Winehouse v Parry: £963,852.88 Interim Payments on Account [2026]

Detailed Assessment — 2026-07-29

The High Court ordered indemnity costs after the total failure of Mitchell Winehouse’s claim and required combined interim payments on account of £963,852.88, calculated at 90% of budgeted costs and 75% of unbudgeted costs pending detailed assessment.

Overview

Date: 29 July 2026

Judge: Sarah Clarke KC, sitting as a Deputy Judge of the High Court

Court: High Court of Justice, King's Bench Division

Citation: [2026] EWHC 1970 (KB)

Nature of Proceedings: Consequential costs judgment following the dismissal of the claimant's claims after trial

Key Issues:

Whether the successful defendants should recover their costs
Whether the claimant's conduct justified indemnity costs
The significance of failed dishonesty allegations, publicity, settlement offers and ADR
How the court should calculate reasonable interim payments on account
Whether the interim payment orders should be stayed pending an application for permission to appeal

In Winehouse v Parry [2026] EWHC 1970 (KB), the King's Bench Division ordered indemnity costs and combined interim payments on account of £963,852.88 after the claimant's case failed in full. The payments were made under CPR 44.2(8) pending agreement or detailed assessment. They were not final determinations of the defendants' recoverable costs.

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The Underlying Claim

The claimant, Mitchell Winehouse, sued as the personal representative of the estate of his daughter, Amy Winehouse. The claim concerned 141 items which had been in the possession of the two defendants, Naomi Parry and Catriona Gourlay, and which they sold at auctions in Los Angeles in 2021 and 2023. The claimant alleged that the defendants were not entitled to possess or sell the items and were liable to the estate for the sale proceeds.

Following a six-day trial, the court dismissed every claim against both defendants in a substantive judgment handed down on 20 April 2026, reported as [2026] EWHC 911 (KB). The parties then filed detailed written submissions and about 500 pages of evidence concerning the incidence, basis and interim payment of costs. The court determined the issues on paper.

The claimant accepted that the defendants had succeeded but argued that there should be no order for costs because of their alleged conduct before and during the proceedings. Alternatively, he sought standard basis costs subject to a reduction of 75%. The defendants sought indemnity costs and substantial interim payments on account.

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The Costs Principles

1. The Defendants Were Entitled to Their Costs

The starting point under CPR 44.2 was that the unsuccessful party should pay the successful parties' costs. Sarah Clarke KC stressed the importance of giving proper weight to that general rule while considering all the circumstances, including party conduct and admissible non-Part 36 offers.

The claimant relied heavily on the defendants' alleged failure to explain their possession of the items, their responses to settlement proposals and the timing of mediation. The court rejected that account. It found that the defendants had provided explanations which the claimant refused to accept, while the claimant failed to confront contemporaneous documents which undermined his own case.

The court also rejected the suggestion that the defendants had unreasonably prevented settlement. The claimant's proposals required the defendants to concede his allegations and pay money, without protecting them from further public accusations. The court found that they were entitled to defend their personal and professional reputations and that they had engaged constructively with attempts to arrange mediation.

The legal position on ADR remained orthodox. An unreasonable failure to engage in ADR is a factor under CPR 44.2, not an automatic costs penalty. The losing party also bears the burden of proving both a failure to engage and that the failure was unreasonable. The court cited Gore v Naheed [2017] EWCA Civ 369 in support of that approach at paragraph 16.

At paragraphs 55 and 56, the court held that the claimant had chosen to bring an inherently weak case, pursued it to the end and lost on every material point of fact and law. There was no basis to depart from the general rule. He was ordered to pay both defendants' costs, to be assessed if not agreed.

2. The Conduct Crossed the Indemnity Costs Threshold

The court applied the established test from Excelsior Commercial and Industrial Holdings Ltd [2002] EWCA Civ 879: the case must be taken out of the norm by the parties' conduct or by other particular circumstances. The claimant's conduct did not need to attract moral condemnation, but it had to be unreasonable to a high degree and outside the ordinary and reasonable conduct of proceedings.

