The High Court has delivered an interesting ruling on costs following an application to amend pleadings, which shifts the goal posts slightly regarding the usual provisions which would ordinarily apply.
In the case of Various Claimants v MGN Limited [2021] EWHC 771 (Ch), Mr Justice Mann dealt with a group litigation matter in which 29 Claimants sought to amend their Particulars of Claim to add new material. Some (not all) of those amendments were disputed by the Defendants, and at the Court’s direction a handful of cases were selected to be heard so that the results could then be applied by the parties to the remaining cases to produce an overall outcome.
Much of the debate centered on the way in which the case had developed in terms of disclosure. The trial in the litigation had taken place in 2015, based on disclosure which, in comparison with the documents which were available now, was limited. The increased disclosure allowed the Claimants to plead their cases much wider and more extensively.
When dealing with the costs of the amendments, Mr Justice Mann was invited by the Defendant to apply the ‘normal’ rule of costs of amendments, which is that those who obtain permission to amend are ordered to pay the other parties’ costs of and occasioned by the amendment. The Claimants did not accept this position, and in the words of Mr Justice Mann, ‘surprisingly’, sought the costs of the amendments themselves.
The rationale for this being the normal rule was surmised by Mr Justice Mann as being “in the normal case a party’s change of tack in the course of litigation is of that party’s own volition, and it is right that the other party should have the costs of that voluntary change, particularly where the amending party might have included the amendments in the initial pleading.”
He went further however, confirming that “It is not, however, an inevitable order.” Practically all costs were at the discretion of the Court as per CPR 44.2. It was confirmed, “that reasoning would not necessarily apply if the reason that the amending party seeks to amend is because the new information is important and comes to light only as a result of disclosure by the amended against party and the amending party cannot be expected to have pleaded it at the outset, particularly where it is said that there has been a cover-up of the activity in question. In those circumstances what seems to me to be the underlying rationale of the common rule does not necessarily apply. Some other order might well be appropriate.”
In view of the same, varying orders were made in respect of the different applications, including Costs Reserved and Costs in the Case.
The case highlights the importance of not accepting the norm when there are strong arguments in the alternative and submissions should be made in rebuttal both during discussions between the parties in attempting to reach agreement as to terms of a Consent Order, or before the Court.
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