Successful Claimant Awarded Only 50% Of Costs Due To "Imprecise, Vague And Wide-Ranging Case"

ILLIQUIDX LIMITED V ALTANA WEALTH LIMITED & ORS [2025] EWHC 1566 (Ch)

In Illiquidx Limited v Altana Wealth Limited & Ors the court addressed multiple costs issues following a liability judgment where Illiquidx succeeded on breach of confidence and trade secret claims but failed on copyright infringement and joint liability allegations. The defendants sought to reserve costs pending quantum determination, arguing Illiquidx had exaggerated its £10m claim, but the court applied Langer v McKeown principles, holding costs should follow discrete issues immediately. Illiquidx conceded a 10% deduction for failed claims, while the defendants proposed 14.7% and a further 61.5% reduction for Litigation conduct, citing inflated disclosure costs (£1.1m for 13,526 documents, only 452 used at trial) and unclear pleadings. Mr Justice Rajah rejected reserving costs, noting defendants could have made a global Part 36 offer to test exaggeration but chose not to waive privilege on without prejudice offers. The court awarded Illiquidx 50% of its assessed costs (reflecting both failed claims and conduct criticisms), with interest at 2% above base rate and an interim payment of 25% of total costs, deducting £77k for outstanding defendants’ interim costs orders. The judgment emphasised CPR 44.2(2)(a)’s starting point for the overall winner but applied significant reductions due to Illiquidx’s “casting about to find a case” approach, particularly in disclosure. The court declined to leave excessive disclosure costs for detailed assessment, holding the 50% reduction adequately addressed proportionality concerns.

Quite apart from unnecessary costs, there is also a basic injustice in IX failing to identify its case and plead it with particularity and precision. Pleadings are there to mark the parameters of the case and inform the other side of the case they have to meet. Vague and expansive pleadings do not do that, particularly where, as here, the eventually successful case relies on a small subset of the facts alleged. The Defendants facing such vague and expansive pleadings are not being placed on an equal footing with the Claimant. The lack of clarity and precision as to IX’s case will, I am sure, have discouraged settlement.

Citations

Langer v McKeown [2021] EWCA Civ 1792; [2022] 1 WLR 1255 In multi-issue litigation, courts should generally determine costs after each discrete issue is resolved, even if the proceedings are ongoing, to support effective case management and timely cost resolution. CF Partners v Barclays Bank [2014] EWHC 3049 (Ch) When pleading misuse of confidential information, claimants must identify with particularity the “Big Idea” and its component details, ensuring clarity and coherence to fulfil the legal threshold for such claims.

Track allocation housing disrepair CPR 46.13 settlement sum costs restriction SCCO

MRO fee markup cap 25% detailed assessment personal injury Senior Courts Costs Office

Security for costs refused CPR 25.27 very high probability success excessive estimate King's Bench

IPEC scale costs transfer Patents Court PD 30 para 9.2 costs caps Court of Appeal

Costs budget variation CPR 3.15A promptness significant development unfair prejudice Chancery Division

Costs budgeting inter partes proportionality high hourly rates AI disclosure Patents Court CPR 3E

Beneficiary personal liability section 71(3) Solicitors Act 1974 indemnity costs VAT self-supply SCCO

Summary assessment indemnity costs unless order payment on account disclosure default Chancery Division

Provisional assessment set aside CPR 3.1(7) points of dispute filing duty PD 47 para 14.3 SCCO

Fixed recoverable costs police claims CPR 26.9(10)(e) intentional tort exemption

Key Points

Costs following a discrete issue such as liability should generally be determined at the conclusion of that issue and not reserved until the final resolution of the entire case, in the absence of compelling reasons to do otherwise. This approach promotes proportionality and procedural discipline. [8–10]
A party seeking to rely on a settlement offer to influence a costs order must ensure it is properly admissible; without prejudice save as to costs offers that are not placed before the court carry limited or no weight, particularly where there is no good reason for the offer not being made under CPR Part 36. [11–12]
The court may significantly reduce a successful party’s recoverable costs under CPR 44.2 where that party has conducted the case in a way that generated substantial unnecessary costs, especially due to prolix, imprecise or shifting pleadings. [22–24, 26]
Where a party succeeds only on partial aspects of its pleaded case and fails on others that were discrete and overreaching, an appropriate percentage deduction from its costs may be applied to reflect the cost of the unsuccessful claims. [4–5, 26]
Although costs orders usually favour the successful party, the court retains discretion to impose proportional reductions where the manner of conducting the litigation offends the overriding objective, increases costs unreasonably or impairs the opposing party’s ability to respond effectively. [3, 22–24, 26]

“have considered whether these circumstances are such that the general rule that the loser pays the winner’s costs is displaced. However, the following factors have dissuaded me. Firstly, IX has won on a case which was pleaded, however obscurely, and I do not think that the Defendants can be heard to say that they could not have anticipated a case which is available on the pleadings (and in fairness to Mr Moody-Stuart he did not say that). Secondly, the Defendants’ defence to the claim was unaffected, but unsuccessful. Thirdly, one element of that defence was a claim that the Defendants, or at least Mr Robinson, were well aware of most of the information they were given by IX and had already had the idea of setting up a fund – that was not true, it was a false case. In such circumstances it seems to me to be right that the Paying Parties should pay IX’s costs but subject to a substantial discount.”

