Afrika & Ors v Cape Plc & Ors

In group litigation, cost-sharing orders must reflect the differences between collective proceedings and ordinary individual claims. The court should not make a presumptive order that common-issue costs will follow the outcome of those issues, because their significance may later prove academic. Settling claimants may remain subject to the ordinary quarterly cost-sharing mechanism where costs are agreed as part of the settlement. For discontinuing claimants, however, liability for common costs should ordinarily be determined after the common issues have been tried, when the court has the full picture and can make a just order. A standard rule requiring a discontinuer immediately to bear a share of common costs is too blunt and may give defendants a premature advantage. Future-looking cost-sharing orders remain subject to variation, and the appellate court may intervene where the order is inappropriate as a matter of principle.

Three appeals concerned cost-sharing orders in multi-party litigation: the MMR/MR vaccine claims, the oral contraceptive litigation, and claims by South African workers against an English holding company concerning asbestos exposure. The orders divided costs into individual and common costs and required quarterly calculations. A claimant who settled could recover or pay costs under the order, while a claimant who discontinued was immediately liable for individual costs and a several share of defendants’ common costs.

The High Court approved the order in the MMR litigation, and equivalent orders were made in the other proceedings. The claimants sought provisions postponing decisions on common costs until the trial of common issues. The central questions were whether presumptive costs orders should be made in advance and how common costs should be treated when claimants discontinued.

1. Appeals. The appeals were allowed in part. The proposed presumptive order that costs of common issues should follow the event was refused. The provision dealing with settlers was upheld. The provision dealing with discontinuers was amended.
2. Appellate approach. Although costs decisions ordinarily attract considerable appellate restraint, these orders were intended to govern future events in a developing jurisdiction. They were not entitled to special protection merely because they had been made at first instance. The ordinary burden remained on the appellants to show that the order was wrong or inappropriate.
3. Common issues. It was premature to prescribe that costs of common issues would follow the determination of those issues. The issues might prove wholly or largely academic, and the court at the end of the trial should remain free to make the order appropriate to the circumstances.
4. Settlers. Settling claimants did not require a presumptive alteration. Costs would ordinarily form part of the settlement discussions. The quarterly mechanism permitting recovery of individual costs and the relevant share of common costs was appropriate.
5. Discontinuers. Group litigation is fundamentally different from ordinary litigation because common or generic issues may be tried before their consequences for individual claims are known. A prima facie rule fixing a discontinuer’s liability for common costs at the end of the quarter was unfairly blunt and could give defendants a premature advantage. Liability for common costs and disbursements should therefore be determined after the trial of common issues, with permission to apply if no such trial took place. The order remained unchanged for claims dismissed by court order.
6. Alternative proposal. The suggestion that lead-action solicitors should recover common costs was rejected because it conflicted with the indemnity principle. Any abolition of that principle required primary legislation.
7. The respondents were ordered to pay 75 per cent of the appeal costs; there was no order for costs concerning Mr Fenwick’s clients; permission to appeal to the House of Lords was refused.

• High Court of Justice, Queen’s Bench Division. Master Ungley’s cost-sharing order was approved by Bell J in the MMR litigation, with equivalent orders in the other proceedings.
• Court of Appeal (Civil Division). The appeals were allowed in part. The order was varied so that liability for common costs of discontinuing claimants would be determined after trial of the common issues.