England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		01/02/2012

Mr Justice Warren :

1. In May of this year, I am due to hear an action concerning the IBM Pension Plan ("the Scheme"). Those proceedings are referred to as the C Plan Proceedings. The claimant in that action is IBM United Kingdom Pensions Trust Limited ("the Trustee") as trustee of the Scheme. The first and second defendants are IBM United Kingdom Holdings Limited and IBM United Kingdom Limited (together "IBM") and the third defendant is George Metcalfe ("Mr Metcalfe"), a member of the Scheme. In those proceedings, the Trustee seeks rectification of various deeds and rules which have governed the Scheme from time to time and declaratory relief in relation to the Preservation Requirements as applied to the Scheme.
2. There is also on foot another action concerning the Scheme. Those proceedings are referred to as the Project Waltz proceedings. The claimants in that action are the two IBM companies. The first and second defendants, Stuart Dalgleish and Lizanne Harrison are members of the Scheme. The third defendant is the Trustee. In those proceedings, IBM seeks to clarify the validity and lawfulness of changes purportedly made by IBM to the Scheme and to another pension scheme known as the IBM IT Solutions Pensions Plan pursuant to a project known internally as Project Waltz. The major complaint of the members, represented by Mr Dalgleish and Mrs Harrison, is that IBM was in breach of the implied duty of good faith which is owed by an employer to the members of a pension scheme when exercising its functions in relation to such a scheme.

The Beddoe application

3. Before commencing the C Plan proceedings, the Trustee sought the directions of the Court in a third action commenced by it for that purpose ("the Beddoe proceedings") to which Mr Metcalfe and IBM were joined as defendants. The claim form was issued on 15 October 2010. In it, the Trustee indicated (at paragraph 4) that the proceedings were brought against Mr Metcalfe in his capacity as a member of the Scheme. It stated that it would seek a representation order under CPR 19.7(2) appointing him as a representative of all members having an interest in asserting the claims which were identified in paragraph 3 ("the Claims"). It indicated that the proceedings were brought against IBM as employers under the Scheme. And it stated that it would seek a representation order appointing them as representatives of all other persons (if any) who might have an interest in arguing against the claims.
4. In paragraphs 7 to 13 of the claim form, the Trustee put forward three options for the form of relief which might be granted:

a. Under Option 1 Mr Metcalfe would commence proceedings raising the Claims against IBM, joining the Trustee as a defendant and seeking representation orders to similar effect as those I have mentioned. Mr Metcalfe would have a costs indemnity out of the assets of the Scheme. The Trustee would be authorised to participate in the proceedings as a neutral party with its own costs indemnity.

b. Under Option 2, the Trustees would itself bring and prosecute the Claims against IBM with a costs indemnity out of the fund. Nothing was said about participation by Mr Metcalfe.

c. Under Option 3, the Trustee would administer the Scheme under its apparent provisions ignoring the Claims unless and until they were established in separate proceedings brought by a member or members against IBM at their own expense.

5. Both before and after the issue of the claim form, the shape of the intended proceedings had been a matter of discussion in correspondence between the Trustee, IBM and those acting for Mr Metcalfe. That correspondence was "without prejudice" and I have not been referred to it. However, Andrew Simmonds QC, who acts for IBM, tells me, with the consent of all parties, that in the course of that correspondence, IBM proposed Option 1 rather than Option 2 and that it was the Trustee and Mr Metcalfe who proposed Option 2 but, in the case of Mr Metcalfe, subject to his obtaining a prospective costs order. Edward Sawyer, who appears for the Trustee, has put a little more flesh on that. The chronology was as follows:

a. Option 2 was first raised by the Trustee. This was on 15 September 2010.

b. It was proposed as a possibility in the claim form in the Beddoe proceedings.

c. Mr Metcalfe indicated that the proposal was acceptable to him, subject to certain conditions which I will mention in a moment, in his witness statement dated 22 November 2010.

d. IBM, as a result of subsequent correspondence in and after December 2010, accepted that Option 2 was the way forward, agreeing to the proposals.