Key Findings In The Case

The first and fourth defendants, Altana Wealth Limited and Brevent Advisory Limited, were found to have misused Illiquidx Limited’s confidential information and trade secrets in the establishment and operation of the Altana Credit Opportunities Fund, thereby breaching their non-disclosure agreement with the claimant [1].
The claimant’s case on copyright infringement and joint liability against the second and third defendants, Mr Robinson and Mr Kastner respectively, was rejected; these were held to be discrete and unsuccessful claims warranting a percentage deduction from the claimant’s recoverable costs [1, 4].
Illiquidx Limited was found to have significantly inflated the costs of the proceedings through its imprecise and voluminous pleadings, shifting case theories, and failures to clarify its case in a timely and coherent manner, causing unnecessary complexity and legal expenditure on both sides [14–24].
The court held that no admissible or effective settlement offer had been made by the defendants under CPR Part 36 or otherwise, capable of influencing the costs outcome; “without prejudice save as to costs” offers were not disclosed and therefore carried no weight in the court’s decision [12].
Despite being the successful party on the central issue of liability, Illiquidx Limited was ordered to recover only 50% of its assessed costs on the standard basis, reflecting the significant inefficiencies and inflated costs resulting from its conduct in the litigation [26].

“There will be a payment on account of 50% (of 50% of IX’s billed costs and pre-judgment interest). This figure errs on the side of caution, so that it does not exceed the amount that will ultimately be recovered after assessment. It takes into account the very large amounts which have been billed, the fact that most of the hourly rates appear to be considerably more than guideline rates, and the fact that the Defendants have interim costs orders in their favour in respect of which they have been seeking an interim payment of roughly £77,000.”

Background

The matter concerned an action brought by Illiquidx Limited against Altana Wealth Limited, Lee Robinson, Steffen Kastner and Brevent Advisory Limited for breach of confidence, infringement of trade secrets, breach of contract and copyright infringement. Following a liability trial, Mr Justice Rajah handed down judgment on 13 February 2025, finding that Altana and Brevent had breached a non-disclosure agreement and misused Illiquidx’s confidential information and trade secrets in establishing and operating the Altana Credit Opportunities Fund. The copyright infringement claim failed, as did the claim seeking to establish Mr Kastner’s liability for the acts of Altana or Brevent.

The procedural history revealed significant difficulties with Illiquidx’s pleadings throughout the litigation. In December 2020, Illiquidx attempted to reformulate its case on confidential information, seeking to adopt terminology from CF Partners v Barclays Bank by pleading a “Big Idea” with component elements called “the Detail”. Deputy Master McQuail rejected this formulation as incoherent and unintelligible, a decision upheld by Mr Justice Miles on appeal. Following further attempts at clarification in early 2022, Illiquidx reframed its confidential information as “the Business Opportunity” with component parts identified in writing as “the Detail”.

At the Pre-Trial Review, the court refused Illiquidx’s application to expand its case on confidential information from the written Detail to include oral conversations and narrative elsewhere in the pleading. Despite these rulings, Illiquidx’s trial skeleton continued an expansive approach, making extensive reference to matters both within and outside the Detail. During closing submissions, Illiquidx’s counsel substantially dropped reliance on the Detail and argued instead that the Business Opportunity was simply the high-level idea of a sanctions-compliant fund, evidenced by only a few documents in the Detail.

The costs hearing took place on 6 June 2025, with judgment reserved. Illiquidx’s costs were stated to be approximately £6.6 million, whilst the defendants’ costs totalled approximately £5.5 million. Mr Robinson had accepted liability for Altana’s liabilities pursuant to paragraph 128 of the liability judgment.

Costs Issues Before the Court

The court was required to determine several discrete costs issues arising from the liability judgment. First, whether costs should be reserved pending determination of quantum or dealt with immediately. The defendants argued that Illiquidx had greatly overstated the value of its claim at £10 million when the true value of damages would likely be £100,000 or less at any quantum trial, and that this potential exaggeration could only be properly assessed after quantum had been determined.

Second, the court needed to determine the appropriate percentage deduction from Illiquidx’s costs to reflect its failure on the copyright and joint liability claims. Illiquidx conceded that some deduction was appropriate, proposing 10%, whilst the defendants argued for 14.7% attributable to these failed claims.

Third, and most significantly, the court was asked to consider whether further deductions should be made to reflect Illiquidx’s conduct of the litigation, particularly its failure to plead its case with clarity and precision. The defendants sought a total deduction of 61.5% of Illiquidx’s assessed costs, incorporating both the failed claims and conduct issues.

