[2025] EWHC 1930 (Comm)

It should be referable only to the additional costs of the personal claims (i.e. the claims made against the First to Fourth Defendants);

It should cover only future costs, not incurred costs (given in particular the lateness of this application);

It should be for only a reasonable and proportionate part of those costs;

If the Court is minded to make any significant order for costs, an initial tranche should be payable within 28 days, with the Defendants having liberty to apply in the event that the parties cannot agree later tranches.

The question of the quantum of the additional costs of the personal claims against the First to Fourth Defendants does not arise because I propose to order security for costs in respect of the costs of all the Defendants. I do not need to investigate Mr Wilson’s granular submissions about how to strip out those costs and what they should be.

I do not intend to restrict the order for security for costs to future costs only. Although the application could and should have been brought earlier, it would to my mind not be fair to limit the Defendants to future costs where the lateness has caused no prejudice to Cedar Mundi, and the delay is not particularly egregious. However, I do see force in Cedar Mundi’s submission that sum of £447,522.68 incurred by Cedar II in its own claim should be disallowed because, but for the Dumrul undertaking, the Crabtree principle would have applied to have knocked it out anyway; and in any event they are not costs incurred by the First to Fourth Defendants. The pertinent question is whether by giving the Dumrul undertaking security should extend to those costs. I do not see why it should not, since they are costs as much attributable to the costs of Cedar II’s claim as to the counterclaim. However, any security for that amount should only be given to Cedar II and not the First to Fourth Defendants not least since those legal costs will only have been incurred by Cedar II for its own benefit. It is unlikely that the First to Fourth Defendants would have agreed to be liable for them, and they have not said that they have so agreed. I propose that the order for security should cover those costs, but the order must be clear that security in respect of those specific costs is put up only in favour of Cedar II and not the First to Fourth Defendants.

I agree with Cedar Mundi that the quantum of the security should be for the reasonable and proportionate part of the Defendants’ costs. The applicable principles were set out by Henshaw J in Pisante v Logothetis [2020] EWHC 3332 at [88] and are not in dispute before me. The Defendants seek just under 75% of the total past incurred and future estimated costs which in their May spreadsheet stood at £3,346,916.94. Although, as Cedar Mundi submitted, this is a complex case, I see no reason to depart from the normal expected proportion of recoverable costs after a detailed assessment, namely 65%: see for example Peak Hotels and Resorts Ltd v Tarek Investments Ltd [2015] EWHC 386, at [92], Henderson J. I would also apply a further discount of 5% to reflect the fact, as I see it, that the Defendants have chosen to staff the case with two Grade A and one Grade B solicitors with no Grades C or D solicitors. I have no difficulty with the hours or the rates per se, given the nature of the case, but I do think that savings could be made by using more junior solicitors. I am not able to say, as Mr Wilson submitted, whether the rates for experts are or are not excessive, or whether the incurred costs thus far are “unusually high”, or whether the future time estimates are “at the very top end of what might be incurred”. My overall assessment is that the amount of security to be provided to Cedar II is £2,008,149.60, which is 60% of the total of £3,346,916.94. For convenience I round that down to a clear £2 million. So far as security to be provided to the First to Fourth Defendants is concerned, it will be limited to £1,552,477 out of the £2 million to reflect my decision in respect of the sums incurred by Cedar II of £447,522.68 I have referred to above.

I see no reason to depart from the usual order that the full amount of security should be provided within 14 days. Although Mr Wilson sought a more attenuated order, with a first tranche in 28 days and liberty to the Defendants to apply thereafter for further tranches, I saw no evidence to justify such an order, which to my mind would prejudice the Defendants and only encourage further dispute and add further to the costs.