Court Determines Costs Allocation in Allianz Global Investors v G4S PLC Strike-Out Application

Citation: [2022] EWHC 1719 (Ch)
Judgment on

Introduction

The High Court of Justice case of Allianz Global Investors GmbH & Others v G4S PLC [2022] EWHC 1719 (Ch) provides an insightful examination of costs following an unsuccessful strike-out/summary judgment application. Here, the Court must determine which party, if any, is entitled to costs, and what proportion of those costs should be attributed to each party.

Key Facts

Allianz Global Investors and other claimants took legal action against G4S PLC, involving an application by the defendant for the case to be struck out or summarily dismissed, focusing essentially on what constituted a “Person Discharging Managerial Responsibilities” (PDMR) under the Financial Services and Markets Act (FSMA). The court delivered judgment on this application, deciding on the construction of PDMR (Issue 1), whether certain persons were PDMRs (Issue 2), and other good reasons to proceed to trial despite the determinations in Issues 1 and 2 (Issue 3). Subsequently, the parties submitted written submissions concerning the costs of the application.

The legal principles applied in this case are grounded in the Civil Procedure Rules (CPR), particularly CPR 44.2 which gives the court broad discretion in costs matters. Here are the principles in the context of the case:

i) Discretion of Court under CPR 44.2: The Court’s discretion encompasses not only whether to make a costs order but also what order for costs should be made.

ii) General Rule - Costs follow the Event: According to CPR 44.2(2)(a), the unsuccessful party typically bears the costs of the successful party. However, the rule can be departed from under CPR 44.2(b).

iii) Circumstances in Costs Decision (CPR 44.2(4,5)): The Court takes into account the circumstances of the case, including the success of parties on parts of the case and conduct during litigation.

iv) Definition of ‘Successful Party’: The measure of success is who has won “as a matter of substance and reality”, not just on specific issues.

v) Departure from General Rule (CPR 44.2(4)(a)): The Court may stray from the principle that costs follow the event where it’s warranted; for instance, when a party wins on some issues.

vi) Proportionality: The Court may order a party to pay a proportion of costs in line with CPR 44.2(6).

The Court, applying these principles, looked at who the successful party was in substance, the significance of the partial success achieved by the defendant on Issue 1, and the condition of the claimants’ pleadings, which led to a revision post-judgment.

Outcomes

Mr Justice Miles delineated that, while the claimants did not succeed on Issue 1, they were ultimately successful in defeating the strike-out/summary judgment application. Nonetheless, he acknowledged the defendant’s success on Issue 1 as substantive, warranting a departure from the general rule on costs. Consequently, the judge ordered the defendant to pay 50% of the claimants’ costs, citing the impact of the decision on Issue 1 for the future conduct of the case. Furthermore, critical comments on the claimants’ pleadings contributed to the decision, as the judge regarded them as insufficiently clear, and it prompted the claimants to provide further clarification.

The Court also deemed it suitable for an interim payment on account of costs favoring the claimants, setting the amount based on the principle of proportionality in relation to the costs claimed and likely recoverability on detailed assessment.

Conclusion

In Allianz Global Investors GmbH & Others v G4S PLC, the Court’s decision centers around the application of CPR 44.2, where it exercises discretion in awarding costs. While the claimants were deemed the successful party in defeating the strike-out application, the defendant achieved success on an important issue, affecting the overall costs outcome. The Court balanced the partial success of the defendant against the overall success of the claimants, which is in line with the principle that costs should be fair and proportionate to the circumstances of the case.