Case No: CL-2015-000305
Neutral Citation Number: [2017] EWHC 1033 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice, Rolls Building
Fetter Lane, London EC4A 1NL

Date:  5  May 2017 

Before :

Mr Robin Dicker QC (sitting as a Deputy High Court Judge)

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Between :

	(1) VALD. NIELSEN HOLDING A/S
(2) NEWWATCH LIMITED	Claimants	
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	(1) MR VICTOR BALDORINO
(2) MR RICHARD BENNETT
(3) MR JULIAN MANTELL	Defendants	

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Michael Booth QC and Christopher Lloyd (instructed by Keystone Law) for the Claimants
Alain Choo Choy QC and Nicholas Sloboda (instructed by Cooke, Young & Keidan LLP) for the Defendants

Hearing date: 28 April 2017

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Judgment
Mr Robin Dicker QC: 
Introduction
1.	On the hearing of the second CMC in this matter on 28 April 2017, I gave certain further directions for the trial of the claim, including a direction that the trial be listed to start not before 1 March 2018 with an estimate of 20-24 days.  This judgment deals with two further matters which arose for determination on that hearing.
2.	The first matter concerns an application by the Defendants dated 20 April 2017 for an order that the Claimants do provide additional security for costs.  
3.	It follows an earlier application by the Defendants for security for costs which was issued on 12 October 2016 and heard by Carr J on 20 December 2016.  At that stage, the Defendants estimated their costs at some £4 million and sought security in the sum of £3 million. On 21 December 2016 the Judge ordered the Claimants to provide security in the sum of £1.2 million. In doing so, she took account of £1.8 million potentially available under ATE policies which had been obtained by the Claimants, which, together with the £1.2 million security ordered, was 75% of the Defendants’ estimated costs figure and the sum sought on the application.  Carr J explained, however, that this was not the basis of her ruling. Rather, she said, her decision was based on “all the circumstances, including the nature and size of the claims, the defence estimate of costs and the Claimants’ criticisms of those figures, the existence of the ATE policies, the timing of this application and the likely future progress of the litigation”.
4.	At the time of the hearing before Carr J, the trial was listed for trial commencing on 6 March 2017 with an estimate of 18-20 days although, as will become apparent, that date was already in jeopardy.  On 12 January 2017 the Judge ordered by consent that the Claimants do have permission to file and serve Re-Amended Particulars of Claim and at the same time adjourned the trial and ordered that the existing trial listing be vacated.
5.	The Defendants contend that, in the circumstances, there has been a material change of circumstances which justifies an order for additional security.  They estimate that the increase in their costs as a result of the re-amendments and the adjournment of the trial to be approximately £1.18 million. They seek additional security of £885,000, being 75% of such total additional costs.
6.	The Claimants oppose the application.  They contend that there has been no material change in circumstances, as both the re-amendments to the pleadings and the adjournment of the trial were matters which were envisaged when the matter was before Carr J on the earlier application, and furthermore were taken into account by her as likely to happen when determining the amount of security for costs to be provided.  They also contend that the Defendants’ evidence in support of the application for further security is inadequate and unsatisfactory, and that the estimate of additional costs is excessive.
7.	The second matter concerns certain costs, that were reserved to this hearing by Carr J in her subsequent order of 12 January 2017, relating to the costs of the application to re-amend the Particulars of Claim and to adjourn the trial.
Summary of the claim
8.	The background to the litigation is summarised in the judgment of Carr J and it is not necessary to set it out in detail here.
9.	The claim concerns the sale of a company called Updata Infrastructure (UK) Limited (“Updata UK”).  The company was sold as part of a management buy-out on 11 July 2009.  The Defendants were three members of the former management of Updata UK who participated in the management buy-out.  The predecessor in title for the First Claimant (“Updata Europe”) owned 60% of the shares of Updata UK and the Second Claimant owned 12.4%.  
10.	The Claimants claim, amongst other things, that, as a result of fraudulent misrepresentations by the Defendants, the Claimants sold their shares in Updata UK at a substantial undervalue.  The claims are denied by the Defendants.
11.	The Claimants claim that, if they had known the truth about Updata UK’s financial position, they would not have sold their shares.  The loss suffered by Updata Europe as a result of the undervalue is said to have been approximately £17.6 million; alternatively, if Updata Europe had retained its shares and sold them in March 2014, its loss is said to have been between £34.67 million and £38.52 million.
12.	The First Claimant’s claim, as originally pleaded, was as assignee of Updata Europe’s rights under an assignment dated 19 November 2010. 
The principles
13.	Under CPR 25.13(1)(a) the court has a discretion to award security in an amount which it considers just having regard to all the circumstances of the case.  The appropriate amount will generally be the sum which the court considers that the applicant would be likely to recover in a detailed assessment if awarded costs on a standard basis following the trial, having regard to the factors set out in CPR 44.5(3).
