The Republic of Mozambique v Credit Suisse International & Ors (Judgment No 14)

Costs arising from a third-party or Part 20 claim remain a matter for the court’s discretion under Senior Courts Act 1981, section 51(1). The usual starting point that a claimant discontinuing a claim bears third-party costs is not a rigid rule. The court must decide what is just in all the circumstances, including who chose to introduce and maintain the additional claim, the relationship between the parties, and the reasonableness of doing so from each relevant perspective. Where a claimant makes allegations but brings no claim against a person, a defendant who independently brings a Part 20 claim against that person may bear the resulting costs, even if the claim was reasonable as part of its defensive strategy.

The judgment concerned costs following the trial of complex multi-party proceedings brought by Mozambique. The Privinvest Companies had brought a CPR Part 20 claim against Ms Lucas, a former Director of Treasury of Mozambique, although Mozambique had made allegations against her but had brought no claim against her. After Mozambique confirmed that it would not pursue a case depending on a finding that Ms Lucas had been bribed, the Part 20 claim was struck out in Judgment 11. Ms Lucas sought her costs from the Privinvest Companies. The Privinvest Companies sought their own costs and an order requiring Mozambique to bear Ms Lucas’s costs. The central issue was which party should bear the costs of the additional claim.

1. Disposition. The Privinvest Companies were ordered to pay Ms Lucas’s costs of the additional claim, assessed on the standard basis, subject to a 50% reduction for the relevant period. They were also ordered to pay the costs of the strike-out application and of the costs hearing. No order was made against Mozambique in favour of the Privinvest Companies. A payment on account of £450,000 was ordered by the end of March 2025, with interest on costs from the dates Ms Lucas paid them.
2. The court’s discretion arose under Senior Courts Act 1981, section 51(1). The question was whether, in all the circumstances, it was just to make the order sought. The proposition that third-party costs will normally be borne by a claimant who discontinues, stated in Young v JR Smart (Builders) Ltd (Claim for Fees), was treated as a starting point rather than a principle determining every case.
3. [2005] EWCA Civ 358 recognised that a Part 20 claim may be a reasonable and proper course following entirely from a counterclaim, with a prima facie entitlement to consequential costs. That authority did not determine the result here because the present circumstances required consideration of more than those basic factual elements.
4. Mozambique had made allegations against Ms Lucas but had brought no claim against her. Ms Lucas’s participation beyond the involvement caused by Credit Suisse resulted from the Privinvest Companies’ decision to bring and maintain the additional claim. The Privinvest Companies’ decision might have been reasonable from the standpoint of their defence strategy, but it carried the risk that they would bear the costs whatever the outcome. It would be unjust to transfer those consequences to Mozambique.
5. The ordinary costs principles in CPR rules 44.2 and 38.6 did not produce a different result because Mozambique and Ms Lucas had not been claimants and defendants to a claim against each other. The Privinvest Companies’ own costs of resisting Mozambique’s allegations were dealt with separately.

First-instance costs decision following the trial judgment and consequential rulings in the same proceedings. The judgment refers to the strike-out decision as Judgment 11 and to the trial judgment as Judgment 12.