Claimants in a £1bn case against the National Lottery must pay full costs after a court ruled their legal strategy was “cavalier” and “highly unreasonable.” The decision comes after a lengthy trial that saw the claimants abandon most of their arguments, leaving the court and defendants scrambling to respond.
The ruling by Mrs Justice Joanna Smith DBE in The New Lottery Company Ltd & Anor v The Gambling Commission marks a rare and severe penalty. The judge ordered the claimants to cover indemnity costs for the entire case, rejecting a last-minute request to reduce the bill by 20%.
The claim, which challenged the Gambling Commission’s handling of a 2022 National Lottery licence award, was described as the most financially significant procurement process in UK history. However, the judge dismissed many of the allegations as weak and speculative from the start.
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Over 81 initial issues were raised, but most were dropped before or during the trial. The judge called this “wholly unsatisfactory” and noted that no explanation was given for the sudden abandonments. This left defendants facing unexpected costs as they prepared for issues that were later discarded.
The claimants argued the court should split costs based on individual issues or time periods, a move the judge rejected. She emphasized that defendants had spent money throughout the case dealing with shifting allegations, which could not be fairly divided.
“The pleadings were inadequate and unparticularised from the outset,” the judge wrote. “There is a need to mark disapproval of such extraordinary conduct by the making of such an order.”
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The case had drawn attention for its scale and the claimants’ aggressive legal tactics. Their attempt to reduce costs by £4m was dismissed, with the judge stating there was “no basis” for the argument.
Now, the defendants will assess the full costs, which could reach millions. The ruling sends a message to future litigants about the consequences of abandoning claims mid-trial.
Legal experts note that indemnity costs are typically reserved for extreme cases. This outcome highlights the court’s stance on accountability in high-stakes litigation.
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The case has already been billed as a landmark moment for UK legal proceedings. With the final costs assessment pending, the focus now shifts to how this ruling will influence future disputes.
Some legal analysts suggest the decision may deter similar claims, given the financial risks involved. However, others argue the ruling could set a precedent for strict cost penalties in complex cases.
The Gambling Commission has not yet commented on the ruling, but the outcome is expected to shape how regulatory challenges are handled in the future.