Finally, the court needed to determine the appropriate rate of interest on costs (Illiquidx seeking 2% above base rate, the defendants proposing 1% above base rate) and the appropriate interim payment on account of costs, with Illiquidx seeking 60% of 90% of its costs and the defendants proposing 50% of any costs ordered, reduced to account for unpaid interim costs orders in their favour.

The Parties’ Positions

Illiquidx submitted that as the overall winner on liability, the starting point under CPR 44.2(2)(a) was that its costs should be paid by Altana and Brevent. It accepted that a 10% deduction was appropriate to reflect the failed copyright and joint liability claims, which it acknowledged were discrete claims for additional relief rather than alternative routes to the same outcome. Illiquidx argued that costs should be determined immediately rather than reserved, relying on the general principle established in Langer v McKeown that costs should follow the outcome of discrete issues to encourage professional conduct of litigation.

On the conduct issue, Illiquidx resisted any further deduction beyond the 10% for failed claims. Counsel argued that its case, whilst perhaps obscurely pleaded, had ultimately succeeded and was available on the pleadings. It submitted that matters of excessive disclosure costs should be left to detailed assessment rather than dealt with by way of percentage reduction at this stage.

The defendants’ primary position was that costs should be reserved pending the quantum trial, arguing that only then could the court properly assess whether Illiquidx had exaggerated its claim as permitted under CPR 44.2(4)(a) and 44.2(5)(c) and (d). They highlighted that no Part 36 offers had been made but indicated that “without prejudice save as to costs” offers existed which included quantum, though they were unwilling to waive privilege to put these before the court.

On the substantive costs issues, the defendants argued for a 14.7% deduction for the failed copyright and joint liability claims, based on Mr Seadon’s detailed analysis. More significantly, they sought a total deduction of 61.5% to reflect the unnecessary costs incurred due to Illiquidx’s conduct. Mr Seadon’s witness statement attempted to calculate the extent to which costs had been inflated by the “expansive, imprecise and vague” way the claim had been pleaded, including excessive disclosure costs of over £1.1 million resulting in 13,526 documents being disclosed, of which only 452 were referred to at trial.

The defendants emphasised the basic injustice of facing vague and expansive pleadings which failed to properly identify the case they had to meet, arguing this had discouraged settlement and placed them on an unequal footing. They submitted that the lack of clarity and precision justified a substantial departure from the general rule on costs.

The Court’s Decision

Mr Justice Rajah first addressed whether costs should be reserved, holding that they should be determined immediately. He applied the principles from Langer v McKeown, emphasising that requiring losing parties to pay costs as they lose encourages professional conduct of litigation and selectivity in points taken. The court noted that apart from policy considerations, it was desirable to deal with costs whilst the trial and judgment remained fresh in the judge’s mind.

On the reservation point, the court held that if the defendants wished exaggeration of the claim to be considered at the liability stage, they could have made a global Part 36 offer giving the claim its fair value, or some other costs-protective offer. The existence of “without prejudice save as to costs” correspondence was insufficient, particularly where the defendants were unwilling to waive privilege. The court applied the principle from Langer that parties cannot “have it both ways by withholding admission of the evidence of the offer but still asking the court to take account of it”.

Turning to the substantive costs determination, the court found that costs had been significantly increased by Illiquidx’s failure to identify its case clearly. The judgment detailed how costs had been increased “at every turn” – in pleadings, disclosure, evidence, trial preparation, cross-examination and inter-solicitor correspondence. The court particularly criticised the disclosure exercise, which resulted in millions of documents being harvested at a cost exceeding £1.1 million, describing Illiquidx’s approach as “casting about to find a case”.

However, the court declined to displace the general rule entirely. Three factors influenced this decision: first, Illiquidx had won on a case that was pleaded, however obscurely; second, the defendants’ defence remained unaffected but unsuccessful; and third, the defendants had advanced a false case that Mr Robinson was already aware of most of the information and had independently conceived the fund idea.

The court ordered the defendants to pay 50% of Illiquidx’s assessed costs on the standard basis, representing both a reduction for the failed claims and the court’s disapproval of how the claim had been prosecuted. Interest was awarded at 2% above base rate from the date of payment to Illiquidx’s solicitors until judgment. The interim payment was set at 50% of the reduced figure (i.e., 25% of total costs), taking a cautious approach given the high hourly rates exceeding guideline rates and outstanding interim costs orders of approximately £77,000 in the defendants’ favour.

The court expressly rejected the suggestion that excessive disclosure costs should be left to detailed assessment, holding that where disclosure had been ordered or agreed by reference to pleaded issues, the Costs Judge would not revisit whether a different disclosure exercise should have been undertaken. The 50% reduction therefore reflected both the court’s disapproval of Illiquidx’s conduct and the likely additional costs caused by that approach.

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