14.	There is no dispute between the parties about the principles that are applicable to an application for additional security for costs. 
15.	In Republic of Kazahstan v Istil Group [2005] EWCA Civ 1468 Sir Antony Clarke MR said at [32] that:
“… where the court has awarded security in respect of, say, the whole of an action or application, it will not make a further order in the absence of a material change of circumstances.  However, it will or may do so if there has been a material change of circumstances, depending, of course, upon the circumstances of the particular case … That principle applies where a court makes an order for security for costs and is asked to make a further order.”
16.	In Stokors SA v IG Markets Limited [2012] EWHC 1684 (Comm) Popplewell J said at [13]:
“The next matter of principle which is important is that where a security for costs up to a particular stage of proceedings has already been provided, a defendant who applies to increase the amount of security for the costs of that same stage in proceedings will generally have to justify a further order by reference to circumstances which did not exist or were not apparent at the time the order was made.  For it to be just to order further security, a defendant will generally have to show a material change of circumstances from those which pertained or were envisaged when the matter was before the court making the order.  Otherwise the court is simply being asked to reconsider a decision made on the basis of arguments which were made or could have been made at the time”.
The initial application for security 
17.	At the time of the hearing of the application for security on 20 December 2016, the trial was fixed to be heard starting on 6 March 2017 with an estimated length of 18-20 days.  As Carr J said in her judgment, by that stage there were, however, other applications in the pipeline, including the Claimants’ application for permission to re-amend their Particulars of Claim which would need to be determined at a later date, and it was clear that the trial date of March 2017 was in jeopardy. For reasons that will become apparent, it is necessary to consider such developments and the approach to them in the evidence and at the hearing of the application in a little detail.
18.	By the time of the hearing, the Defendants’ application for security was supported by three witness statements by Philip John Young (“Mr Young”) of Cooke, Young & Keidan, namely his third, fourth and fifth statements dated 2 October 2017, 1 December 2017 and 14 December 2017 respectively. 
19.	Mr Young’s third statement started by saying that the application was made without prejudice to the Defendant’s right to make a further application for security in the event that the case materially changed.  In addition:
(1)	Having set out the background and having dealt with the Claimants’ financial position, he then set out, at some length, the developments which had occurred in relation to the assignment to the First Claimant.  During the course of disclosure, the Claimants had disclosed three materially different deeds of assignment signed in late December 2010 or January 2011 but backdated to 19 November 2010.  Mr Young said that that the assignment and the circumstances in which it was entered into were murky and suspicious and that the explanations offered to date were unconvincing.  He added that these were serious matters as, if the assignment was not enforceable, then the First Claimant’s claim would fail, which would dispense with the majority of the litigation as the assignor’s claim was now time barred. 
(2)	Mr Young also set out the basis for the application for security. He identified a number of factors, on the basis of the existing directions, that were relevant, referring to the fact that the matter had been listed for a five week trial commencing on 6 March 2017, commenting that “the procedural timetable is compressed and this means that several workstreams must be worked on simultaneously and urgently which necessitates the use of a larger team of lawyers”.  He said that the Defendants’ actual incurred legal costs and estimated future legal costs were approximately £4 million, which included a forecast from 1 October 2016 to the end of the trial of approximately £3 million.  In the context of the existing work to date, he also referred to what he described as “serious deficiencies in the Claimants’ disclosure in respect of the assignment” which, he said, were likely to result in additional costs that were not presently accounted for.
20.	On 8 November 2016 the Claimants provided the Defendants with draft Re-Amended Particulars of Claim. The draft included additional allegations of fraudulent misrepresentation as well as proposed amendments dealing with the circumstances in which the claim was assigned to the First Claimant.
21.	Mr Young’s fourth statement was dated 1 December 2016.  He referred, again, at some length, to the position in relation to the assignment and provided an update.  He said that the inadequacy of the Claimants’ disclosure and the present position in relation to the assignment was “ … causing the Defendants to incur substantial additional costs which the Defendants respectfully ask also be secured and have created uncertainty about the trial date”.  He set out recent developments in relation to the assignment, saying that the Defendants had “made it clear to the Claimants that it will not be possible to prepare the case for trial in the current trial listing (from 6 March 2017) on the expanded and different basis that the Claimants now propose” and said that the Claimants had been asked to elect between abandoning the allegations, requesting an adjournment of the trial or, if they were not prepared for it to be adjourned, to apply for permission to amend which would be resisted.  Mr Young explained that “These matters are relevant to the Application because: (a) all of these issues are necessarily causing very significant additional work to be done and hence costs to be incurred, for which the Defendants seek security …”.   He referred to the fact that amendments to the pleadings would have the inevitable consequence of requiring further pleadings, further disclosure, a wider scope of witness statements and new areas of expert evidence, all barely three months before trial, which was “unsatisfactory, to say the least, and has a dramatic impact on the Defendants’ costs of conducting this litigation”.  Mr Young said that, as the Claimants had indicated that they would only indicate their position on 1 December 2016, the same day as his witness statement was due to be served, he was “not presently able to provide any meaningful update in respect of the Defendants’ estimated future legal costs” although adding that “If the Claimants’ amendments are permitted and/or if the trial is adjourned … the future costs of the case are likely to increase” and reserved the right to serve further evidence providing updated estimates of future costs once the Claimants had confirmed their position in correspondence.
