In the case of Samra & Anor v Sandwell Metropolitan Borough Council, the Upper Tribunal was asked to decide whether the claimants, the Samras, having received an award of compensation from the tribunal following a decision in February 2026 were entitled to their costs in pursuing that award on an indemnity basis, or on the standard basis.
If the former as they claimed, then the quantum of costs, where in dispute, would be resolved in their favour. If the latter, as Sandwell Metropolitan Borough Council argued, then principles of reasonableness and proportionality would apply to any claimed costs.
In this article, we cover the tribunal’s two key decisions in February and August 2026 about the basis for awarding costs.
The standard basis is the default position for most court orders if an indemnity basis has not been requested or granted. This requires the costs to be reasonable in amount, reasonably incurred and proportionate to the legal issue. The party seeking the costs is responsible for proving these criteria.
Indemnity costs are court-ordered payments requiring the losing party to reimburse the winning party for legal expenses, without the limits applied under the standard costs basis.
This matter involves two decisions of the tribunal – the first of 27 February 2026 awarding the compensation, and the second, which is the main focus of this article, of 24 August 2026 as to the basis for awarding related costs.
In the August decision, the tribunal found that the principle of equivalence should apply and the claimant should be left no worse off as a result of the compulsory purchase order. In the absence of the council being able to show any reason ‘special or otherwise’ why it should not do so, the tribunal awarded costs to the claimants on an indemnity basis. Those costs amounted to circa £293,000. That is over half of the award of compensation in the claimants’ favour in the February decision, £547,039 representing land value and the usual add-ons such as loss payments, and demonstrating that fighting compensation in the tribunal needs to be considered carefully before action is launched.
The claimant owned a site in a residential area of Smethick, with planning permission granted in 2011, but the site had multiple issues with the foundations and retaining walls. In 2010, the council secured a confirmed compulsory purchase order, obtained to bring the empty property back into use, and the land vested in the council on 7 May 2014.
Roll forward a number of years, the parties could not agree to a final compensation settlement, in part due to a dispute over the value of works done by the claimants towards making the property ready for the development permitted by the planning permission to be built out, and resolving existing structural and foundational issues.
In the event, the claimants ‘won’ that round, as the compensation awarded by the tribunal in the February decision was a good deal closer to what they were seeking than the amount the council had offered. ‘Rule 2’ compensation – the value of the land, for example, was £506,750 in the claimants’ estimation and £161,000 in the council’s. The tribunal’s award was for £547,039.
There then was the matter of costs to be settled. It was common ground that the claimants should be entitled to their costs incurred both before and after the date of offers and counter offers. The claimants had made an offer to settle costs in October 2025 of £100,000. The council at the same date offered £21,242.
The dispute resulting in the August decision focussed on the basis of the costs award, the claimants saying the indemnity basis was appropriate and the council promoting the standard basis.
The claimant’s argument was that as land was forcibly taken and litigation had been needed to secure compensation, the indemnity basis was to be applied. They cited the case of National Roads Authority v Bodden, a Cayman Islands case, which held that all claimant costs should be allowed unless there was a special reason to the contrary, such as they were unreasonably incurred or were an unreasonable amount. This was, said the claimant, the indemnity basis in all but name. As a second ground, it argued unreasonable behaviour on the part of the council in the negotiations.
The council’s reply was that if costs were to be awarded on an indemnity basis then that would have been included in the tribunal’s Practice Directions of 2024. Further, it would be surprising if indemnity costs were to apply to cases where the authority acquire land on public interest grounds. In particular in this case, where the claimant failed to maintain the land, hence the compulsory purchase order being confirmed. As to the second ground, the council, in the tribunal’s words “provided nothing in response”.
The tribunal, following its analysis of the relevant case law, found in favour of the claimant. The Bodden case, whilst not binding, was persuasive and it noted that in Pro Investments v Hounslow LBC, the tribunal stated:
“That is because an indemnity against the reasonable costs of pursuing a claim for compensation is consistent with the principle of equivalence, as the Tribunal (Mr N J Rose FRICS) held in Bonnell v Carmarthenshire County Council [2014] UKUT 413 (LC), applying the reasoning of the Court of Appeal of the Cayman Islands in National Roads Authority v Bodden [2016] RVR 176.”
The tribunal further concluded that the decision in Bodden was square with Lord Justice Chadwick’s decision in the Court of Appeal in Purfleet Farms Ltd v Secretary of State for Transport, Local Government and the Regions:
“42. But, where there has been no offer or where the amount of the award exceeds the amount of the offer, then … ‘the expenses of determining the amount of disputed compensation may be seen to be part of the reasonable and necessary expense which is attributable to the taking of the lands compulsorily by the acquiring authority’, as the Lord President observed in Emslie & Simpson Limited v Aberdeen District Council...”
and
“In such a case the refusal to allow the claimant some part of his costs of the reference must be justified by a finding that the costs to be disallowed have not been incurred as part of the reasonable and necessary expense of pursuing the reference. As Lord Justice Potter has put it, the tribunal must be able to identify circumstances ‘in which the claimant's conduct of, or in relation to, the proceedings has led to an obvious and substantial escalation in the costs over and above those costs which it was reasonable for the claimant to incur in vindication of his right to compensation.’”
In this case, the tribunal found no such circumstances nor any reason why it should depart from the above reasoning. On that basis, it awarded costs on an indemnity basis and did not need to consider the second ground.
As a final matter, the parties disagreed over the quantum of costs to be paid on account pending detailed assessment. The council put forward £30,000, the claimants between £100,000-150,000. Perhaps inevitably, the tribunal found in favour of the claimants on this too.
For further information, please contact David Richardson of our planning and infrastructure consenting team.
