‘Costs follow the event’ is an established legal principle but it is not always the case. The case of Smith and Others v Campbell and Others [2026] EWHC 144 (Ch) confirms the relevance of parties’ conduct, particularly at the pre-action stage, to recovery of costs at the end. Although the Claimants in this case were successful in (partially) removing the trustees, they were not able to recover any of their costs due to their unreasonable behaviour.
The Law
The Civil Procedure Rules Part 44 states that the court has discretion as to costs and will consider all circumstances including, but not limited to:-
- the conduct of all the parties;
- whether a party has succeeded on part of its case, even if it has not been wholly successful; and
- any admissible settlement offers.
Also, paragraph 1.1 of the Practice Direction 46 states that:-
‘A trustee or personal representative is entitled to an indemnity out of the relevant trust fund or estate for costs properly incurred. Whether costs were properly incurred depends on all the circumstances of the case including whether the trustee or personal representative (‘the trustee’) –
(a) obtained directions from the court before bringing or defending the proceedings;
(b) acted in the interests of the fund or estate or in substance for a benefit other than that of the estate, including the trustee’s own; and
(c) acted in some way unreasonably in bringing or defending, or in the conduct of, the proceedings.’
Smith and Others v Campbell and Others [2026] EWHC 144 (Ch)
Background
The Claimants sought the removal of all trustees but succeeded only partially. There was a judgment dated 17 November 2025 replacing two trustees with an independent professional trustee whilst allowing two family trustees to remain in office.
The Claimants sought:- (1) their costs from the removed trustees personally; and (2) removal of the removed trustee’s indemnity from the trust fund. The removed trustees resisted.
Decision
The Court found that:-
- The Claimants had:-
- Exaggerated their claim by making numerous unfounded allegations of trustee misconduct, which were not pursued at the final hearing, increasing the costs and complexity of the case;
- Failed to engage in pre-action correspondence or early alternative dispute resolution, including mediation and an offer for one trustee to retire; and
- The Claimants claimed that they were fearful of the other side’s reaction to any such pre-action correspondence and felt obliged to begin this claim without giving any prior notice, but the Court was not convinced by that.
- The removed trustees were entitled to indemnity from the trust fund for their costs as they behaved reasonably – they defended legitimate allegations, made early settlement offers and did not act improperly.
How can we help
Ronny Tang is an Associate in our expert Dispute Resolution team, specialising in defamation claims, contentious probate and inheritance claims, Trusts of Land and Appointment of Trustees Act 1996 claims, Equality Act 2010 claims and Protection From Harassment 1997 claims.
If you need any advice concerning the subject discussed in this article, please do not hesitate to contact Ronny or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.
Contact usIf this article relates to a specific case/cases, please note that the facts of this case/cases are correct at the time of writing.