Alta Trading UK Limited & Ors v Peter Miles Bosworth & Ors

Further fortification of a cross-undertaking in damages should not be ordered after the relevant injunction has been discharged. Such an order would retrospectively impose an undertaking which the claimant had not given and would undermine the claimant’s choice whether to accept the injunction on fortified terms. CPR 3.1(5) cannot ordinarily be used to circumvent that principle as a sanction for past procedural misconduct. By contrast, further security for costs may be ordered where there has been a material change of circumstances. The court may reassess the totality of the relevant costs, including costs of a damages inquiry and detailed assessment, and may order security by reference to a proportion of estimated costs.

The claimants’ claims were dismissed after a nine-week trial, while counterclaims by the first and second defendants succeeded in substantial sums. The court discharged a worldwide freezing injunction granted in 2015, enforced the claimants’ cross-undertakings in damages, ordered an inquiry into damages, and awarded costs on the indemnity basis.

The fifth and ninth defendants sought further fortification of the undertakings and additional security for the costs of the inquiry and detailed assessment. The first and second defendants sought additional security for those further stages. The issues were whether post-discharge fortification could be ordered, including under CPR 3.1(5), and whether material changes justified further security for costs.

1. Further fortification. The applications for additional fortification were dismissed. A cross-undertaking in damages is given to the court and is the price of obtaining an injunction. Fortification is an adjunct to that undertaking. Once the injunction has been discharged, requiring increased fortification would in substance impose an undertaking which the claimants had not given and remove the choice whether to continue with the injunction on fortified terms. That principle applied even though the court assumed that it technically had jurisdiction to make the order.
2. CPR 3.1(5). The power to order payment into court is principally directed to discouraging non-compliance with procedural rules, practice directions and the overriding objective, and to securing the future conduct and efficient progress of litigation. It was not an appropriate means of imposing a large substantive security or additional fortification retrospectively. The alleged failures concerning disclosure, document preservation and presentation of the injunction were more naturally addressed through their established sanctions and remedies, including the indemnity costs order and liability under the undertaking.
3. Security for costs. Further security was justified under CPR 25.12 and CPR 25.13. The claimants’ depletion of assets, the substantially increased costs, the indemnity costs order, the success of the defendants and the forthcoming inquiry and detailed assessment constituted material changes of circumstance. Once such a change is shown, the court may reassess the totality of the costs rather than requiring a direct link between each change and each additional item of costs.
4. The court ordered additional security of £3,736,451 for the first and second defendants and £2,798,000 for the fifth and ninth defendants, representing 85 per cent of estimated costs of the detailed assessment and inquiry. The orders were not made in unless form; liberty to apply was granted.

First-instance decision. The judgment records earlier interlocutory orders and the substantive trial judgment, but no appellate decision.