Genius Sports Technologies Limited & Ors. v Soft Construct (Malta) Limited & Ors.

Representative parties joined to a claim are bound by findings arising from the pleaded defence. They need not also be joined to a counterclaim where the counterclaimant does not seek joinder, the representative parties oppose it, and the defence provides the necessary basis for binding effect.

A costs-capping order is a last-resort form of costs control. It may be imposed where costs are in the interests of justice, there is a substantial risk of disproportionate expenditure, and that risk cannot adequately be controlled by case-management directions and detailed assessment. In complex and unpredictable litigation, an overall cap may be preferable to siloed budgeting. The parties’ importance, the value at risk and complexity do not justify unlimited expenditure.

The proceedings concerned complex intellectual-property and competition claims brought by Genius against Soft Construct and other defendants. Several representative defendants had been joined to Genius’s claim but were not defendants to Soft Construct’s counterclaim.

The court considered whether those parties should be joined to the counterclaim and whether the proceedings required costs budgeting, costs management or a costs-capping order. The parties ultimately agreed that some form of cost control was required. The central issues were whether the representative defendants should be joined and whether the statutory conditions for a costs cap were met.

1. Joinder. The representative defendants were bound by findings arising from Genius’s claim and Soft Construct’s pleaded defence because they had been joined as defendants to that claim. That binding effect did not depend on their being parties to the counterclaim.
2. Under CPR 19.2, the court had jurisdiction to join them to the counterclaim. However, Soft Construct did not seek joinder, the representative defendants opposed it, and no application had been made. In those circumstances, joinder would require a compelling reason. None existed. The counterclaim was therefore irrelevant to the binding effect produced by the defence.
3. Costs-control jurisdiction. The court held that the conditions in CPR 3.19(5) were satisfied. A costs-control order was in the interests of justice. There was a substantial risk that costs would be disproportionately incurred. Detailed assessment and ordinary case-management directions would not adequately control that risk.
4. The court treated costs capping as a last resort, consistently with CPR 19.5. Costs budgeting by stages was unsuitable because disclosure, expert evidence and the allocation of work between stages remained complex, contentious and unpredictable. Siloed budgets could not reliably reflect the way costs would be incurred and could operate as mini-caps.
5. The appropriate cap had to be set just above the amount likely to be recoverable by a successful party on detailed assessment on the standard basis. The importance and value of the litigation, its complexity, foreign-language documents and disclosure were relevant, but neither value nor complexity was a blank cheque. Future costs for Genius and Soft Construct were each capped at £5 million, subject to an application under CPR 3.19(7). The representative defendants were outside the regime.