22.	Mr Young’s fifth statement was dated 14 December 2016. He dealt with the current state of the case and the likely impact of the proposed amendments.  He said that the Defendants had sought further information in relation to the proposed amendments. He said that it was unclear what the Claimants’ case is or what their intentions were regarding the amendments. So far as the trial timetable was concerned, he said that determining the assignment issue would require, amongst other things, substantial further disclosure from the Claimants and expert evidence on Danish law.  Mr Young said that this would all represent many months of work and that it would be impossible for it all to be done in the limited time available before 6 March 2017.  There was, he said, no prospect of the Defendants being ready for trial if the amendments were permitted. Mr Young did not, however, seek to provide an updated estimate setting out the additional costs that were already in the course of being incurred in respect of such matters or any additional future costs in the event that the amendments were allowed and the trial was adjourned.
23.	The Claimants issued an application for permission to re-amend their Particulars of Claim on 14 December 2016, substantially in the terms of the draft that had previously been provided on 8 November 2016.   Although no application to amend was made on the hearing before Carr  J, it being accepted that it would need to be dealt with on a subsequent date, the draft amended pleading was before the court.
The hearing before Carr J on 20 December 2016
24.	The parties’ submissions at the hearing on 20 December 2016, as they appear from the transcript, included the following:
(1)	Mr Choo Choy QC, for the Defendants, referred to the existing budget which the Defendants had prepared, saying that at the end of the trial the costs were likely to be £4 million and that, recognising that one does not recover all one’s costs, such costs were likely to be a minimum of £3 million.  The reference to minimum was because “we are ignoring for present purposes … the likely increased costs that would flow from an adjournment”.  Although the transcript records Mr Choo Choy as referring, at this stage, to a trial estimate of 5-6 weeks, he tells me that he had been intending to reflect the existing trial estimate of 18-20 days.  
(2)	Having referred to the detailed breakdown of costs, Mr Choo Choy said that one overall point which needed to be taken into account when approaching the estimate was that “the estimate is likely to go up in the light of the claimants’ proposed amendments, which involve not least two important new elements in these proceedings: first, the Danish law expert evidence in relation to the assignment issue and secondly, additional allegations of fraud”.  Having referred Carr J to the draft re-amended pleading, he said that “For present purposes the only relevance of that is that if the amendments are permitted, then it will not be unfair to say … that the £4 million estimate is a conservative estimate” and that “All that we say, for present purposes, is that your Ladyship would be justified in taking the £4 million figure as a realistic estimate of the Defendants’ costs, not least in the light of the costs that have been incurred to date”.
(3)	Mr Choo Choy referred to the fact that expert evidence of Danish law was now “probably” required, subject to what happened to the application to amend.  He said that if the amended case was let in “it was almost inevitable that the trial estimate would go up. At a rough guess, I would think it is likely to go up by about a week”.  When asked what the Defendants’ position was in relation to the application to amend he said that he was not in a position to say, but that “For present purposes what I believe the court can assume is that there is a real risk of an adjournment and a real risk that the expanded case will lead to more costs being incurred”.
(4)	When dealing with the criticism made by the Claimants of the size of the estimated costs to trial, in particular counsels’ brief fees, Mr Choo Choy referred to the fact that the estimates were based on an estimated 18-20 day trial with a preparation period of some 8-10 weeks.
(5)	Mr Eaton Turner, for the Claimants, explained that the Claimants considered that they now had no option but to suggest that the parties explore the possibility of an application by consent to adjourn of the trial, but submitted that the application in respect of the assignment issue was a narrow one.  Carr J’s response was that “It is just not a narrow point.  It is going to open up a whole new line of investigation and allegation and occupy a significant part of the trial”, emphasising that “I do not think it is a small point myself”.  She also noted that, so far as the prospect of an allegation of dishonesty being made was concerned, “I have a Queen’s Counsel standing up and saying, ‘Dishonesty will be alleged’”.
