Claimants who brought an unsuccessful £1bn claim that would have effectively brought the National Lottery to a standstill have been told they must face the full force of costs consequences.

Mrs Justice Joanna Smith DBE ruled in The New Lottery Company Ltd & Anor v The Gambling Commission that the claimants should pay indemnity costs for the entirety of the claim after its ‘serious and highly unreasonable’ conduct of the case.

The claimant company made a late bid to reduce its costs liability by 20% - which would have amounted to slicing around £4m from the bill – but the judge said there was no basis for this argument.

The New Lottery Company had challenged the Gambling Commission’s handling of the competition for a National Lottery licence following its awarding to a different company in 2022. It was billed as the ‘most financially significant procurement process in UK history’.

The judge described how there were numerous serious and wide-ranging allegations of impropriety and dishonesty made over an extended period of time. Many were dropped shortly before or at the trial in ‘wholly unsatisfactory and unreasonable circumstances’, with Smith dismissing the remainder in a judgment earlier this year.

By the end of the trial, the list of 81 issues had been substantially reduced, often without any proper notice being given to the other parties.

The judge said: ‘No explanation has ever been provided by the claimants for their abandonment of any of the issues, nor has any reason been given by them for what I consider to be a cavalier and highly unusual and unreasonable way of proceeding.’

The scale of the abandonments caused significant disruption to the court and to other parties and prejudice to the defendants, as they accrued costs trying to address issues which would then be dropped.

The judge said allegations advanced were ‘weak and speculative’ from the outset and doomed to fail years before the trial.

Addressing the costs consequences, the claimants said the court could ‘salami slice’ orders by dividing costs by reference to individual issues or periods of time. This was rejected as the defendants had been forced to spend money throughout the case dealing with the fluctuating allegations.

‘The pleadings were inadequate and unparticularised from the outset, the claims were weak and none of these issues was remedied prior to trial,’ added the judge.

‘It plainly warrants an order for indemnity costs in relation to the entirety of the proceedings… there is a need to mark disapproval on the part of the court of such extraordinary conduct by the making of such an order.’

Having established that the claimants will pay the defendants’ costs in full, those costs will now go to assessment.