Camberley Group Plc & Ors v Paul Foster & Ors

Under Civil Procedure Rules 1998, r 44.2, the overall winner is ordinarily awarded its costs, but the court must consider all the circumstances and may make an issue-based or proportionate order where success is divided. The order should reflect success on particular issues and the costs attributable to them, while avoiding liability for costs of claims in which a party had no involvement. Indemnity costs require conduct or circumstances outside the norm. Knowingly untruthful evidence may justify that basis of assessment, whereas an unsuccessful claim defended within the norm will ordinarily remain subject to standard assessment.

The judgment determined costs following an earlier trial judgment, [2022] EWHC 2643, concerning claims by three companies against three former employees. The substantive claims included breach of warranty, breach of contract, conspiracy, unlawful interference with contractual relations, misappropriation and unjust enrichment.

The claimants succeeded overall but recovered only limited sums on the damages and unjust enrichment claims. Different defendants were involved in different categories of claim. The issues were the allocation and basis of assessment of costs, and whether enforcement against the first defendant should be stayed pending financial remedies proceedings.

1. Costs allocation. The claimants were overall successful within CPR 44.2(2), but the defendants succeeded on significant issues. The court therefore made an issue-based order under CPR 44.2(4)–(6), rather than awarding an undifferentiated proportion of the claimants’ overall costs.
2. The corporate claimants were treated as one economic and litigation unit. It would have been artificial to allocate costs according to which company formally advanced a particular claim. The order instead reflected the distinct claims and the defendants’ involvement in them.
3. Mr Foster was ordered to pay all costs of the warranty claim. Mr Foster and Mr Pilling were jointly and severally liable for 66% of the costs of the damages claim. There was no order on the abandoned false-mileage claim. Mr and Mrs Pilling were jointly and severally liable for the unjust enrichment claim, subject to a £10,000 cap.
4. The approach was consistent with the guidance discussed from Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd and Grupo Hotelero Urvasco SA v Carey Value Added SL: the court should reflect success on separate issues and consider costs specific to each issue and costs common to several issues.
5. Basis of assessment. Costs were to be assessed on the standard basis except for the damages claim and claim 11. The conduct concerning the business plan, including fanciful and knowingly untruthful evidence, was outside the norm and justified indemnity costs under the approach explained in Excelsior Commercial and Industrial Holdings Ltd. The warranty claim did not meet that threshold.
6. Enforcement of the costs orders against Mr Foster was stayed pending the financial remedies hearing. The parties were directed to draw up an order reflecting the judgment.

First-instance costs determination following the court’s earlier judgment in the same proceedings, [2022] EWHC 2643.