Agents' Mutual Ltd v Gascoigne Halman Ltd (t/a Gascoigne Halman)

Security for costs should reflect the reasonable and proportionate costs likely to be recoverable on a standard assessment, rather than the amount a defendant chooses to spend. A defendant seeking substantial additional security should provide sufficiently detailed evidence of rates, hours and the calculation of each head of costs. The court may use the claimant’s own costs budget as a cross-check, while making appropriate adjustments for differences in work and the proceedings. The claimant’s financial position may justify staged payment, but does not necessarily justify reducing the total security. Alleged prejudice from the absence of an undertaking to compensate for the effect of security must be supported by evidence.

Agents’ Mutual Limited brought competition proceedings concerning membership rules for its online property portal, including a one-other-portal restriction. Gascoigne Halman challenged those rules under the Chapter I prohibition and sought additional security for costs. The claimant had already provided £500,000 and offered a further £500,000. Gascoigne Halman sought a further £1 million, relying on a costs estimate exceeding £2.8 million for the competition trial.

The outstanding application concerned the appropriate amount of security and the dates for payment. The court considered the adequacy of Gascoigne Halman’s costs evidence, the claimant’s detailed budget, and the alleged prejudice to the claimant’s working capital.

1. Application granted in part. Gascoigne Halman’s costs estimate of over £2.8 million was seriously disproportionate for a nine-day trial involving a single expert. The court considered that the costs would be substantially reduced on standard assessment.
2. A defendant seeking security is not required to use the precise Precedent H form. However, particularly where a substantial sum is sought, it should provide a full schedule explaining the sub-totals, hourly rates and estimated hours. The one-page schedule provided was materially inadequate.
3. The claimant’s detailed budget of £1.86 million was a relevant benchmark. Allowance was made for the fact that the proceedings were heard with the related action and that the defendant’s reasonable costs of the pre-trial review might exceed the claimant’s estimate. A reasonable standard-assessment figure of £1.9 million was adopted.
4. The court ordered security at 70 per cent of that figure. After crediting the £500,000 already provided, the additional security required was £830,000.
5. The court considered the principle identified in Stokors SA v IG Markets Ltd [2012] EWCA Civ 1706, that an undertaking to compensate for loss caused by security may be relevant to the balance of prejudice. On the evidence, however, the alleged effect on marketing expenditure was insufficiently established to justify reducing the amount.
6. The claimant’s limited working capital and monthly membership income justified staged payment, but not a reduction in the total. Payment was ordered by 30 September 2016 (£280,000), 31 October 2016 (£250,000), and 30 December 2016 (£300,000).

The application was issued in the High Court on 20 June 2016. It was partly determined by an order of Sir Kenneth Parker dated 5 July 2016, with the balance adjourned. The remaining application was determined by the High Court in this judgment.