Dispute Resolution analysis: The Managing Judges of the large GLO NOx emissions litigation have dismissed applications seeking the protection of documents used in open Court from use for collateral purposes and for information about the funding arrangements which the Claimants have in place in contemplation of a security for costs application.

Various Claimants v Mercedes-Benz Group AG and others [2024] EWHC 695 (KB)

What are the practical implications of this case?

This judgment offers guidance on two relatively unusual applications made in the course of a large group litigation involving claims into the emissions of vehicles brought against the manufacturers of those vehicles. It notes that when considering applications under CPR r.31.22, prohibiting the collateral use of documents disclosed and used in hearings in open court, the principles of open justice predominate and the Court will look for clear evidence justifying the making of such a restriction and even then will expect the application to be targeted at only those documents in respect of which restrictions are truly justified. In relation to applications under CPR r.25.14 for documentation relevant to a potential application against a non-party for security for costs, the Court rejected the contention that the power was confined to those in a direct contractual relationship with the parties to the litigation. It would be unjust to permit the power to be circumvented merely by the insertion of parties or contractual structures between the funder and the parties. However, the Court will be slow to exercise the power to order disclosure, particularly in circumstances where the progress of the litigation may render the need to seek security for costs redundant.

What was the background?

The judgment deals with issues arising in the ongoing NOx Emissions Group Litigation. This is group litigation brought by multiple claimants against various vehicle manufacturers concerning the emissions of the vehicles. It is a judgment by the two Managing Judges appointed by the President of the King's Bench Division and followed a five day CMC hearing involving a considerable number of legal representatives. Owing to the significant and noted cooperation between the parties, there were only two applications which involved propositions of law which required a reserved judgment. The first was an application brought by the Mercedes-Benz group of Defendants under CPR r.31.22 for an order prohibiting the collateral use of certain documents that have been disclosed by them even where those documents are or have been read to or by the court, or referred to, at a hearing which has been held in public. The application concerned four categories of document: (1) Recall Decisions, (2) KBA Appeal Decisions, (3) AES/BES Documents and (4) Annexes and Enclosures to Type Approval Decisions. The second was an application by various Defendants for information concerning the funding arrangements put in place by Pogust Goodhead, the solicitor acting for the majority of the Claimants in the litigation, in contemplation of a potential application for security for costs against the Claimants.

What did the court decide?

The application under CPR r.31.22 was dismissed. The applicable test was to be found in the judgment of the Court of Appeal in Lilly Icos Ltd v Pfizer Ltd (No.2) [2002] W.L.R. 2253. The Court accepted the submission that many of these documents were likely to be of only limited probative value at trial. However, much of the contents of those documents was anodyne and/or already in the public domain. The Court noted the broad scope of the application and that the granting of such an application would cut across the open justice principle upon which the litigation was to be conducted. The Mercedes Defendants had displayed a very acute sense of commercial sensitivity but could not persuade the Court as to the need for such protections to be put in place. The Court noted the heightened approach to confidentiality in Germany, however, was not prepared to water down its own principles of open justice to conform with the stance in Germany. In relation to the application directed against Pogust Goodhead, the evidence from the firm was that it was acting on a CFA within the meaning of section 58 of the Courts and Legal Services Act 1990 and no agreements existed between its clients and any third parties by which any funder had contributed or agreed to contribute towards the client's costs in return for a share of any money or property they may recover in the litigation. The firm had arranged funding whereby it could draw down on a facility to fund the operating expenditure of the firm. The Defendants argued that there was a dispute as to whether the funders identified fell within the scope of CPR r.25.14(2)(b) and so was entitled to have sight of the funding agreements in order to determine that question. The Court declined to order disclosure of those agreements, however, proposed that the issue be revisited (if still pursued by the Defendants) after the budgets through to 2025 have been fixed and by which time it will be apparent whether the Claimants have obtained ATE insurance to the extent that the application for security for costs would become redundant.

Case details

  • Court: High Court of Justice, King's Bench Division
  • Judges: Mrs Justice Cockerill DBE and Mr Justice Constable
  • Date of judgment: 25 March 2024

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