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Capped cost order refused: Thomas & Ors v PGI Group Ltd

In the case of Thomas & Ors v PGI Group Ltd [2021] EWHC 2776 (QB) (19 October 2021) the court was asked to make a Costs Capping Order (CCO) under CPR 3.19 limiting the claimants’ costs to £150,000 for the remainder of the proceedings, or alternatively set the costs budget for a figure in the same region.

The defendant did acknowledge that the future costs, should the matter proceed to trial, would be well in excess of this figure in the event that a costs capping order was made, and that the claimants in all likelihood would have to discontinue the proceedings. However, they argued that cost capping orders should apply as this case satisfied the necessary requirement that costs capping only applies to exceptional cases.

The claimants were 31 Malawian women who were employed by Lujeri Tea Estates Limited (the defendant was the parent company of Lujeri), to work in tea or macadamia nut plantations. Some of the claimants alleged that they were raped by male managers, overseers or colleagues, with some alleging that they had contracted HIV or given birth to children of their abusers.

It was common ground that the damages received by the claimants would be relatively modest, however these amounts would be life changing for the claimants. That said, these proceedings were not all about money, allegations were being made that there were systemic human rights abuses, which they say had been suffered by female plantation workers in Malawi, and that there was a chronic failure of companies to address these abuses. The hope was that it would lead to reforms to the ways in which plantations in Malawi operated and managed, and therefore bring the abuse to an end.

The judge considered the cost budgets that had been approved and also the offers made by the defendant in relation to the claimants’ costs budget, which were well in excess of this request for a costs capping order.

Legal costs were expected to be £6.5 million in total, the defendant submitted that it was not proportionate for the claimants to pursue litigation at this expense where damages were in the region of £150,000 to £300,000. The defendant claimed that issuing proceedings in this jurisdiction led to a huge cost and that they could obtain the same relief in Malawi at a small fraction of the cost. It was this that the defendant argued made this case exceptional for the purposes of a CCO.  The Judge did not agree and stated:

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 Judge commented that imposing a CCO would lead to a gross inequality of arms and neither did he think that the QOCS rules was a good reason to impose a costs capping order. Instead, he concluded that “costs budgeting was a more sophisticated and nuanced way of setting a costs figure than a CCO”. Consequently, the defendant’s request for a costs capping order was refused.

If you require any assistance with your legal costs requirements, please do get in touch with the team on 01733 350 880, or by email mail@aandmbacon.co.uk. For more information please do visit our website www.aandmbacon.co.uk.

Published 18 November 2021

Author – Sue Fox



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