The Judgment
25.	Carr J gave judgment on the application for security the following day, the 21 December 2016.  
26.	Carr J referred to the fact that the trial was currently listed for a 18-20 day trial commencing on 6 March 2017, but that there were other applications in the pipeline and that it was clear that the trial date of March 2017 was in jeopardy.  She referred to the evidence of Mr Young and to the fact that substantial proposed amendments were now in play between the parties and an application to amend had been issued. Carr J dealt with the relevance of the ATE policies, saying that there was a real risk that the insurers would fail to pay anything out at the end of the day and that “The circumstances of the assignments … are likely to give rise not only to issues of contractual uncertainty, but also illegality and fraud”.  She noted that Mr Choo Choy “confirms that the Defendants will say (and plead) that there has been dishonesty on the part of the Claimants” in respect of the assignments.  She added that “The fact that no pleading of fraud has yet been made is, in my judgment, not significant in circumstances where the Claimants have their outstanding application for permission to amend in relation to the newly disclosed three assignments to which the Defendants will then plead their case.  As I have indicated, I have an assurance from the QC acting for the Defendants as to the fact that dishonesty will be in play”.
27.	In relation to quantum, Carr J said the following at paragraph 48(3):
“As indicated above, the combined figure for the Claimants is £1.8 million. I am satisfied that the Defendants’ recoverable costs are likely to be in excess of that figure, albeit perhaps less than £4 million.  The big picture is that these are very large and complex claims raising the most serious of allegations against the Defendants who face personal ruin.  Further, the costs estimates will only go up if re-amendments are allowed, Danish law experts are required, there is further disclosure and vacation of the trial date.  Even without these complications, liability, causation and quantum are all in issue, there are 14 witnesses of fact, there are experts to give evidence and a substantial Commercial Court trial ahead.  This is not the place for a detailed scrutiny of the individual criticisms.  However, there is no obvious objection to the rates adopted by the Defendants’ lawyer.  But there are significant and substantive attacks made on some of the figures put forward by the Defendants, for example, for pre-action costs, in relation to pleadings, for a disclosure extension application, for witness statements and, in particular, for trial costs.  The defence trial costs are estimated at £1.309 million.  The bulk of that is counsel’s fees in the sum of £913,400.  The Claimants have allowed for only £330,000 for counsel.  The main complaint relates to the size of the brief fees.  Mr Choo Choy has responded by saying that the brief fee for him, for example, reflects the fact that some eight to ten weeks of his time have been booked out in addition to the trial period itself.  It may well be that, on any detailed assessment, the Defendants would not recover £4 million by reference to the current estimates, but I am satisfied that they would recover materially in excess of £1.8 million.  Even if a figure of £4 million is unreasonable, a one-third discount, for example, still produces a figure of £2.64 million.  All this means is that even if the policies were effective and provided real and effective security, that security would be limited to £1.8 million which would not be adequate to meet the likely overall recoverable costs on the part of the Defendants in the event of them receiving a costs order in their favour.”
28.	Carr J said that, drawing all the strands together, there was reason to believe that the Claimants would not be able to pay the Defendants’ costs if ordered to do so and there was a real, as opposed to a fanciful, risk that the Claimants’ ATE policies will not be honoured and the Defendants’ recoverable costs in the event of an order in their favour were likely to be materially more than £1.8 million.  She said that, taking all the circumstances in account, it was appropriate to grant security with a focus on the Defendants’ future costs, but without excluding consideration of the defence costs incurred to date.
29.	Carr J concluded her judgment in paragraph 51 as follows:
“Taking into account all the material before me, I make an order that the Claimants do provide security in the sum of £1.2 million.  As it happens, £1.2 million, together with the £1.8 million potentially available under the ATE policies, produces a figure of £3 million which is 75 per cent of the Defendants’ conservatively estimated costs figure and the sum sought on this application, but that is not the basis of my ruling.  My decision is based on all the circumstances, including the nature and size of the claims, the defence estimate of costs and the Claimants’ criticisms of those figures, the existence of the ATE policies, the timing of the application and the likely future progress of the litigation”.
30.	In the discussion following delivery of the judgment, Mr Eaton Turner noted that, given the existing trial date, Carr J had not ordered security to be given in stages or by reference to any particular stage.  He also referred to the outstanding application to amend and to the fact that an application for an adjournment was also likely to be issued.  He sought liberty to apply on the basis that, if such matters occurred, these might constitute a change of circumstances, which might justify an application for payment of security in stages. The following exchange then took place:
MR EATON TURNER:  … I was merely seeking to prevent an argument being raised that this is not a change of circumstances if that particular eventuality came up.
