A bid for a costs capping order (CCO), thought to be the first since the introduction of costs budgeting, has again been rejected after the Court of Appeal refused a defendant’s bid for permission to appeal.
Agribusiness giant PGI Group applied for a CCO in a group claim brought by 31 Malawian women over allegations of rape, sexual assault and harassment and at tea and macadamia nut plantations run by its subsidiary Lujeri.
It sought to cap the claimants’ future recoverable costs at £150,000 but this was refused by the High Court in October, with Mr Justice Cavanagh instead fixing the claimants’ costs budget at just under £850,000.
The claimants had at that point already incurred around £1.6m, while PGI had incurred £750,000 and its future proposed costs budget was £1.75m.
PGI sought permission to appeal Cavanagh’s decision from the Court of Appeal, arguing that he applied the wrong proportionality test and failed to take account of the costs already incurred. However, all of PGI’s grounds of appeal were held to have no realistic prospect of success by Lord Justice Coulson on Friday.
The judge noted that ‘CCOs are very rare’ and will only be made ‘in exceptional circumstances’, adding that ‘the costs budgeting regime, introduced after costs capping as part of the Jackson reforms, is widely regarded as a more scientific way of achieving the same goal’.
He said that a £150,000 CCO ‘would inevitably bring an end to the claim’ and therefore ‘amount to the striking out of a valid claim by the back door’.
Coulson accepted that ‘there may be cases in which the reasonable and necessary costs required to enable the claimant to fight the case through to trial were disproportionate, and would therefore justify a CCO in a lesser amount’.
However, he dismissed the contention that Cavanagh failed properly to take account of the costs already incurred, saying that PGI did not make ‘detailed submissions on the amount of those incurred costs, and what was unreasonable and disproportionate and why’.
Coulson said that CCOs were originally ‘something of a blunt instrument, designed to impose a summary cap on expenditure’.
‘But the subsequent changes to the CPR, and in particular the introduction of the new proportionality test, may make it harder to justify any CCO which does not involve a detailed consideration of both past and future costs,’ the judge added.
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