The judgment drew together the guidance in Three Rivers District Council v Governor and Company of the Bank of England [2006] 5 Costs LR 714 and the Court of Appeal's more recent decision in Thakkar v Mican [2024] EWCA Civ 552. Those authorities establish that speculative or opportunistic claims, aggressive pursuit of weak allegations, failed allegations of dishonesty and attempts to exert improper pressure can support indemnity costs. No presumption arises merely because dishonesty has been alleged unsuccessfully, but a party making such an allegation runs a significant risk.

The court found that the required threshold was crossed:

> the claimant’s conduct was “unreasonable to a high degree” and that it was “outside the ordinary and reasonable conduct of proceedings”

The claimant had issued proceedings without a positive factual case identifying why each item did not belong to the defendants. He abandoned claims to some items shortly before trial after accepting that it was obvious they had been gifts. He had also failed to address contemporaneous evidence which showed that he and his witnesses knew that the defendants claimed ownership of significant items and intended to sell them. The court drew these matters together at paragraphs 64 and 65.

3. Late and Unfounded Allegations Increased the Costs

The claimant added allegations of deliberate concealment and breach of fiduciary duty only a few months before trial. The court found that those allegations were serious, unfounded and intended to bolster an otherwise weak case. They significantly expanded the evidence and argument and were largely responsible for a trial listed for three days taking six days.

The judgment was particularly critical of the pursuit of allegations of theft, deceit and deliberate concealment. The defendants were subjected to intensive cross-examination on those allegations and suffered material damage to their reputations, careers, finances and health. The court also found that the claimant had used publicity as a means of applying pressure, including statements to the press and an untrue assertion that he had gone to the police.

The financial imbalance between the parties formed part of the overall assessment. The claimant had effectively unlimited resources while the defendants were vulnerable and impecunious. The court found that he deliberately turned the dispute into large-scale and expensive litigation calculated to exert commercial pressure on them.

At paragraphs 66 to 73, the court treated the warning in Thakkar as directly engaged. An unnecessarily aggressive approach to litigation, particularly one involving unwarranted allegations of misconduct or dishonesty, can justify indemnity costs. The conduct in this case extended across the pre-action period, the proceedings, the trial and the consequential costs dispute.

4. No Global Reduction Was Made

The claimant sought a 75% reduction in each defendant's costs. The court refused to make that or any other global reduction. The claimant was liable for the defendants' costs on the indemnity basis, subject to agreement or detailed assessment.

That did not amount to a final assessment of every item claimed. The detailed assessment will still determine which costs are payable and in what amount. On the indemnity basis, doubts about whether costs were reasonably incurred or reasonable in amount are resolved in favour of the receiving party. The court applied that principle when estimating the interim payments at paragraph 78.

The claimant also questioned whether the second defendant was genuinely liable for all the costs in her schedule, referring to previous statements about a possible CFA and third-party funding. At paragraphs 75 and 76, the court accepted the explanations from the defendants and their solicitors that the second defendant remained personally liable and that neither the proposed CFA nor third-party funding had taken effect. The judge regarded any remaining issue as primarily one for a costs judge, but recorded her acceptance of the signed schedules and the explanations provided.

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Calculating the Interim Payments on Account

The CPR 44.2(8) Requirement

CPR 44.2(8) provides that, where costs are ordered subject to detailed assessment, the court will order a reasonable sum on account unless there is good reason not to do so. The purpose is to give the receiving party part of its likely recovery without waiting for the detailed assessment process to conclude.

The court must estimate the likely level of recovery and apply an appropriate margin for error. A payment on account is therefore an interim estimate, not a final decision about the total recoverable costs.

Where costs have been managed, an approved budget can provide a sensible starting point because CPR 3.18 limits departure from agreed or approved budgeted costs without good reason. The court referred to Thomas Pink Ltd v Victoria's Secret UK Ltd [2014] EWHC 3258 (Ch), in which 90% of the approved budget was ordered on account.

Costs Incurred by the Parties

The claimant's own costs as at 28 April 2026 were £951,080.28 including VAT, compared with budgeted costs of £160,850 including VAT. The court considered that the claimant's conduct had made it inevitable that the defendants would also exceed their budgets substantially.

The first defendant's total costs were £715,361.98 including VAT. These comprised:

Budgeted costs of £218,730
Unbudgeted costs of £496,631.98

The second defendant's total costs were £487,132.15 including VAT. These comprised:

Budgeted costs of £194,485.20
Unbudgeted costs of £292,646.95

The figures were not summarily assessed. They provided the base from which the court estimated safe interim payments pending agreement or detailed assessment.