MRS JUSTICE CARR:  I am not agreeing that it is necessarily a change of circumstance.  I am keeping my powder dry.  I would like to think about that.  For the sum of £1.2 million, given I am struggling at the moment to see why, if there were a change of circumstance, it would lead me not to make this block order in any event – what it might lead to is a further application for security.
MR CHOO CHO	Y: I was going to say, the converse of this staging ---
MRS JUSTICE CARR:  Yes, the converse is true.  So I think I do not want to be taken as giving anybody any comfort at all, but, obviously, if the parties wish to re-open or open a new box, they will be at liberty to do so as appropriate.”
The application for additional security
31.	The Defendants’ application for additional security was issued on 20 April 2017 and is supported by a sixth witness statement by Mr Young of the same date.
32.	The Claimants and the Defendants disagree as to whether or not there has been a material change in circumstances.  
(1)	Mr Choo Choy submitted that the earlier application was made by reference to the Defendants’ estimate of costs to the end of trial that had been provided with Mr Young’s third statement, which had been prepared on the basis of the then existing directions and trial date.  He accepted that the Defendants referred to the Claimants’ application to amend and the consequential prospect of the trial being adjourned, but submitted that they did so merely to give the court comfort, when considering the Defendants’ estimate, that the costs that would be incurred in preparing for trial were likely to increase, such that any award of security by reference to that estimate was unlikely to provide more security than was appropriate. In these circumstances, he submitted, the subsequent order of 12 January 2017 giving the Claimants permission to re-amend the Particulars of Claim and adjourning the trial constituted a material change in circumstances sufficient to permit an application to be made for additional security.
(2)	Mr Booth QC, for the Claimants, submitted that by the time of the hearing on 20 December 2016 the Defendants had a choice.  They could have applied for security by reference to the costs that were likely to be incurred on the basis of the existing order for directions, and reserved the right to apply for additional security later if the application to re-amend was subsequently granted and the trial was adjourned.  Alternatively they could have sought to justify the existing request for security on the basis that such developments were likely to occur and that their consequences should be taken into account.  He submitted that the Defendants elected to take the second course and, having done so, cannot now contend that there has been a material change in circumstances.  He submitted that all applications for security in respect of future costs involve some element of speculation as to what will occur and that the mere fact that matters are clearer now than they were then is irrelevant.  He submitted that the prospect of the Claimants being given permission to re-amend and the trial being adjourned were apparent and envisaged when the application was made and that Carr J took such likely developments into account in deciding how much security to award.  
(3)	In response, Mr Choo Choy submitted that, even if the Defendants had relied on the likely consequences of permission to amend being granted and the trial being adjourned to justify a greater amount of security, and Carr J took such matters into account in deciding on the level of security to be awarded, nevertheless there has still been a material change in circumstances given that such events have now occurred and the Defendants are now able to estimate the additional costs that will result.  He also submitted that, to the extent that Carr J’s earlier award took such matters into account in fixing the amount of security to be awarded, allowance can and now should be given for that fact in determining the amount of any additional security.
33.	The Claimants further contend that, if there has been a material change in circumstances, the Defendants’ evidence in support of the application for further security is inadequate and unsatisfactory, and that the estimate of additional costs is excessive.
Change in material circumstances - discussion
34.	The court will not make an order for additional security in the absence of a material change in circumstances.
35.	If the choice between the two alternative approaches identified by Mr Booth had been clearly reflected in the way in which the earlier application was made, the answer to the question of whether there had been a material change of circumstances would have been straightforward.  Unfortunately that distinction is not one which, it appears, the Defendants drew at the time, or, if they did, their evidence and submissions did not clearly reflect the choice made, containing as it did elements pointing in both directions. Nor, it appears, was this something considered by the Claimants. Indeed, Mr Eaton Turner’s efforts to clarify that, if the amendments were subsequently allowed and the trial was adjourned this could amount to a material change in circumstances, suggest, if anything, that the Claimants were assuming that the application was proceeding on the basis of the first of Mr Booth’s two alternatives.  Carr J, for her part, expressed no view on the point, saying that she did not want to be taken as giving anybody any comfort at all.  It is therefore necessary for me to assess the position.  
36.	The prospect of the proposed re-amendments to the Particulars of Claim being granted and the trial being adjourned were matters which were plainly envisaged when the application for security was heard. The draft pleading had been provided to the Defendants some weeks previously and the application to re-amend had been issued by the time of the hearing.  The question of whether the trial would need to be adjourned was also the subject of discussion between the parties. Furthermore, although permission to re-amend had not yet been granted nor had the trial yet been adjourned, the parties were also proceeding on the assumption that this was likely to occur or, at the lowest, that there was at least a real risk that it would.  Carr J commented that, in her view, the fact that no pleading of fraud had yet been made was not significant in circumstances where the Claimants had their outstanding application for permission to amend in respect of the assignments to which the Defendants would then plead their case, recording Mr Choo Choy’s confirmation that the Defendants would say and plead that there had been dishonesty on the part of the Claimants in respect of the assignments.  If the amendments were granted, it was the position of both parties that an adjournment of the trial would be necessary.
