A fascinating costs decision has just been released (please bear with me) in Thomas & Ors v PGI Group Ltd [2021] EWHC 2776 (QB). Kate Boakes is one of the counsel team representing the Claimants.
31 women employed at tea and macadamia nut plantations in Malawi allege sexual assault, harassment, and other types of sexual discrimination at the hands of male colleagues.
They bring claims in England against their employer’s parent company, which they say owed them a duty of care on the basis that it promulgated standards and exercised control over the employer. The parent company denies liability.
If the claims were successful, they would only entitle the Claimants to fairly modest damages. The Defendant said they would amount to around £10,000 each and £310,000 altogether (although the Claimants disagreed with those figures).
The parties filed costs budgets. The Claimants estimated their total costs of the proceedings at £3,177,806.76.
The Defendant asked the court to make a costs capping order limiting the future costs of the Claimants to £150,000.
It argued that incurring over £3 million in costs in order to recover only £310,000 in damages was disproportionate. It was also unfair, since the Defendant was unlikely to recover any costs at all even if they won owing to the effect of QOCS.
The Claimants’ response was striking: if the costs capping order were made, then they would in practice have to abandon their claims.
Cavanagh J rejected the Defendant’s request:
For the reasons set out below, in my judgment, the Claimants are right that it would not be appropriate, having regard to the principle of proportionality, to cap the costs at a figure that is less than the minimum costs that are required for them to litigate their claims effectively in the High Court.
The starting point was that the Claimants had an unchallenged right to bring their claims in the courts of England:
The starting point is that the Claimants are entitled to bring these proceedings against the Defendant in this jurisdiction. The Defendant has never suggested otherwise and it is clear, pursuant to Article 4 of the Recast Brussels Regulation, that the Claimants are so entitled. Furthermore, the Defendant accepts that the Claimants’ claims are arguable.
Although the sums claimed were modest, they might be life-changing for the workers:
The sums that are likely to be recoverable, though small by English standards, are very significant for poor Malawian plantation workers, and they may indeed be life-changing.
But it was not all about the money anyway:
I accept the Claimants’ submission that in any event, the Claimants’ objectives in bringing these proceedings are not entirely, or even principally, about money. They claim to have been abused sexually, including, in many cases, by rape. They say that this was a chronic problem in the plantations run by Lujeri. They say that this was the result of a systematic failure by the Defendant to use its powers and influence to control the behaviour of male managers and overseers and to ensure that these abuses did not take place on the plantations.
And factors like the desire for “vindication” were actually relevant to the assessment of proportionality under the CPR:
I am satisfied that the Claimants’ legitimate desire for personal vindication, and for the acceptance by the Court that they were abused in the way that they allege and that the Defendant is liable for this treatment, coupled with a legitimate desire to use the court proceedings as a way of shining a light on these practices and promoting reforms in the future, mean that future costs that are substantially in excess of the damages at issue will not be disproportionately incurred. The importance of the matter to the parties is a relevant consideration, in relation to proportionality (see CPR 44.4(3)(c)).
It did not matter that it might have been possible for the Claimants to sue their employer in Malawi:
The fact remains that they are entitled to choose to sue Lujeri’s ultimate parent company in England. The Defendant accepts that the Claimants’ claim in England is arguable, and that it is not liable to strike-out as being an abuse of process or to being stayed on the basis of forum non conveniens. The Claimants are entitled to take the view that they prefer to bring their proceedings in England. Whether or not their concerns about bringing legal process in Malawi are justified or not, they are entitled to bring these proceedings in England.
Nor did the “overseas element” of the case mean that it lacked public importance in England (another factor relevant to proportionality):
A matter can be of public importance even if the events with which it is concerned took place in a different country. In any event, in the present case, one of the parties, the Defendant, is domiciled in England. It is a matter of public importance in this country whether a company that is domiciled here is in breach of a duty of care to workers on plantations in Malawi, owned by a subsidiary company.
The Defendant had already conceded that the claims could not be struck out as an abuse of process. They could not use the costs capping order regime to make an abuse argument by the back door:
In my judgment, the Claimants are right that it is wrong in principle for a party to use the CCO regime, in effect, as a proxy for the abuse of process jurisdiction.
It would simply not be in the interests of justice to force the Claimants to abandon their claims:
However, given that the Defendant has abandoned the strike out, has accepted explicitly that the proceedings are not an abuse of process, and has never challenged the proceedings on a forum non conveniens basis, I do not think that it would be right to impose a CCO which would have exactly the same consequences for the Claimants as a strike out or a stay of proceedings.
And even if the Claimants could struggle on regardless of a costs capping order, there would be a massive inequality of arms:
In addition, so far as the interests of justice are concerned, it is also relevant, in my view, that a CCO would lead to a gross inequality of arms. Even if the Claimants were able to struggle on with a CCO of £150,000, it is clear that the Defendant’s resources are far greater. They have proposed a budget that would involve them spending more than ten times as much.
Lastly, the effect of the QOCS rules was not a good reason for imposing a costs capping order. It was just how the rules worked:
I can understand that the Defendant is unhappy that it will have to pay the Claimants’ costs if the Claimants succeed, but the Claimants will not have to pay the Defendant’s costs if the Claimants’ claims fail. However, this is a function of the QOCS rules, and it is not a reason to impose a CCO on the Claimants.
The better way of controlling costs was therefore via the costs budgeting regime:
costs budgeting is a more sophisticated and nuanced way of setting a costs figure than a CCO.
The Defendant’s request for a costs capping order was refused. The case will now proceed to be budgeted.
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