Losing defendant in group action ordered to pay only 40% of claimants’ costs

The supermarket Morrisons should only pay 40% of the costs in a group action even though it lost, the High Court has ruled.

This was because it succeeded in defending the main claim that it was directly liable for a disclosure of data relating to 99,998 employees; it was instead found vicariously liable for the actions of a disgruntled employee who disclosed that data.

In Various Claimants v WM Morrison Supermarkets PLC [2018] EWHC 1123 (QB), Morrisons argued that the bulk of the time, effort, expense, disclosure and evidence was directed towards, and generally only towards, the issues of direct liability.

The starting point was, nonetheless, that the claimants should recover all of their costs, said Mr Justice Langstaff, but he felt a proportionate costs order was appropriate.

He said the two aspects of the claim “were sufficiently distinct for them to be regarded in my view as substantially separate issues”, although there was some overlap.

“In general terms, I accept the… submission that as the overall winner, the claimants should be entitled to the costs of those matters which they had to prove to establish vicarious liability. This includes the common costs so far as referable to the findings which led to vicarious liability being established.

“I also, however, accept… that the percentage chosen should not simply be a figure plucked, as it were, from the air but one which attempts to balance the costs of the losing party in respect of the costs of the issues on which it succeeded (apart, that is, from that proportion of the common costs which is truly referable to vicarious liability being established) against those of the successful parties on the issues on which they succeeded.”

Langstaff J said it was clear from the pleadings how much of the case concerned the direct liability issue, and that “if the trial had been in respect of vicarious liability alone, it would have been concluded (judgment apart) in less than half the time it was”.

He continued: “The claimants have had the indulgence of pursuing claims which were tenuous (to which the defendant early on gave cogent answers), at unnecessary length, pursuing disclosure that was principally related to those claims. The defendant should not in justice be required to pay for this, but rather be made subject to a costs order which reflects the fact that it succeeded in resisting those claims.”

The judge found that the claimants were “unrealistic in asserting that a maximum of some 20% of time and evidence was spent on the direct liability cases alone, and have considerably overstated the extent of the issues common to both the direct and the vicarious claims”.

He concluded: “Overall, I have come to the conclusion that the proper order is that the defendant pays the claimants 40% of their costs of the action, to be assessed if not agreed.”

Jonathan Barnes and Victoria Jolliffe (instructed by JMW Solicitors) represented the claimants, with Anya Proops QC, Benjamin Williams QC and Rupert Paines (instructed by DWF) for the defendant.


Picture credit: Elliott Brown, Creative Commons Licence

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Costs News
Published date
31 May 2018

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