37.	This does not, however, necessarily determine the matter. There remains the question as to the basis on which the Defendants’ application proceeded and was dealt with. As Mr Booth’s two alternatives indicate, whether something was envisaged is not necessarily determinative.  The answer may also depend on whether and if so how it was taken into account for the purposes of determining the application for security.
38.	On this, the position is, as I have already said, considerably less clear.  However, in my view, Mr Choo Choy was, with one important qualification, broadly correct to characterise the Defendants’ position as having been that the prospect of permission to re-amend being granted and the trial adjourned supported the conservative nature of the existing estimate of costs.  In particular:
(1)	The starting point is that the Defendants’ estimate which was provided in support of the application did not seek to provide an estimate in respect of the Defendants’ future costs on the assumption that permission to re-amend was granted and the trial was adjourned. 
(2)	The important qualification is that Mr Young did request Carr J to take at least some of the additional costs resulting from such matters into account when considering how much security to award. Thus he referred, for example, to serious deficiencies in the Claimants’ disclosure in respect of the assignments, which were causing the Defendants to incur substantial additional costs which they asked to be secured. He also referred to the issue of whether the trial would be adjourned, explaining that this was relevant as these issues were necessarily causing very significant additional work to be done and hence costs incurred for which the Defendants were seeking security. I read these statements as referring to costs in respect of matters which were already in the course of being addressed by the time of the hearing, rather than to all and any additional costs potentially resulting from an adjournment which Mr Young had said he was not presently in a position to provide an estimate for. 
(3)	Mr Choo Choy’s oral submissions were, in my view, designed, as he said, to support his submission that the estimate of costs was likely to turn out to be a conservative one.  Thus, he referred to the fact that for present purposes he was ignoring the likely increased costs that would flow from an adjournment and said that the only relevance of such matters was that, if the amendments were allowed, the estimate would be a conservative one.
39.	So far as the Claimants are concerned, Mr Robert Lawrie’s second witness statement dated 15 November 2016, served on behalf of the Claimants, addressed the quantum of the Defendants’ estimated costs by reference to a trial on the basis of the existing order for directions, although this is not surprising given the date that it was produced.  In addition, as I have already mentioned, Mr Eaton Turner, for what it is worth, appears to have been proceeding on the basis that an adjournment of the trial would amount to a material change in circumstances.  
40.	It is correct that, as Mr Booth submitted, Carr J stated, in paragraph 51 of her judgment, that the figure she awarded was one which was based on all the circumstances, including “the likely future progress of the litigation”. However, this needs to be read in context.  It does not, in my view, indicate that she was intending to provide an award of security which would necessarily cover the Defendants’ entire costs to trial in the event that permission to re-amend was granted and the trial was adjourned, not least because, whilst those may have been likely developments, it was not, at that stage, clear that they would occur and, more importantly, even if they did, no estimate had been provided to her which would have enabled her to make a reasonable assessment of the Defendants’ entire future costs to trial in that event and the Defendants were not seeking security to cover such matters at this stage.
41.	Put another way, I do not consider that Carr J was taking the prospect of permission to re-amend being granted and the trial being adjourned into account in such a way that neither the actual occurrence of such events nor their consequences could amount to a material change in circumstances.  Whilst Carr J plainly reached no decision on this, it is worthy of note that, when the question was raised by Mr Eaton Turner after she had given judgment, her immediate response was consistent with this view.
42.	It would, in my view, be wrong, in these circumstances, for the court to conclude too readily that there has been no material change in circumstances.  Whilst, as Mr Booth submitted, all applications for security in respect of future costs are likely to require some element of prediction as to the future, it would be unsatisfactory if a defendant was unable to apply for any further security merely because a potential event had been one which it was apparent might occur. The present application should not be dismissed simply on the basis that the approach adopted by the Defendants at the hearing necessarily means that the subsequent grant of permission to re-amend and the adjournment of the trial cannot have given rise to a material change in circumstances or permit an application for additional security to be made.
43.	This is, in my view, supported by the fact that an award of security is designed to take into account the “balance of prejudice”, that is to say involves a comparison between the harm that a defendant may suffer if too little security is ordered and the harm that a claimant will suffer if the amount is too high; see, for example, Stokors SA v IG Markets Limited [2012] EWCA Civ 1706 at [34], and by the fact that the Claimants have not said that the claim would be stifled if additional security was ordered to be provided.  
