A claimant who secured £2 in nominal damages has been told they face a substantial costs bill for turning down an earlier offer to settle.
In Marathon Asset Management LLP & Anor v Seddon & Ors, Mr Justice Leggatt said investment management business Marathon had in effect suffered a defeat in failing to secure £15m claimed from two departing staff members.
James Seddon and Luke Bridgeman were both pursued in the courts for misuse of data after files were copied before their departure from the business, but after a nine-day hearing Leggatt ruled last month that damages should be minimal because Marathon suffered no loss.
The judge returned to the issue in the Commercial Court this week to decide costs and consider whether to depart from the general rule that a party winning nominal damages should pay the defendants’ costs.
In the judgment, it emerged that Seddon and Bridgeman had made a joint offer to settle the claim for £1.5m in February 2016.
Leggatt said this offer had been a ‘game changer’ which cast Marathon’s subsequent pursuit of the claim in a very different light.
‘Marathon’s decision not to accept the offer of £1.5m and instead to pursue a claim for what I described in the main judgment as "jackpot" damages makes it fair, in my opinion, to treat Marathon as litigating thereafter entirely at its own risk and potential cost.'
On Bridgeman, Leggatt said it was right to hold him responsible for the costs incurred in carrying out investigations which led to the misuse claim.
But once Bridgeman had returned all files and admitted liability for breach of contract in January 2014, the dispute switched to quantum of damages. This did not, said the judge, justify departing from the general rule about liability for costs.
‘A party which pursues a claim for damages for misuse of confidential information without evidence of any significant misuse, but in the expectation that such evidence will or may be uncovered through the litigation process, takes the risk that such evidence will not be uncovered because it does not in fact exist,’ said Leggatt.
The judge ruled Marathon should pay all Bridgeman’s costs of defending the claim after January 2014.
On Seddon, the costs issue differed as he had denied participating in the copying and removal of confidential files. The court found Seddon’s evidence about copying the files to be ‘false’.
Leggatt said Seddon should be entitled to recover 50% of his costs of defending the initial misuse claim, and the whole of his costs from February 2016 when the action was begun.
Maria Frangeskides, partner at London firm Orrick, which represented Seddon, said the judgment allows her client to move forward with his career.
She added: ‘We are gratified the court has agreed that Marathon should not win the jackpot damages it sought having suffered no financial loss.’
The litigation team also included Amanda Voss, Marcus Holmstroem, Harry Denlegh-Maxwell, Max Iles, Emily Yung, Charles Sheldon and Kevin Wong.