e. The first open letter is dated 18 February 2011 from Dickinson Dees (IBM's solicitors) to DLA Piper UK LLP (Mr Metcalfe's solicitors). In that letter, Dickinson Dees confirmed that IBM would be prepared to consent to the making of an order on the basis that the Trustee acted as Claimant in relation to the substantive issue and to agree to the case being heard together with the Project Waltz proceedings, with Mr Metcalfe being joined as a defendant. Nothing was said in the letter about his being appointed as a representative defendant. The only thing which was said about costs was that it was a further condition of IBM's consent that "agreement can be reached between the parties as to the counsel representation employed by each party, and particularly as it impacts upon the costs position". No such agreement was made about that at the time nor has any been made since then.

f. The reply to that letter came on 7 March 2011. I do not need to go into it in detail. It is enough to note that DLA Piper said, in relation to counsel representation at the trial, that a sensible and proportionate approach would be adopted but that it was not possible at that stage to say what the result would be. Doubt was expressed about whether not have leading counsel attend the trial would result in costs saving and concern was expressed about IBM "even attempting to dictate the level of representation for the representative beneficiary. Be that as it may, there is no desire on the part of the representative beneficiary to increase costs unnecessarily".

g. The final concord is to be found in the order of Newey J dated 12 April 2011 in the Beddoe proceedings ("the Consent Order").

6. It is the Trustee's position that it was keen to promote Option 2 rather than Option 1 because this would be the less costly option. The Trustee had already done a large amount of work, at considerable expense, and saw Option 1 as leading to unnecessary duplication of cost. It would also be a more expensive approach to the ongoing proceedings since the relevant documentation other than IBM's own documentation was largely that of the Trustee which it would have to consider even under Option 1.
7. It is necessary to remark here that there is enormous concern, dissatisfaction and resentment (whether or not that is justified is not for me to express a view at this point of time) on the part of the members in relation to IBM's actions in relation to the Scheme. The members (whose views are articulated by Mr Metcalfe) are concerned also to ensure that the Trustee will carry out its task in prosecuting the C Plan Proceedings in the most effective way.
8. For his part, Mr Metcalfe was willing to agree to Option 2 only if the following conditions were fulfilled:

a. He was to have a "watching brief" (his words in his witness statement) in order to assure himself that the interests of the members were being properly represented in what became the C Plan proceedings "which would include the opportunity to review the statements of case and evidence serviced…. to file evidence myself… and to attend the trial through my legal representatives".

b. He was to have an appropriate prospective costs order, for his costs of fulfilling the watching brief.

c. Either the claims should be raised in the Project Waltz proceedings or they should be heard immediately before those proceedings before the same Judge.

The Consent Order

9. The Consent Order provides for the following. The Trustee was authorised to bring and prosecute the Claims "against the Defendants" by way of separate proceedings under CPR Part 7. "The Defendants" was a reference to the defendants in the Beddoe proceedings and thus included Mr Metcalfe. His costs were dealt with under paragraph 5. Paragraph 5.1 provided that the Trustee was authorised to pay from the Scheme assets "the costs of and incidental to the Part 7 Proceedings incurred by [Mr Metcalfe] in accordance with (iii) below…." Paragraph (iii) provided as follows:

"(iii) [Mr Metcalfe's] costs so payable shall (in the absence of any further order) be limited to his costs of:

(a) monitoring the Part 7 Proceedings with a view to sharing information with and assisting the representative beneficiary Defendants in the related proceedings [the Project Waltz proceedings]… insofar as the Claims are relevant to those related proceedings; and/or

(b) supplementing (but not duplicating) the Trustee's case in the Part 7 Proceedings;"

10. Paragraph 7 of the Consent Order provided that any party could apply to vary or discharge paragraphs 5 and 6 but only in respect of costs to be incurred after the date of the application.

