In Walter Hugh Merricks CBE v Mastercard Incorporated and Others [2022] CAT 52 the Competition Appeal Tribunal considered the principles relating to the costs of amendments to statements of case after a contested hearing. On the facts of this case there was no clear winner and the appropriate order was for no order for costs. There is also an interesting discussion about the factors involved in making an “issue based” costs order.
“Contrary to the submission advanced in Mr Merricks’ application, success is not measured by counting up the various arguments which the lawyers for each side had put forward and seeing who was successful on each. Where the Tribunal makes an issues-based order, the question is who has been successful on each issue, not on each of the various arguments advanced in support of every issue”
THE CASE
The claimant had applied for and obtained permission to amend its claim. The order made, after an extended hearing, was more limited than the claimant’s application, allowing an expansion of the scope of the claims by one year and two years rather than the eight years sought by the claimant. The application was resisted by the defendant. The application took place as part of a CMC which lasted for less than one day.
THE TRIBUNAL’S ORDER ON COSTS
3. Each application was accompanied by a schedule of costs. These showed estimated costs of a little over £65,000 for Mastercard and, remarkably, almost
£136,000 (which included the costs of the application for costs) for Mr Merricks.
4. Both Mastercard and Mr Merricks have filed submissions in reply to the other’s application.
5. We do not accept that Mastercard should recover its costs of opposing the amendment. The standard order that an amending party should pay the costs
occasioned by an amendment applies where an amendment is not resisted. By contrast, in the present case, this amendment was opposed, resulting in a fully
argued, contested hearing. In those circumstances, costs would normally be awarded to the party that was the “winner”. Although Mastercard was
successful to the extent of substantially limiting the scope of the run-off period, it had strongly opposed, on various grounds, the amendment to allow any runoff period and we do not think it can be described as being overall successful.
6. At the same time, even if we were to accept Mr Merricks’ late costs application, we do not consider that he can be described, on any common sense view, as the
overall winner. Although he obtained some run-off period, this was substantially less than the eight years sought. In practical terms, this makes a
massive difference in the potential amount of the claims. Contrary to the submission advanced in Mr Merricks’application, success is not measured by
counting up the various arguments which the lawyers for each side had put forward and seeing who was successful on each. Where the Tribunal makes an
issues-based order, the question is who has been successful on each issue, not on each of the various arguments advanced in support of every issue. On the
present application, there was only one issue: whether or not to allow the introduction of the claimed run-off periods. As to that, as stated above,
Mastercard achieved a significant degree of success in resisting the scope of the amendment, and therefore significantly denied Mr Merricks the prize which he
was seeking to achieve: cp Roache v News Group Newspapers Ltd [1998] EMLR 161 per Lord Bingham MR at 168. In the light of that, we regard as
wholly unrealistic the suggestion in the application for Mr Merricks that if Mastercard had offered to consent to the much shorter run-off periods we
allowed, there would have been no need for a contested hearing of the application.
7. Accordingly, we consider that the proper order is that neither party should recover its costs of the application. We do not think it appropriate here to make
any separate order as regards the costs of the amendment itself. The substantive proceedings are at a very early stage and there is argument regarding the extent to which the amendment arose out of matters raised in Mastercard’s pleaded defence. In those circumstances, we think the costs of pleading, both as regards the amendment to the claim form and any consequential amendment to the defence, should stand or fall with the other pleading costs and therefore be costs in the case.
8. This means that it is unnecessary to consider the details of the respective costs schedules. We would only add that we regard the figure of £65,000 in
Mastercard’s schedule as unreasonably high, but that appears to be a reflection of the hourly rates charged, on which we commented in our previous costs ruling
in this case: [2022] CAT 27 at [19]. Moreover, we regard the figure of close to £136,000 in the costs schedule for Mr Merricks as manifestly disproportionate
and unreasonable.
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