The 90% and 75% Approach

At paragraph 80, the court considered that each defendant was likely to recover the full amount of her budgeted costs and at least 85% of her unbudgeted costs on the indemnity basis. It then applied a further margin for error and ordered interim payments calculated at:

90% of budgeted costs
75% of unbudgeted costs

For the first defendant, this produced:

£196,857 for budgeted costs
£372,473.99 for unbudgeted costs
Interim payment on account: £569,330.99

For the second defendant, this produced:

£175,036.68 for budgeted costs
£219,485.21 for unbudgeted costs
Interim payment on account: £394,521.89

The combined interim payment was therefore £963,852.88. That sum represented the court's estimate of a reasonable amount to be paid immediately on account. It did not fix the defendants' final entitlement following detailed assessment.

No Stay Pending Appeal

The payments were ordered within 14 days. The claimant had ready access to the necessary funds, while the defendants were in serious financial difficulty.

An application for permission to appeal does not itself stay enforcement. The court refused a stay, agreeing that the proposed appeal was limited and that the claimant would remain exposed to substantial costs even if he succeeded on part of it. The judge also refused the claimant permission to appeal.

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Practical Implications

For Costs Lawyers

1. Label the figure accurately as an interim payment. A CPR 44.2(8) order does not determine the final costs recoverable on detailed assessment. Advice, schedules and draft orders should preserve that distinction.

2. Separate budgeted and unbudgeted costs. The court applied different percentages to each category. A payment application should identify the approved budget, the costs falling outside it and the reason those additional costs were incurred.

3. Link overspend to the paying party's conduct. The defendants persuaded the trial judge that their substantial unbudgeted costs resulted from late amendments, additional allegations and the extended trial. That evidence supported a high interim recovery.

4. Use the basis of assessment in the estimate. The indemnity basis materially affected the court's confidence in the likely recovery. The payment-on-account evidence should explain how the applicable basis will affect disputed items and the margin for error.

5. Retainer challenges require evidence. A late suggestion based on social media or incomplete information did not displace signed costs schedules and clear explanations from the solicitors. Any challenge to liability to pay should identify the actual retainer and the costs said to fall outside it.

For Litigation Practitioners

1. Failed dishonesty allegations carry a serious costs risk. The court will examine whether such allegations had a proper evidential basis, how they were pleaded and how aggressively they were pursued.

2. ADR is not a shield against adverse costs. A party cannot rely simply on having proposed mediation. The court will consider whether its settlement terms were realistic and whether its own conduct made productive engagement possible.

3. Publicity can form part of the conduct assessment. Statements intended to damage an opponent's reputation or increase settlement pressure may help take a case outside the norm.

4. Late amendments can affect both basis and quantum. Serious allegations introduced shortly before trial may justify indemnity costs and support the recovery of costs incurred beyond an approved budget.

5. An intended appeal does not suspend payment. A party seeking a stay must obtain a specific order and establish grounds sufficient to displace immediate enforcement.

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Conclusion

Winehouse v Parry is a forceful application of established indemnity-costs principles to litigation which the court found weak, aggressive and oppressive. The result followed from the combined effect of the claimant's failure on every material issue, his pursuit of unfounded allegations, his use of publicity and the financial pressure imposed on the defendants.

For costs practitioners, the most useful part of the judgment is the calculation under CPR 44.2(8). The court distinguished budgeted from unbudgeted costs and ordered 90% and 75% respectively, producing combined interim payments of £963,852.88. Those payments provide immediate relief to the receiving parties but remain payments on account only. The final recoverable costs will be determined by agreement or detailed assessment.

The decision provides a practical example of how litigation conduct can affect the incidence and basis of costs, the likely treatment of budget overspend and the size of an interim payment. This analysis is published by Mackenzie Costs as part of its coverage of significant costs decisions.

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Citation: Mitchell Winehouse (suing as the personal representative of Amy Jade Winehouse (deceased)) v Naomi Parry and Catriona Gourlay [2026] EWHC 1970 (KB)

Full judgment available at: The National Archives

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