Crossley v Volkswagen Aktiengesellschaft & Ors

Applicants for a group litigation order must allow sufficient time for pre-application coordination. The claims must be sufficiently developed for the group litigation issues, divergent causes of action, funding, insurance, costs arrangements, timetable and proposed solicitor structure to be identified. Complete agreement is unnecessary, but material differences must be understood and presented to the court.

Where a group litigation application is issued prematurely and pursued despite an unresolved dispute affecting representation, the court may order recovery of costs unnecessarily caused by that conduct. Such costs may be assessed on the indemnity basis where the circumstances are outside the norm. A directions hearing which would probably have been required in any event is not recoverable merely because the application was premature.

The judgment concerned applications by the Volkswagen defendants and dealer defendants for costs arising from the claimant firms’ application for a group litigation order in the VW NOx emissions litigation. The application was filed in October 2016 and generated several hearings before the substantive GLO hearing in March 2018.

The defendants alleged that the application had been issued and pursued prematurely, particularly while there was an unresolved dispute between Harcus Sinclair and Your Lawyers concerning a non-disclosure agreement and the representation of claimants. They sought costs for specified hearings, preparation and adjournment work, on the indemnity basis. The central issues were whether the application was premature, which costs were caused unnecessarily, and whether the circumstances justified indemnity costs.

1. Prematurity. A GLO application need not be wholly agreed when issued or heard. However, the claims must be sufficiently advanced for GLO issues and divergent causes of action to be identified; weak claims to be vetted; funding and after-the-event insurance to be arranged or substantially addressed; costs provisions and a realistic timetable to be discussed; claimant firms to have developed a common approach or identified their differences; and defendants to be engaged once a sufficiently coherent approach exists. The application here was issued prematurely.
2. Unresolved representation dispute. The dispute between Harcus Sinclair and Your Lawyers should have been resolved or determined, or one firm should have ceased acting, before the GLO application proceeded. The appropriate course after the January 2017 hearing would have been to stay the application with permission to restore it when the parties had a more cohesive approach.
3. Recoverable costs. The costs of the November 2016 hearing and January 2017 adjournment were unnecessarily incurred as a consequence of the premature issue and pursuit of the application. The same applied to the June 2017 hearing, preparation for the October hearing and the application to adjourn it. The dealer defendants were entitled to participate because the draft GLO identified claims against them.
4. The November 2017 directions hearing was different. Given the scale and complexity of the litigation, a directions hearing would probably have been required in any event. The claims for its costs were therefore dismissed and those costs remained costs in the GLO application.
5. Basis of assessment. Under Civil Procedure Rules 1998, rr 44.2 and 44.3, the circumstances were outside the norm. The application had been issued prematurely, pursued inappropriately when it should have been stayed, and had caused substantial unnecessary use of court resources. The defendants’ recoverable costs were therefore to be assessed on the indemnity basis. The applications were granted except as to the November 2017 hearing, with detailed assessment and payment on account as agreed.

First-instance decision. No appellate history is stated in the judgment.