INDEMNITY COSTS AGAINST CLAIMANTS IN GROUP LITIGATION ORDER: INDEMNITY COSTS APPROPRIATE: AN EXHAUSTING READ
The judgment of Master Fontaine in The VW NOx Emissions Group Litigation  EWHC 2308 (QB) is a warning to any litigator thinking of applying for a Group Litigation Order (“GLO”). The rule is clear basically – get your case in order before applying for a GLO. The failure to do so in this case led to indemnity costs being awarded against the claimants. The costs involved are said to be in the region of £450,000.
“I have already indicated that the most likely explanation for the manner in which solicitors for the Relevant Claimants, HS, both issued and pursued the application, was because of their desire to obtain a commercial advantage in the litigation. The motivation need not concern the court, only the conduct which resulted in unnecessary costs and use of court resources. The fact that the conduct was that of the Relevant Claimants’ solicitors does not prevent an indemnity costs order being made”
The claimants were a group who allegedly suffered loss as a result of Volkswagen emissions being incorrectly altered. A number of claimants had issued an application for a GLO in 2016. A GLO was made in made in 2018.
THE DEFENDANTS’ APPLICATION
The defendants’ application was very finely tuned. They sought the costs arising from the premature issue of the GLO and the fact that it was pursued when it was obvious that it should have been “put on hold” until it was ready to proceed.
- The claimants failed to consider the impact of a dispute where it was alleged that one of the solicitors acting for the claimants was in breach of a non-disclosure agreement. This issue was determined by a judgment in 2017. It was clear that the GLO could not proceed until that dispute was resolved.
- The defendants alleged that there was inadequate coordination by the firms representing the claimants.
- The GLO was said to be issued prematurely and pursued unreasonably.
THE MASTER’S FINDINGS
In a detailed judgment the Master found the defendants’ application to be largely well-founded.
THE MASTER’S DECISION TO AWARD INDEMNITY COSTS
The Master accepted the defendants’ submission that indemnity costs should be awarded.