CREDICO MARKETING LIMITED & Anor v BENJAMIN GREGORY LAMBERT & Ors

Where an appellate decision materially changes the outcome of earlier proceedings, the court may postpone determination of costs until a later assessment resolves the parties’ relative success. This is appropriate where the overall winner cannot yet be identified, particularly because damages remain uncertain and the result may affect an issue-based costs assessment. The court should consider the significance of each issue in the litigation, rather than treating overlapping evidence or consequential relief as making an unsuccessful central issue insignificant. An interim payment on account should be refused where the eventual costs order might be no order, or where the amount of any award cannot reasonably be estimated.

The ruling concerned the costs of a speedy trial between marketing companies and the defendants who operated a marketing company. In the Main Judgment, the court held that pre-termination and post-termination restraints were binding, granted relief concerning contractual undertakings, and rejected a claim for misuse of confidential information: [2020] EWHC 1504 (QB).

The Court of Appeal later dismissed the appeal concerning the pre-termination restraint but allowed the appeal concerning the post-termination restraint, holding it unenforceable: [2022] EWCA Civ 864. It remitted the costs issue for reconsideration. The question was whether costs should be determined immediately or deferred until damages had been assessed, and whether an interim payment should be ordered.

1. Costs deferred. The court postponed determination of the costs of the speedy trial until assessment of damages for breach of the pre-termination restraint. The Court of Appeal’s decision had substantially altered the litigation outcome. The enforceability of the post-termination restraint had been a central issue, notwithstanding that equivalent practical relief was available under the undertakings.
2. The court could not yet determine the overall winner or make a fair issue-based costs order. The claimants had succeeded on the pre-termination restraint, but the value of that success depended on the damages eventually awarded. Those damages might be very small. The significance of the unsuccessful post-termination issue meant that the claimants could not properly be treated as the unequivocal victor at that stage.
3. The court rejected the argument that costs should largely be attributed to the successful pre-termination issue because much of the evidence overlapped. The evidence had been adduced to obtain rulings on both restraints. Nor was the evidence concerning the parties’ businesses equally necessary to establish the enforceability of the undertakings, which had been voluntarily given to avert proceedings.
4. The approach was consistent with the observation in Unwired Planet International Limited v Huawei Technologies Co & Ors that costs may appropriately be postponed where the eventual outcome may affect entitlement to costs.
5. No interim payment. No interim payment on account was ordered. There was a real possibility that the eventual order would be no order as to costs or an issue-based order producing the same result, and the amount of any future award could not presently be estimated. Costs remained reserved, with liberty to apply and liberty for short written submissions after assessment of damages.

• Court of Appeal allowed the defendants’ appeal concerning the post-termination restraint, dismissed the appeal concerning the pre-termination restraint, and remitted the costs issue for reconsideration: [2022] EWCA Civ 864.
• High Court (Queen’s Bench Division) reconsidered the costs of the earlier speedy trial and postponed determination pending assessment of damages.