Signia Wealth Ltd v Marlborough Trust Company Ltd & Anor

A claim falls within the costs management regime where the relevant claim documents do not state a value exceeding the applicable threshold. The court must decide whether the litigation can be conducted justly and at proportionate cost without a costs management order. Relevant considerations include the nature and complexity of the claim, the costs incurred and forecast, the court’s remaining ability to control costs, any proven inequality of arms, and differences between the parties’ budgets.

A split trial is a pragmatic case-management decision. The court should consider trial preparation, witness inconvenience, complexity, prejudice, likely costs savings and the possibility of a clean division between issues. Where valuation evidence is relevant to the principal issues, a split trial may be inappropriate.

This was the first case management conference in a heavily contested claim concerning the departure of the second defendant, formerly the claimant’s chief executive officer. The claimant sought declarations concerning the termination of her employment and the effect on her entitlement in respect of shares held by the first defendant as trustee. The second defendant brought an additional claim for declaratory and financial relief, including allegations of conspiracy.

The court had to decide whether the claim should be removed from the costs management regime and whether the trial should be split so that share valuation issues were determined separately.

1. Costs management. The claim was within the costs management regime because neither the claim form nor the additional claim stated a value exceeding £10 million. Under CPR 13.15(2), the court had to be satisfied that the claim could be conducted justly and at proportionate cost without a costs management order. It was not so satisfied.
2. The relevant considerations included the nature of the claim, the total costs, the balance between incurred and future costs, any evidentially established inequality of arms, and differences between the parties’ budgets. The claim involved substantial future expenditure and significant proportionality concerns. A costs management order was therefore appropriate, and directions were given for a costs management conference.
3. Split trial. The approach described by Hildyard J in Electrical Waste Recycling Group Ltd & Ors v Phillips Electronics UK Ltd & Ors [2012] EWHC 38 (Ch) was adopted. The decision whether to split a trial is pragmatic and case-specific. The court must consider the advantages and disadvantages of separate trial preparation, inconvenience to witnesses, complexity, prejudice, likely costs savings and whether a clean split is possible. CPR 1.4(2)(i) supports managing as many issues as possible at one hearing, but creates no presumption against a split trial.
4. A split trial was inappropriate. The anticipated saving of about £300,000 was likely to be outweighed by the cost of a second trial. Valuation evidence was materially connected with the second defendant’s case and with issues concerning her performance and the company’s financial position. There was a substantial risk of duplicated evidence or an inadequate evidential basis at the first trial.
5. The trial was directed to determine all issues, with expert evidence. Expert reports were to be served sequentially, with the defendants serving first, because that would identify their valuation case and facilitate a targeted response.

First-instance case management ruling. No appellate decision is stated in the judgment.