The present application and the events leading up to it

11. The present application is made by IBM to discharge the costs order in favour of Mr Metcalfe in the Consent Order. If that fails, a costs-capping order is sought. The foundation of the discharge application is Mr Metcalfe's status – or rather lack of it – as a representative under CPR 19.7.
12. It is to be noted that the Consent Order says nothing about how the beneficiaries of the Scheme other than Mr Metcalfe would be bound pursuant to the decision of the Court in the Part 7 Proceedings. This is, in a sense, a formality since it will be for the Court at the end of the proceedings, or at an earlier stage if thought fit, to make an order appointing a person as a representative beneficiary for that purpose under CPR 19.7. A representation order might, in any case, be thought to be unnecessary in the light of CPR 19.7A which permits trustees to bring a claim in their capacity as such without adding any persons who have a beneficial interest in the trust. Any judgment or order given or made in the claim is binding on the beneficiaries unless the court orders otherwise. Notwithstanding that Rule, it would make obvious sense, in the present case, for either the Trustee or Mr Metcalfe to be appointed at some stage to represent the beneficiaries for the purposes of the C Plan proceedings. I say "in a sense" because Mr Simmonds submits that, at least for so long as Mr Metcalfe is not acting in a representative capacity following the making of representative order, the Court has no power to make a prospective costs order in his favour; and submits also that the costs protection given to him in the Consent Order should be discharged for the future.
13. That submission turns on what is, and is not, in the Particulars of Claim as eventually formulated in the C Plan proceedings which were commenced pursuant to the authorisation in the Consent Order. What one does find in those Particulars is that the Trustee seeks an order appointing itself to represent the beneficiaries of the Scheme. What one does not find is anything suggesting that Mr Metcalfe should be appointed to do so.
14. At this point, I turn to address an important area of disagreement between the parties about what was common ground when the Consent Order was made. IBM's position is that it had understood, when the Consent Order was made, that Mr Metcalfe would be a representative defendant. It was on that basis that it agreed to Mr Metcalfe having his costs out of the Scheme and thus, ultimately, at the expense of IBM which is responsible for meeting the balance of the cost of the Scheme over and above members' contributions. The Trustee and Mr Metcalfe say that it was not their understanding in agreeing the Consent Order that Mr Metcalfe would be appointed as a representative defendant and I rather gain the impression that they consider IBM had that understanding too. I cannot resolve precisely who understood what on this application. In my view, nothing turns on it for reasons which I will come to.
15. The Particulars of Claim in the C plan proceedings, dated 9 August 2011, explain, at paragraph 5, that the Trustee brings the claim in its capacity as trustee of the Scheme and so as to bind the beneficiaries under CPR 19.7A. In the alternative, it seeks an order appointing it under CPR 19.7(2) to represent all members and beneficiaries other than Mr Metcalfe in whose interests it would be to bring the claim. Similarly, a representation order is sought that IBM represent all other members. It is stated that Mr Metcalfe has been made a defendant at his own request.
16. Finding that the Particulars of Claim did not, contrary to its expectations, seek such a representation order, IBM suggests, in effect, that the foundation of the Consent Order is no longer present. There was thus a change of circumstances justifying an application to discharge the costs order in Mr Metcalfe's favour for the future, a possibility envisaged by the express terms of the Consent Order itself which I have mentioned. That application was made in an application notice dated 17 January 2012.
17. Mr Simmonds acknowledges that his point is a somewhat technical one. But he says it is an important one. He acknowledges that the point would not be available if Mr Metcalfe were in fact appointed as representative under CPR 19.7 but correctly notes that no application has been made that he should be so appointed. I do not know what his position would be if an application were made to that effect, with perhaps a consequential amendment to the paragraphs of the Particulars of Claim which I have mentioned.
18. In this context, Mr Simmonds relies on two well-known cases concerning the principles on which lost orders or prospective costs orders are made in disputes relating to trusts, namely Re Buckton [1907] 2 Ch 406 and McDonald v Horn [1995] 1 All ER 961 (referring in particular to Hoffmann LJ at 972e-g and 973f-g). Mr Tennet relied, in addition, on the decision of Park J in British Airways Pension Trustees v British Airways [2000] 40 PBLR, [2000] PLR 311, the decision of Arnold J in HR Trustees Ltd v German & IMG (UK) Ltd [2010] EWHC 3467 (Ch) ("IMG") and Singapore Airlines Ltd v Buck Consultants Ltd [2011] EWCA Civ 1542, [2012] PLR 1. I do not propose in this judgment to go into a further detailed consideration of the authorities. Arnold J did so in IMG in relation to the cases preceding his own judgment.
