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Should the amending party automatically pay the costs of amendments to pleadings?

The usual rule is yes they should as per Taylor v Burton [2014] EWCA Civ 21. However, in the recent case of Various Claimants v MGN Ltd [2021] EWHC 771 (Ch) (30 March 2021), Mr Justice Mann ruled that if the amendments were effectively caused by the other side, then the normal rule should not be followed. That being said, even if this is the case, it does not automatically follow that the amending party should receive its costs either.

The case of Various Claimants v MGN concerns a phone hacking dispute involving 29 Claimants (including famous footballers such as Peter Crouch and Ryan Giggs). Several of the Claimants sought to amend their claims by adding names of associates they said were also hacked in a bid to discover further information. The Defendant did not object to any of the amendments but stated that the normal rule of costs should be followed (that the Defendant should have the costs of, and occasioned, by the amendments). In response the Claimants argued that costs should be awarded to the Claimants, on the basis that the amendments were caused by the Defendant giving inadequate, and late, disclosure which identified the new associates.

Mr Justice Mann determined that, in the first instance, it must be that in the normal case a party’s change of tack in the course of litigation is of that party’s own volition, and it is right that the other party should have the costs of that voluntary change, particularly where the amending party might have included the amendments in the initial pleading.” However, such a rule would “not necessarily apply if”, as was the case here, the reason the amending party sought to do so was because the new information was important and only came to light “as a result of disclosure by the amended against party and the amending party cannot be expected to have pleaded it at the outset, particularly where it is said that there has been a cover-up of the activity in question”.

So, whilst it was found that the amending party should not have to pay for the amendments to the pleadings, Mr Justice Mann concluded that it should not follow that the amending party should have their costs (at this stage at least). He commented that “I consider that the right order to make in relation to the costs of and occasioned by the amendment is that the costs should be costs reserved. That would enable a trial judge to make an appropriate order against the claimants should it turn out, for example, that in fact the new associate should have been pleaded from the outset…”.

Mr Justice Mann did acknowledge that the Claimants’ argument was entirely “understandable” but was not satisfied that the Order the Claimants were seeking was appropriate. Some may say that Mr Justice Mann’s determination reflects a ‘score draw’.

Amy Avory is a Costs Specialist at A&M Bacon. The team regularly encounter costs in respect of amendments and have a wealth of experience in dealing with all legal costs issues. You can contact Amy or the team on 01733 350 880 or visit our website www.aandmbacon.co.uk for more information.

Published 10 May 2021

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