Quantum
44.	It is necessary therefore to consider the specific additional costs which the Defendants say that they have incurred or will incur, to determine whether or not they arise from a material change of circumstances and, if they do, to determine what amount, if any, should be covered by an order for the provision of additional security, having regard to the existing order for security made by Carr J.  
45.	For reasons which I have already explained, in my view a broad distinction needs to be drawn between costs in respect of matters which were already being addressed by the time of the hearing for which Mr Young said security was being sought, and further costs which would or might be incurred consequential on permission to re-amend being granted and the trial being adjourned, which were not, at that stage, yet being addressed nor estimated in the Defendants’ estimate of costs.
46.	The Defendants estimate that the re-amendment of the Particulars of Claim and the adjournment of the trial have increased their estimated costs by approximately £1.18 million and seek additional security of £885,000 reflecting 75% of the total additional costs.  The detail of the additional costs is set out in Mr Young’s sixth statement.  He divides such costs into two parts, namely incurred costs between 1 November 2016 and 28 February 2017 amounting to approximately £175,000, and an estimated forecast of additional costs from 1 March 2017 amounting to £838,000.
47.	The Claimants contend that the Defendants’ evidence in support of the application for further security is inadequate and unsatisfactory, and that the estimate of additional costs is excessive.
Incurred costs between 1 November 2016 and 28 February 2017
48.	The first category, which Mr Young deals with in paragraph 19 of his sixth statement, relates to six matters, namely: (a) the provision of draft Re-Amended Particulars of Claim on 8 November 2016; (b) the Defendants’ Request for Further Information dated 16 November 2016 to which a response was served on 16 December 2016; (c) proofing of witnesses; (d) A Notice to Prove which the Defendants served on 9 December 2016; (e) disclosure in respect of the assignment issue, including an application for specific disclosure which the Defendants issued on 14 December 2016; and (f) the application to re-convene the CMC which was made on 14 December 2016.  Such costs are said to total £175,000, although no breakdown is provided as between them.
49.	I do not consider that it would be appropriate, in the circumstances, to make an order for the provision of any additional security in respect of the costs covered by this first category, for the following reasons:
(1)	All of the costs relate to specific matters which had arisen and were already being addressed prior to the hearing of the application for security on 20 December 2016.  They were all matters which pertained by that date and, to the extent that they did not pertain, were specifically envisaged.
(2)	Mr Young, in his fourth statement dated 1 December 2016, referred to the fact that the assignment issue was causing significant additional work to be done and hence costs to be incurred in respect of such matters, for which the Defendants sought security.  In my view, such statements must be taken as having been intended to cover the matters referred to in this first category.
(3)	The Defendants could and in my view should have ensured that their estimate covered costs already incurred by the date of the hearing, even if it did not in fact do so. They could also reasonably have been expected to have provided an estimate of any additional future costs in respect of such matters through to at least 28 February 2017, if they considered it necessary to do so, given in particular that at that stage the trial was still scheduled to start on 6 March 2017. 
(4)	In any event, Mr Young does not seek to identify what portion of the costs were incurred between 1 November 2016 and the date of the hearing, on the one hand, and between the date of the hearing and 28 February 2017, on the other hand, so as to enable a distinction to be drawn between those two periods, if it had been appropriate to do so. 
(5)	There is no reason to believe that Carr J did not take such matters fully into account when considering “all of the circumstances” including “the likely future progress of the litigation” and deciding what order to make.
50.	It follows that, in respect of this first category of costs, the court is effectively being asked to re-consider a decision made on the basis of arguments which, in my view, were made or which could and should have been made at the time.
Estimated forecast increased costs only from 1 March 2017
51.	The second category, which Mr Young refers to in paragraph 20 of his sixth statement, reflects an estimated forecast of increased costs from 1 March 2017 and relates to nine matters.  
52.	Whilst it is not necessary in this judgment to deal with each such matter in detail, the following points can be made about main items:
(1)	There are claims for additional estimated costs in respect of: (a) amended pleadings (£93,000); (b) disclosure (£115,000); and (c) specific disclosure (£35,000). In large part these matters, in my view, fall to be dealt with in the same way as the equivalent item in the first category of costs. In particular, the costs in respect of amended pleadings and disclosure in large part consist of further estimated costs in addition to those sought in respect of the same matters for the period between 1 November 2016 and 28 February 2017.  The one exception concerns the cost of the E-disclosure provider of £70,400. Mr Young states that, given the adjournment of the trial, the Defendants now require the services of an e-disclosure provider for an additional 16 months.  
