QB-2021-004022 - [2025] EWHC 1701 (KB)

From both sets of submissions, it is clear that the most significant remaining area of dispute is in relation to costs. In principle, the Claimant is entitled to his costs in respect of his claim against the First Defendant whereas the reverse is true as far as his claim against the Second and Third Defendants is concerned. As to that, the starting point is that they are entitled to recover their costs of defending the claims brought against them in their capacity as directors of the First Defendant. I will deal firstly with the issue of Claimant’s successful claim against the First Defendant.

In her draft order, Ms Grossman on behalf of the Claimant suggests that the order should simply read that the First Defendant “shall pay the Claimant’s costs of and occasioned by the action (i.e. the combined costs of the claim and the counterclaim)”. Mr Innes’ draft acknowledges that the First Defendant should pay the Claimant’s costs of the action against that Defendant “only (i.e. excluding the costs of the claim against the Second and Third Defendants)”. It seems to me that on this point, Ms Grossman’s draft is to be preferred – if the award is in terms made against the First Defendant, it is not then necessary to say in terms that it is not being made against the Second or Third Defendants. The point is however well made by Mr Innes that the Claimant is not entitled to all of the costs incurred in the litigation as he did not succeed in his claims against either of the two individual Defendants.

The question then arises as to how one goes about determining what proportion of the Claimant’s overall costs of the litigation can properly be regarded as attributable to the claim brought against the Second and Third Defendant’s as opposed to the First Defendant. There are, it seems to me, two potential ways to go about this – first, one could simply say that it is a matter for the costs judge to determine in the event that the parties are unable to reach agreement on the point. Alternatively, I could make an assessment myself based on the fact that I conducted the hearing and have a good understanding of the issues, documents and evidence involved in the two claims.

It seems to me that the latter option is to be preferred – were I to go with the first option, I would, it seems to me, be putting the costs judge in a potentially very difficult position in trying to determine what proportion of the overall costs should be regarded as attributable first, to the claim against the First Defendant and secondly, the claims against the Second and Third Defendants. As to that, I take account in particular of the fact that a significant part of the cross-examination of the Second Defendant was taken up with trying to establish that his conduct was such as to amount to a breach of his duties as a director. The same is true of M Grossman’s closing arguments (both written and oral). Whilst it is plainly the case that any percentage assessment from me will lack any precise calculation as to how the cost should fall, I nevertheless take the view that a broad-brush assessment can and should be made. In doing so, I come to the conclusion that the Claimant should be entitled to recover 75% of his costs incurred in bringing the action as a whole, that reduction being referrable to the fact that he succeeded against only one of the three Defendants.