19. I do, however, make the following observations. I do not think that it is contentious to say that in cases with Buckton categories 1 and 2, it is necessary to show that the trial judge would almost inevitably make an order for costs in favour of the relevant beneficiary, that is to say where the costs discretion can be exercised only one way. Subject to the McDonald v Horn exception, a case in Buckton category 3 is not appropriate for a prospective costs order. The extent of that exception is not, perhaps, entirely clear. There is certainly an exception where there are allegations of fraud or negligence made against the trustees themselves and there is an exception where the trustees were not neutral but actively opposed the members' claims. Arnold J rejected a submission that the exceptions went no further than that. But, it is fair to point out, that Arnold J also referred to Hoffmann LJ's own reasoning, referring to the latter's reference to the representative beneficiary as "a person with a limited interest in a… pension fund [who] is alleging injury to the fund as a whole and seeking restitution on behalf of the fund".
20. I do not gain much, if any, assistance from the British Airways case. Ultimately, that can be seen as an application of conventional principle to a Buckton category 1 case. The trustees decided to join 2 different beneficiaries with separate legal teams for perfectly sound and understandable reasons even though, in legal theory, there was no actual conflict between them and they might have instructed the same legal team. That does not really assist in a case such as the present which, in my view, if it is to be brought within one of the Buckton categories at all, it is, in my view, a Buckton category 3 case. It must be remembered that the jurisdiction to make a prospective costs order (not being a consent order) in a McDonald v Horn type of case is found in section 51 Senior Courts Act 1981. The exercise of that jurisdiction is constrained by judicial decision. There is always room, therefore, for an exceptional case to be dealt with on its own facts; and, indeed, when a case does not fall neatly within any of the Buckton categories, the court must exercise its statutory jurisdiction in the way it considers best to achieve fairness and justice.
21. I do not need to decide, in the present case, whether it would have been appropriate, as a matter of the exercise of discretion, for the court in the exercise of its jurisdiction under section 51 to impose something along the lines of paragraph 5 of the Consent Order in the face of opposition from IBM. I do not need to do so because the parties agreed to the Consent Order so that the Court did not need to engage in a detailed consideration of the exercise of the discretion.
22. Mr Simmonds has not suggested that the Court had no jurisdiction to make the costs order in favour of Mr Metcalfe found in the Consent Order (although I will consider that possibility in a moment). However, what he does submit is that, now it is known that Mr Metcalfe is not to be a representative beneficiary, the case is one where the Court would not (either as a matter of jurisdiction or of discretion) have made that costs order. This makes all the difference, he says, so that the order should now be discharged,
23. I reject that submission. Assuming that it was within the jurisdiction of the Court to make the costs order in favour of Mr Metcalfe in the Consent Order without appointing him as a representative, the onus lies, in my judgment, on IBM to show a change of circumstance which justifies the discharge of the order. It has failed to do so. Mr Simmonds' point is not only technical, as he accepts, but is also one which does not lead to the result for which he contends.
24. Normally, a representative beneficiary is appointed because he had come before the Court to argue the substance of the entire case and, because his interest is the same as those whom he represents, he is appointed in order that the entire class should be bound. If, for some reason, he can be seen not to be acting in the interest of the class (a conflict may become apparent, or he may wish to settle his own claim) a representation order appointing him will not be made or, if already made, it will be discharged. If a representation order is made an early stage, it is implicit that the representative will in fact prosecute the proceedings in the interests of the class. But it is not necessary for a representation order to be made at an early stage. It can equally well be made at the end of the proceedings. And at that late stage, it does not much matter who is appointed as a representative provided that the Court is satisfied that the interests of the class have been fully aired.
