Hegglin v Person(s) Unknown & Google Inc

A costs capping order requires a substantial risk that costs will be disproportionately incurred and a conclusion that the risk cannot adequately be controlled by case management or detailed assessment. Detailed assessment principally controls recoverability, but may also deter disproportionate expenditure. The stage at which the application is made is relevant. Where most costs have already been incurred and detailed assessment is expected to provide effective protection, a costs cap may be refused. A costs management order under CPR 3.15 and 3.18 is distinct from a costs cap. It regulates the budget and informs detailed assessment, without itself limiting recoverable costs unless varied.

The claimant brought proceedings concerning allegedly false and abusive internet publications and search results. The first defendant had not been identified or joined. A speedy trial had been directed by Bean J after an interim injunction was refused.

At this pre-trial hearing, the claimant sought costs capping and costs management orders, together with further directions. Google sought answers to Part 18 requests and disclosure. The central issues were whether the requested information and documents were necessary and proportionate, whether a costs cap was available under CPR 3.19, and whether Google's costs budget should be reduced under CPR 3.15 and 3.18.

1. Applications for information and disclosure. An order under Part 18 should be made only where necessary and proportionate to enable a party to prepare its case or understand the case it must meet. Google's requests concerning the claimant's business, professional and family connections were refused because they were not shown to be necessary or proportionate. The claimant was, however, directed to serve an amended disclosure statement explaining the loss of deleted emails and addressing their possible relevance.
2. Costs capping. Under CPR 3.19(5)(c), the court had to consider whether the risk of disproportionate costs could adequately be controlled by case management directions and detailed assessment. The judge followed and adopted the construction in Tidal Energy Limited v Bank of Scotland plc [2014] EWCA Civ 847 and Black & Others v Arriva North East Ltd [2014] EWCA Civ 115. Cases satisfying the statutory condition were expected to be rare, but the condition could not be defined so narrowly as to deprive the rule of content.
3. The relevant risk was disproportionate incurring of costs, rather than disproportionate recovery. Detailed assessment could deter future expenditure, but where expenditure had already been agreed and incurred it principally controlled the amount recoverable from the opposing party. Given the late application and the expected effectiveness of detailed assessment, the costs capping application was refused.
4. Costs management. A costs management order under CPR 3.15 and 3.18 was not a costs cap. It did not itself limit recoverable costs, but required the detailed assessment judge to have regard to the approved budget and depart from it only for good reason. The court reduced three items in Google's budget, allowing £98,000 for trial counsel, £125,000 for solicitors' trial costs and £25,000 for dealing with the claimant's expert report.

First-instance pre-trial decision. The judgment records that Bean J had previously refused an interim injunction and directed a speedy trial.