Marcura Equities FZE & Anor v Nisomar Ventures Ltd & Anor

Where parties settle all substantive issues but leave costs to the court, the court may determine costs, but need not do so if the exercise would be disproportionate or the result cannot fairly be assessed. Where a claimant obtains substantively all the relief claimed, the claimant will ordinarily be the successful party and recover its costs, even though relief was granted by consent and damages are modest. In confidential-information litigation, injunctive and delivery-up relief may be more important than monetary recovery. The court should assess the settlement as a whole, including the relief obtained and relevant offers, rather than focusing solely on the sum paid. A payment on account should reflect the likely recoverable costs, while allowing for genuine assessment risks.

The claim concerned alleged unlawful disclosure and use of confidential information relating to software developed by the claimants. Before trial, the parties agreed an order requiring the defendants to pay £35,000 and providing substantially permanent injunctive and delivery-up relief. Liability was not admitted, and the consent order left costs for determination.

The court had to determine the form of final order, the successful party, the effect of the defendants’ open settlement offer, the relevance of the damages recovered and the parties’ conduct, the basis of assessment, and the amount payable on account. It also considered whether evidence of a settlement meeting could be admitted.

1. The court refused to enter judgment for the claimants because the settlement did not adjudicate the allegations, and refused to stay the action as a Tomlin order because that structure had not been agreed. The appropriate order recorded the consent order and made no further order save as to costs.

2. A settlement meeting described only as without prejudice was not shown to be without prejudice save as to costs. The evidence of what was said at the meeting was therefore excluded.

3. Under CPR 44.2, the starting point was that the successful party should receive its costs, subject to all the circumstances. Applying the approach in M v London Borough of Croydon, the court could compare the relief claimed with the relief obtained, even though there had been no trial.

4. The claimants obtained substantively all the relief claimed, apart from a springboard injunction. The permanent protection of confidential information and delivery-up relief were important elements of the claim. The defendants’ open offer was ambiguous and materially less favourable than the eventual settlement. It was not unreasonable for the claimants to reject it.

5. The modest damages payment did not displace the conclusion that the claimants were successful. In a confidential-information claim, success cannot be assessed solely by asking who paid money to whom. The claimants were entitled to their costs on the standard basis, subject to detailed assessment. There was no basis for indemnity costs.

6. The defendants were ordered to pay £231,000 on account of costs, representing 70% of the court’s cautious estimate of £330,000. The £100,000 paid into court as security and in support of the cross-undertaking was ordered to be returned.