[2025] EWHC 2307 (KB)

The issues to be dealt with in Tranche 2 are summarised at paragraph 10 of the first CMH judgment. In essence, they deal with whether “defeat devices” were present in the vehicles; if they were, could they nonetheless be justified by reference to the Emissions Regulation (EC Regulation 715/2007); and if found to be defeat devices, whether they amount to a breach of contract or a breach of statutory duty?

The issues to be dealt with in Tranche 3 may be summarised as:

The Quantum Trial to deal with these issues has been listed for eight weeks. The PDD trial is listed for ten weeks starting in October to receive evidence with a further three weeks in the New Year for submissions. The defendants made repeated reference to the length of the Tranche 2 trial at thirteen weeks compared with the Tranche 3 trial of eight weeks to justify the argument that many of the phases of the budgets for Tranche 3 should be smaller than Tranche 2, not larger.

Similarly, as the period for the Second General budget is nine months (approximately April 2026 to December 2026) when compared with the First General budget of 22 months, the defendants said that the Second General GLO management costs should be less. (This particular argument did not apply to the Tranche 3 costs because costs prior to the CMH were claimed from the outset of the litigation as incurred costs.)

The defendants also made the point that no party has sought to vary the Tranche 2 CMO. Since it is the same case, it ought to be strongly persuasive as to what allowance would be reasonable and proportionate. The claimants’ response to this was generally that the “lived experience” of pursuing the claims in Tranche 2 was that they had required more time to be spent than had been expected when the first CMO had been made. In support of this argument, the claimants referred to some of the defendants’ figures where they were seeking greater sums than had been allowed in Tranche 2.

In some phases, such as disclosure and the individual statements of case, there was a complete disagreement as to whether the Tranche 2 figures were relevant. The defendants said that they were in the sense of providing a ceiling as to the recoverable costs. This submission was made on the basis that the disclosure in Tranche 2 was wider ranging and the scope was less certain whilst the statements of case were more complicated. The claimants said that the disclosure was in fact expected to be very significant and that, in any event, it involved a completely different exercise from disclosure regarding PDDs. In respect of the statements of case, whilst they might be less complex technically, the time spent would be greater because of the interaction with individuals rather than sample vehicles.

In our view, the defendants had the better of the arguments generally in respect of the comparison between Tranche 2 and Tranche 3. The amounts allowed for Tranche 2 (and not sought to be varied) are an obvious starting point for considering the work to be done in Tranche 3 by the same lawyers in the same litigation. Where there is a difference in the work required between the two Tranches, we expect the work to be less, rather than more, than in Tranche 2. Furthermore, with the court’s encouragement, there has been a considerable improvement in the co-operation between the parties since the start of the litigation and it is running rather more smoothly. Given that, and the continuing relevance of some earlier interlocutory determinations (e.g. as to de-designation, and disclosure) it would be expected that the procedural aspects, such as CMCs, would be dealt with more economically. In respect of phases such as statements of case, where the substance of the phase is plainly different, we would also generally expect the work to be less involved and therefore time consuming than for Tranche 2, despite the involvement of individual claimants.