Lloyds Developments Limited v Accor Hotel Services UK Limited

Where security for costs is ordered in a tranche payable six weeks before trial, and the trial is subsequently postponed, the court may vary the order so that payment falls due six weeks before the actual trial date. The fixing of an original trial date does not necessarily make the payment date immutable where that would defeat the order’s evident purpose.

The court may also order additional security where increased costs are supported by evidence or proper inference, including costs caused by applications and inadequate disclosure. It should scrutinise the level of costs and need not calculate security by applying mechanically the original percentage to expenditure.

The claimant sought variation of an order requiring payment of the final £600,000 tranche of security for costs six weeks before trial. The trial date originally fixed for 11 March 2024 was vacated, and no replacement date had yet been set.

The defendant sought payment of the £600,000 and relied additionally on increased costs incurred since the original security order. The issues were whether the final tranche remained payable on 29 January 2024, whether the order should be varied following postponement of the trial, and whether further security should be ordered.

1. Variation of payment date. The combined effect of the original order and the fixing of the trial date had initially fixed a payment date. However, the judge’s clear intention was that the tranche should be paid about six weeks before trial, reflecting the anticipated timing of trial preparation costs. The order was therefore varied so that the final £600,000 was payable six weeks before the date fixed for trial at the next CMC.
2. Additional security. The court could consider the defendant’s case that costs had materially increased, although the application had not expressed the point in precisely those terms. The evidence established a proper basis for inferring increased costs arising from numerous applications and the claimant’s inadequate disclosure. A detailed comparison between estimated and incurred costs would have assisted, but its absence did not deprive the court of an evidential basis for making the order.
3. The court nevertheless had serious reservations about the level of costs incurred, particularly the extensive costs of interim applications and disclosure. It declined simply to apply the original 74 per cent security percentage to the alleged costs gap. Taking a broad-brush approach, it ordered £300,000 for costs already incurred, rather than the £600,000 sought.
4. A further £125,000 was ordered for anticipated costs of a Re-Amended Defence and Counterclaim and a second CMC, producing total additional security of £425,000. Payment was to be made within 28 days, subject to further submissions. The defendant remained free to apply for further variation of the final tranche.