Yodel v Corlett: High Court refuses payment out of £1.5m security and unmasks litigation funders

The High Court has refused to release £1.525 million held in court as security for costs, ruling that a successful defendant may retain security until the entirety of the liability it was ordered to secure has been satisfied.

In Yodel Delivery Network Limited v Corlett & Ors [2026] EWHC 1741 (Ch), handed down on 10 July 2026, Mr Justice Fancourt dismissed an application by Shift Global Holdings Limited and Corja Holdings Limited under CPR rule 37.3 for payment out of the funds, and granted the bulk of Yodel's cross-application, including a non-party costs order against Jacob Corlett and disclosure of the identities of those bankrolling the failed counterclaim.

Security is not a fund for the debtor to appropriate

The dispute followed Fancourt J's dismissal of Shift and Corja's counterclaim, which attracted indemnity costs and an on account payment of £2,752,591.57. Shift and Corja paid £1,241,467.64 late, leaving £1,511,123.93 outstanding, a figure conveniently covered by the money in court. They argued the purpose of the security had crystallised and that it should now be used to discharge the earliest costs liability.

Fancourt J rejected the premise. Security held in court, he said, is held on behalf of both parties to await the event, and while it is common practice for parties to agree its release in satisfaction of costs, it is "not strictly correct" to treat it as a fund available for that purpose. To accede to the application would be to approve appropriation of the security by the debtor to discharge a chosen part of the secured liability, leaving Yodel wholly unsecured for up to a further £1.375 million after a detailed assessment that could run for twelve months.

Central to the reasoning was the evidence that Shift, a non-trading holding company with balance sheet insolvent subsidiaries, could not meet the costs from its own resources and depended on roughly 65 investors who have already advanced some £3.3 million towards this litigation and £45 million overall. No distinction had been drawn between Shift's ability to raise funds now and its ability to do so in a year. The longer the delay, the greater Yodel's exposure.

The judgement distinguishes Force India [2012] EWHC 1726 (Ch) and Magomedov [2026] EWHC 1051 (Comm) on the change of circumstances requirement. Because the outstanding £1.51 million remains unpaid, retention of the existing security is not an increase in security at all, and Yodel need establish no material change. Should the debt be paid, Shift and Corja may re-apply on the footing that the security has become excessive.

Time for payment was extended to at least 31 July 2026, with interest continuing to run.

Indemnity basis does not travel to the assessment

Yodel's request for security for the costs of the detailed assessment succeeded, though only on the standard basis. Detailed assessment proceedings, the judge held, are separate proceedings on distinct issues before a different judge; whether indemnity costs follow will turn on the conduct of those proceedings and any offers made. Applying the conventional 65 per cent, and crediting the surplus in the existing security, he ordered a further £48,000 within 28 days, with debarment from the assessment as the sanction for default.

Funders identified, contact deferred

Mr Corlett was made personally liable under section 51 of the Senior Courts Act 1981 for the counterclaim costs and the June 2025 injunction costs. The court declined jurisdiction over Court of Appeal costs, section 51(1) referring to the court in question rather than any of the listed courts. The Henderson v Henderson objection failed: there is no time limit on non-party costs applications, and Mr Corlett's personal responsibility only emerged at trial.

Shift, which had already ignored a July 2025 order to identify its funders, must disclose their names, the amounts advanced, the terms and their interest in the outcome within 14 days. Yodel may not contact them before 1 August 2026, an even-handed condition preventing a scramble while Shift approaches the same investors for the outstanding £1.51 million. Time for commencing detailed assessment was extended to 31 August 2026, with the question of disallowing Judgments Act interest left to the costs judge.