Ethan Thomas Wragg & Ors v Opel Automobile GmbH & Ors

A party’s actual or potential limitation defence is a material factor when the court decides whether there is a serious issue to be tried on an application for service out of the jurisdiction. Material non-disclosure in a without-notice application may justify an indemnity costs sanction and the loss of costs otherwise recoverable, both to mark the court’s disapproval and to deter similar conduct. Permission to appeal is refused where the challenged decisions are discretionary, have no real prospect of being reversed, and raise no issue of general application or other compelling reason. Where costs are payable subject to detailed assessment, the court must order a reasonable payment on account unless there is good reason not to do so.

This was a consequentials hearing following the applications judgment, [2023] EWHC 2632 (KB), concerning applications by the German defendants in numerous group claims. The earlier judgment found material non-disclosure of limitation defences in without-notice applications for permission to serve claim forms out of the jurisdiction, while rejecting an alternative forum non-disclosure case and dealing with extension applications.

The court had to determine the appropriate costs sanctions, the costs of the applications, the German defendants’ application for permission to appeal, the form of order, and an interim payment on account of costs.

1. Costs sanction. The court imposed a sanction for material non-disclosure of limitation issues. The claimants were to pay the German defendants’ costs of that issue on the indemnity basis. They were also to forgo costs which they might otherwise have recovered on the extension applications. The general rule applied to the alternative forum issue, on which the German defendants had failed. The resulting order was payment by the claimants of 40% of the German defendants’ application costs on the indemnity basis, payment by the German defendants of 20% of the claimants’ costs on the standard basis, subject to the indemnity-principle issue, and no order for the remaining costs.
2. The sanction was justified because limitation was material to whether there was a serious issue to be tried on service-out applications. It also marked the court’s disapproval of material non-disclosure in without-notice applications and served a deterrent purpose. The sanction was moderated because the litigation was satellite litigation which had not advanced the substantive issues.
3. Permission to appeal. Permission was refused. The relevant determinations were primarily discretionary and the proposed grounds had no real prospect of success. The suggested wider issues concerning group litigation, proportionality, foreign service and mixed claims did not provide another compelling reason because the decisions concerned the particular circumstances of this litigation and proportionality already formed part of the overriding objective. The German defendants could renew the application before a High Court judge.
4. Interim payment. Under Civil Procedure Rules 1998 rule 44.2(8), a reasonable sum on account was required because there was no good reason to withhold one. Relevant factors included the total costs claimed, whether those costs appeared excessive, the indemnity basis of assessment, and any proper notional set-off. Indemnity costs were not penal in nature; they shifted the burden of demonstrating reasonableness to the receiving party, but did not permit unreasonable costs. An interim payment of £105,000 was ordered.

The judgment followed the applications judgment in the same litigation, [2023] EWHC 2632 (KB), which determined the underlying applications. The present judgment refused permission to appeal, subject to the defendants’ right to renew the application before a High Court judge.