(2)	There are also claims for increased estimated costs in respect of: (d) supplemental witness statements (£62,000); (e) Danish law evidence (£34,000); and (f) financial expert (£27,500).  For the reasons I have already explained, the first two claims fall into a slightly different position from costs in relation to pleadings and disclosure, although the potential need for supplemental witness statements and expert evidence had also been identified prior to the hearing before Carr J.  In my view, some provision for additional security may be appropriate in respect of these items.  The claim in respect of the third item concerns the costs of the Defendants’ lawyers and expert re-familiarising themselves with the expert reports.  In my view, it would not be appropriate to take this element into account.
(3)	The main item concerns trial preparation and trial (£400,000).  This is said to reflect an increase in the trial length by four days and the fact that the trial will now not take place before 2018.  The original estimate for trial was £1.3 million.  The majority of the increase represents an increase of £269,000 in respect of counsels’ fees, on top of an original estimate of £913,000.  There is also an increase in Cooke, Young & Keidan LLP’s costs of some £118,000, on top of an original estimate of £308,000.  I do not consider it appropriate to order additional security on a pro-rata basis, as a result of an increase in the trial length from 18-20 days to 20-24 days. I note that Mr Choo Choy himself, during the hearing before Carr J, appears to have been unclear whether the existing estimate was 20 or 24 days.  Furthermore, he appeared to be unclear, at the hearing before me, whether his estimate for trial preparation had or would need to increase from the eight to ten weeks preparation that had previously been allowed for. This was not surprising, given that the exercise is not a mathematical one.
53.	I also note that one factor that Mr Young previously relied on as increasing the amount of the original estimate was the need to deal with parallel work-streams given the compressed timetable.  This should no longer be necessary or necessary to the same extent, and this needs to be taken into account.
54.	There are, therefore, certain limited elements of the estimate of additional costs for the period from 1 March 2017 identified by Mr Young, in respect of which, in my view, it would be appropriate to award some further amount by way of security, on the basis that I do not consider that such an application was intended to be precluded by the order made by Carr J.  However, it will be apparent that I also accept the Claimants’ submission that a substantial part of the costs sought by the Defendants are, for one reason or another, not justified.
55.	So far as the amount is concerned, it is necessary, as both parties accept, to take a broad brush approach, having regard to all the circumstances.  This is particularly so in the present case given that Carr J stated, when making her earlier order, that she was taking into account, amongst other things, the likely future progress of the litigation but, given the broad brush nature of the exercise she was engaged in, did not elaborate further.  Mr Choo Choy accepted that her order may, as a result, have included some general allowance for such matters, but submitted that I should make such deduction as I consider appropriate to allow for this.
56.	I consider that, in all the circumstances, it would be appropriate to order additional security amounting in total to £200,000. 
57.	In reaching this conclusion I have taken into account all the circumstances, including, in particular, the extent to which the Defendants’ further estimated costs follow, in my view, a material change in circumstances from those by reference to which the Defendants applied for security in December 2016, together with the reasonableness of such costs, having regard, amongst other things, to the sums previously sought by the Defendants, the order made by Carr J on 21 December 2016 and the overall level of security awarded to the Defendants.  I have also taken into account the balance of prejudice.
58.	Subject to hearing any submissions from the parties on this issue, I consider that the Claimants should be permitted to provide such security in the form ordered by Carr J in her order of 28 February 2017.
Reserved order for costs
59.	The second matter which I need to deal with concerns certain costs that were reserved by Carr J in paragraph (4) of her order of 12 January 2017. Those costs are the Defendants’ costs of and occasioned by the Re-Amendment Application and their costs of the Adjournment Application and the Claimants’ costs of the Re-Amendment Application and the Adjournment Application.
60.	 I can summarise my conclusions in respect of such matters fairly shortly:
(1)	The Claimants’ cost of the application to re-amend the Particulars of Claim should be paid by the Defendants.  In my view, having regard to the way in which the matter developed, the Defendants should have consented to such amendments, without the need for an application to be issued.
(2)	The costs of and occasioned by the re-amendments themselves fall into two categories. Both parties submit that the costs in respect of the non-assignment re-amendments should be costs in the case, and I make that order.  So far as the costs of and occasioned by the assignment re-amendments are concerned, the Claimants submit that these costs should be reserved, and that is the order I make.  The Defendants’ re-amendments on this issue are not, in reality, merely responsive and are likely to have been made in any event.  Furthermore, given the serious nature of the Defendants’ allegations, in my view it would be appropriate for the court to be able to revisit these costs in the event that the allegations were subsequently to fail.
(3)	The costs of the application to adjourn, which was made by the Claimants on 6 January 2017 and consented to by the Defendants on 10 January 2017, should be costs in cause.  In my view, the adjournment was necessitated by the desire of both parties to introduce new allegations into the proceedings.
Conclusion
61.	I ask the parties to prepare a draft Minute of Order reflecting the directions which I made on 28 April 2017 and the effect of this judgment.