates the difference between explaining how a default occurred and establishing a good reason for it. Personal workload does not replace evidence of systems designed to protect procedural deadlines.

4. Late and general points of dispute did not justify assessment

The defendants argued that their proposed points of dispute showed genuine issues requiring assessment and that the claimant would suffer no prejudice because it had already received £20,000 on account.

The court was not persuaded. The draft points were general and failed to identify with particularity the items challenged and the grounds of challenge. Their mere existence did not establish a good reason for the detailed assessment to continue.

Proportionality also mattered. The net claim was approximately £39,000, half of which had already been paid on account, while the parties' proposed N260 schedules for the set-aside hearing totalled more than £17,000. Continuing to a full assessment would itself have been disproportionate.

5. The application was not prompt

The application was issued between 11 and 14 days after the relevant default. The solicitor attempted to explain that delay by reference to an SRA intervention and transition. The intervention did not occur until March 2026, months after the November application, so it could not explain the delay.

Promptness was not the only reason the application failed, but it formed part of the overall CPR 47.12(2) assessment. A paying party seeking discretionary relief should issue immediately and serve properly particularised draft points with the application.

6. Variation was limited to the VAT error

The judge concluded at [20]:

> “I am not satisfied that a good reason has been shown for the detailed assessment to continue.”

The full set-aside application was refused. The court nevertheless varied the certificate under CPR 47.12(2) because the claimant had accepted that VAT was recoverable as input tax. The certified amount was reduced from £47,005 to £39,271.

The earlier £20,000 payment on account was to be credited against the varied certificate upon payment or enforcement. The varied certificate stood as the costs order for the injunction application.

The claimant had succeeded on the substantive application. The defendants were ordered to pay its costs, summarily assessed at £4,250. The judge noted that the claimant had offered the VAT variation before the hearing and that the defendants had chosen to pursue a full set-aside instead.

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Practical Implications

For Costs Lawyers

1. Prove service clearly. Retain the certificate of posting, Royal Mail tracking and the complete service pack. The delivery evidence provided the foundation for the claimant's entitlement to the certificate.

2. Record extensions in an agreed written form. A unilateral email describing a disputed call is not a CPR 2.11 agreement. The correspondence should state the precise new deadline and receive express written agreement from the other side.

3. Do not rely on late generic points. Draft points should identify the disputed items and grounds with the particularity required by Practice Direction 47. Their existence alone does not establish that assessment should continue.

4. Separate set-aside from variation. An error in one component of a certificate may justify variation without reopening the entire assessment. A focused offer to correct VAT or arithmetic can protect the receiving party's costs position.

5. Compare the dispute with the costs of the application. Proposed hearing costs exceeding £17,000 were striking beside a net certificate of £39,271, with £20,000 already paid. Proportionality can weigh against continuing the assessment.

For Litigation Practitioners

1. Apply for an extension before time expires. If written agreement is absent, a protective application is safer than proceeding on an assumed understanding.

2. Evidence the firm's systems, not just the fee earner's workload. Relief applications should explain diary controls, supervision, allocation of post and email, absence cover and the specific failure which defeated those safeguards.

3. Act immediately after discovering default. CPR 47.12 and paragraph 11.2 of Practice Direction 47 place express weight on promptness. Every unexplained day can weaken the discretionary case.

4. Serve particularised draft points with the application. This is the general procedural expectation. Leaving them until shortly before the hearing makes it harder to show both merit and procedural discipline.

5. Accept sensible partial corrections. Pursuing a full set-aside after an open offer to remove the VAT error exposed the defendants to the costs of the application.

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Conclusion

MT Construction v Frieze demonstrates that CPR 47.12 is not a routine route back into detailed assessment. Where the receiving party was entitled to obtain the certificate, the paying party must establish a good reason for assessment to continue and satisfy the court on seriousness, explanation, promptness and all the circumstances.

The judgment combines several recurring failures: no written CPR 2.11 extension, no application before expiry, no timely points of dispute, no evidence of reliable office systems and an inadequately explained delay. The subsequent points did not cure those defects, particularly where they remained general and the economics of further assessment were disproportionate.

For Mackenzie Costs practitioners and clients, the practical result is clear. The £47,005 certificate was not set aside. It was varied only to £39,271 to remove VAT, the £20,000 payment on account remained creditable and the defendants incurred a further £4,250 costs order.

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Citation: MT Construction Limited v Dennis Frieze and Anne Saunders [2026] EWHC 813 (SCCO)

Full judgment available at: The National Archives

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