“Not disproportionate” to spend £450,000 to recover £35,000, High Court rules

It was not disproportionate for a party to spend up to £450,000 to recover £35,000 because it achieved other, non-monetary relief too, the High Court has ruled.

Nicholas Vineall QC, sitting as a deputy High Court judge, was giving judgment in a case where all the issues had settled on the eve of trial save as to costs.

Marcura Equities FZE and Anor v Nisomar Ventures Ltd and Anor [2018] EWHC 523 (QB) was a claim relating to the alleged unlawful disclosure and use of confidential information.

The case settled with the defendants paying £35,000 and being required to deliver up all property within their control that belonged to the claimants, and not to disclose it to third parties, and also to provide witness statements setting out, among other things, what confidential information had been received and used. It recorded no admission of liability.

Following the guidance of Lord Neuberger when he was Master of the Rolls, in M v London Borough of Croydon [2012] EWCA Civ 595, about dealing with cases like this, Judge Vineall said: “I cannot determine any of the many matters which were in dispute between the parties. However, I can compare the parties’ pleaded position with what was in fact obtained by the claimants under the eventual settlement to see whether the consent order involves the claimants getting substantively all of the relief which they claimed.”

He decided that they did, by achieving the injunctions, except for a springboard injunction. The claimants had also sought damages or an account of profit. That claim was never quantified, although the claim form sought damages in excess of £200,000. “I therefore consider that this is not a case in which I should decline to make any order in relation to costs. It also follows that the starting point must be that the defendants should pay the claimants’ costs.”

The defendants had made an open offer to contribute £25,000 to the claimants’ costs, which the judge assumed was in addition to the injunctive relief, but Mr Vineall found that it was reasonable for the claimant to refuse this.

“The defendants’ assessment was that the claimants’ reasonable costs to date were about £70,000, and they knew or suspected that the claimants’ actual costs up to that point were in the region of £108,000.

“In my view, even on the assumption I have made, the offer is materially less favourable to the claimants than the settlement they have in fact achieved. The offer to contribute only £25,000 to the claimants’ costs was not, in my view, a realistic or reasonable offer, and I do not consider it was in any way unreasonable of the claimants not to have accepted it.”

The defendants also argued that the £35,000 was “so modest” that it could not be used to help justify the award of the claimants’ costs of £450,000.

Judge Vineall said: “In assessing the extent to which the agreed order represents success for the claimants, it is also relevant to bear in mind that the trial in this action was to decide all issues apart from quantification of damage. If the trial had proceeded as planned and the claimants had obtained an order for damages to be assessed, it could hardly at that stage have been said that they should not have their costs to date because the sum to be assessed might yet turn out to be modest.

“In my view, the consensual payment of £35,000 cannot be characterised as a sum that is nominal or trifling, and in any event it would be wrong to focus solely on the agreed payment of £35,000 in determining who the successful party is.

“Nor do I consider that it is remotely right to characterise this as a claim in which the costs are disproportionate because £450,000 has been spent to recover just £35,000. That ignores the important delivery up and other injunctive relief that has been obtained.

“Accordingly, I reject the suggestion that the fact that only £35,000 has been recovered displaces the starting point that the claimants are the successful party for costs purposes. Nor do I accept the contention that it demonstrates that the costs claimed are disproportionate.”

As a result, the judge ordered that the claimants recover the whole of their costs, subject to detailed assessment.

He ordered payment on account of £231,000, which was 70% of £330,000 – the sum he estimated the claimant may actually have incurred given that the £450,000 budget included provision for trial. The percentage recognised that there were quite a lot of incurred costs before the budget was set.

Adam Solomon QC and Sophia Berry (instructed by Holman Fenwick Willan) represented the claimants, with Christopher Quinn (instructed by Collyer Bristow) for the defendants.

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Costs News
Published date
02 May 2018

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