Contis Group Limited & Anor v Swipewallet Holdings Limited & Ors

The court’s case-management discretion permits bifurcation where the likely saving in cost and procedural efficiency outweighs overlap, delay, appellate and prejudice risks. The assessment is fact-sensitive and must consider the whole dispute, including whether a clean split is possible and whether separate trials may cause duplication or unfairness.

For security for costs, an appropriately drafted after-the-event policy may provide adequate security. The question is whether there is a real or realistic, rather than fanciful, risk that it will not respond. Security may be limited to costs arising from issues unique to the claim where claim and counterclaim substantially overlap, but there is no rule of thumb: the court must assess the particular circumstances.

The claimants provided payment-card services under related agreements with the defendants. Following regulatory, card-scheme and know-your-customer difficulties, the defendants terminated the agreements. The claimants alleged that the termination was wrongful and claimed contractual fees and damages. The defendants advanced a counterclaim.

The court determined two interlocutory applications. The claimants sought a bifurcated trial separating liability from quantum. The defendants sought security for costs, relying on the claimants’ financial position and the alleged limitations in their ATE policy. The central questions were whether bifurcation served the overriding objective and what protection, if any, should be ordered.

1. Bifurcation. The power to order a split trial formed part of the court’s general case-management powers under Civil Procedure Rules 1998, r 3.1, exercised in accordance with the overriding objective. The court considered the prospective saving in costs, trial preparation, duplication, witness inconvenience, complexity, prejudice, delay, appellate consequences, settlement and the possibility of a clean split.
2. The overlap between liability and quantum was real but overstated. The penalty issue could be addressed by reference to contractual projections, and the inquiries concerning the effect of alleged breaches and quantum were not identical. The alleged prejudice from delaying the counterclaim was speculative. Bifurcation was therefore ordered.
3. ATE security. An ATE policy could provide security. The relevant test was whether there was a real or realistic, rather than fanciful, prospect that the policy would not respond. The court distinguished between avoidance or rescission ab initio, non-cover for individual applications, and prospective termination.
4. There was a real risk that the policy might be terminated prospectively if the prospects of success fell below the contractual threshold. The policy nevertheless provided security for costs incurred up to July 2025. The claimants were required to notify the defendants of termination, provide evidence of insurers’ consent to interim applications and settlements, and provide £300,000 as security to support any further application for alternative security.
5. Claim and counterclaim. The principle in BJ Crabtree (Insulation) Ltd v GPT Communication Systems Ltd had limited application. There was substantial, but incomplete, overlap between the claim and counterclaim, and some issues related only to the claim. The defendants’ undertaking not to pursue the counterclaim if the claim were stayed for failure to provide security was ordered.
6. The contention that security would stifle the claim or that the defendants had caused the claimants’ lack of means was rejected. The claim was genuine, but the evidence did not establish that security would prevent its pursuit or that the defendants’ conduct had caused the lack of means.