HT-2022-000132 - [2025] EWHC 1522 (TCC)

The Scoring Claim was issued in April 2022 and stayed from August 2022, pending claims seeking to set aside the Commission’s decision to award the Fourth Licence to Allwyn brought by Camelot UK Lotteries Limited (“Camelot”) (the Reserve Applicant in the Competition and previously incumbent provider) and International Game Technology Plc and associated companies, a subcontractor to Camelot. The stay was lifted in January 2024 and the Modifications Claim was issued shortly thereafter.

On 26 June 2024, the court ordered that the Scoring Claim and the Modifications Claim should be jointly managed and that a “Stage 1 Trial” on liability should take place in the Autumn of 2025. At the same time, the court granted permission to the Interested Parties to participate at the Stage 1 Trial (including permission to file a statement of case and evidence and to make oral submissions and cross-examine witnesses) in so far as they had a separate interest to the Commission. In a judgment given by Waksman J on 10 June 2024, he observed that it was “perfectly obvious” that the Interested Parties “have separate and distinct interests which they are entitled to protect at trial”.

In a letter dated 5 September 2024, Hogan Lovells International LLP (“Hogan Lovells”), solicitors acting on behalf of the Commission, wrote to Bryan Cave Leighton Paisner LLP (“BCLP”), solicitors acting on behalf of the Claimants, raising concerns about the Claimants’ financial position. At this time Hogan Lovells estimated that the Commission’s costs of the Stage 1 Trial were likely to exceed £10 million and that, in the event of the claim proving unsuccessful, there was potential for the Claimants also to be liable for the costs of the Interested Parties. Hogan Lovells asked how the Claimants would be able to pay any adverse costs order. On 26 September 2024, Quinn Emanuel Urquhart & Sullivan UK LLP (“Quinn Emanuel”), solicitors for Allwyn, wrote to BCLP raising similar issues and confirming Allwyn’s intention to seek an order for security for costs in the event of failure of the claim.

Correspondence then ensued over the course of several months, during which BCLP explained that the Second Claimant intended to meet any future costs liability from the substantial assets available to it from within its corporate group, the Northern & Shell PLC Group (“the Group”), specifically from a wholly owned subsidiary called Northern & Shell Properties Limited (“N&S Properties”). The parties engaged in discussions as to the terms of suitable security but, on 26 March 2025, the Commission issued an application for security for costs (“the GC Application”). This was swiftly followed by a similar application from Allwyn (“the IP Application”).

The Claimants oppose both applications. In respect of the IP Application, they contend that Allwyn lacks standing to bring the application, or put differently, that the court lacks the necessary jurisdiction to grant it. The Claimants accept that the Commission has standing (as Defendant in the proceedings) to bring the GC Application, but they submit that there is no reason to believe that the Claimants will be unable to pay the Commission’s costs if ordered to do so – i.e. the threshold ‘impecuniosity condition’ for the grant of security for costs is not met. If they are wrong about Allwyn’s lack of standing, the Claimants repeat this argument in opposition to the IP Application.

In the event that, contrary to the Claimants’ arguments, the court finds that the threshold condition is met in relation to the GC Application, the Claimants offer a Guarantee to be provided by N&S Properties in the sum of £15 million (the terms of which are acceptable to the Commission). The Claimants are prepared to give similar security to Allwyn in the event of the IP Application being successful, albeit that the guarantee from N&S Properties would be limited to £4.6 million having regard to alleged delay in making the IP Application.

If the court considers it necessary and appropriate, the Claimants have offered to provide an undertaking to the court in terms to which I shall return in a moment.

There was debate at the hearing over whether (subject only to arguments as to costs) the Claimants and the Commission had effectively compromised the GC Application in correspondence shortly before the hearing. The Claimants deny this is so on the basis that in all of their open negotiations with the Commission over the terms of the proposed Guarantee they have always maintained the position that the Commission has no entitlement to security. Beyond observing that it is perhaps unfortunate that the court has been troubled with the merits of the GC Application in circumstances where the parties to that application appear to have found a satisfactory means of resolving the issue without the need for any payment of money into court, I need say nothing further about this at present. It is no doubt an issue that will feature in both sides’ arguments on costs in due course.

The hearing was listed for half a day, which I observed at the outset was very tight. The parties had sensibly agreed that they would limit their submissions so as to ensure that they each had a similar amount of time, but this meant that it was only possible to deal swiftly with the authorities on which particular reliance was placed and there was little reference to the evidence filed by each party. I have read all of that evidence and take it into account in this judgment, but, in common with the parties, I do not propose to deal with it in more detail than is necessary.

Against that background I turn first to address the applicable legal principles.