25. In the present case, whether or not Mr Metcalfe is appointed representative, the substance of the case will be argued by the Trustee. That was the whole idea behind the Consent Order. Mr Metcalfe's role was always envisaged as being the limited role as set out in paragraph 5.1(iii) of the Consent Order. It makes no difference at all to that role whether he is appointed a representative or not provided, of course, that he carries out his functions in the interests of the members of the Scheme. But just as a representative beneficiary who actually is the substantive party prosecuting the claim at the expense of the fund must act in the interests of his class, so too Mr Metcalfe, it seems to me, has a role which can only be exercised on behalf of his class and not for his own purposes. It is implicit in his function as identified in paragraph 5.1(iii) that he is a defendant precisely to protect the interests of the class. To raisethe technical point that he is not formally appointed as a representative under CPR 19.7 changes that is, in my view, to place form over substance in an inadmissible way. To put the same point in different words: Mr Metcalfe was joined as a defendant to protect not only his own interests but those of all Scheme members and beneficiaries. This is manifest from, in particular, paragraph 5.1(iii)(a) of the Consent Order which describes his monitoring role as being to assist the representative beneficiaries in the Project Waltz proceedings. That role is fulfilled whether or not he is appointed as a representative in the C Plan proceedings, proceedings which it is not his function to prosecute.
26. In any case, it would seem odd, at this stage, to appoint Mr Metcalfe as a representative when his role is, and has always been intended to be, so limited. Why, one might ask, should the Court appoint at this stage a person as a representative when that person will not be prosecuting the claims rather than the person who actually is prosecuting them, that is to say the Trustee. If a person is to be appointed as a representative with duties to his class to ensure that claim is prosecuted, one might more normally expect to see an unqualified costs order. That is not to say that the representative would then have to do everything himself (through his legal team). There can be a division of responsibility between different parties so that duplication of costs is avoided. But the role of such a representative is more onerous, I suggest, than that of Mr Metcalfe in the C Plan proceedings.
27. For those reasons, I reject the application to discharge the costs order in favour of Mr Metcalfe. There is a second reason for rejecting it. Mr Simmonds does not submit that, had Mr Metcalfe in fact been appointed as a representative under CPR 19.7, it would nonetheless be appropriate to discharge the costs order. It is the absence of such an appointment which makes the difference. One reason why it makes a difference is because the Court has no power, he says, to make such an order in the absence of such an appointment in the light of Buckton and McDonald v Horn.
28. I reject that approach. In my judgment, as a matter of jurisdiction, the Court is able to make such an order even though it is the Trustee rather than Mr Metcalfe who is to be appointed under CPR 19.7. As I have said already, the jurisdiction is to be found in section 51 Senior Courts Act 1981; it is a jurisdiction which is constrained by principles established in case-law but is, nonetheless, one which must be exercised to achieve fairness and justice. The present case is unusual, perhaps unique, on its facts. The applicable principles do not, in my judgment, lead to a conclusion that the Court would have no jurisdiction to make a costs order in favour of Mr Metcalfe in the absence of an order appointing him as a representative. Whether or not it would have been appropriate, in April 2011 when the Consent Order was made, for the Court, in exercise of its discretion, to have imposed such a costs order in the face of opposition from IBM is not, as I have said, something which it is necessary to decide. The point is that there would have been jurisdiction to do so even if everyone had understood that Mr Metcalfe was not to be appointed as a representative under CPR 19.7.
29. If that were not so, it would follow that the Court had no jurisdiction to make the Costs Order in the first place. The Court would need to know, before it made such an order, that Mr Metcalfe was intended to be appointed as a representative and to make its order for costs conditional on such appointment being made. However, nobody has suggested that there was no jurisdiction to make the Consent Order even though, consistently with it, the claim in the C Plan Proceedings seeks an order that the Trustee, rather than Mr Metcalfe, be appointed as representative.
30. The application to discharge the costs order in favour of Mr Metcalfe in the Consent Order is dismissed.

Costs capping

31. Mr Simmonds' alternative case is that Mr Metcalfe's costs should be capped. The detail of that, if he is successful, can only be decided once the parties have received my decision in principle to indicate the parameters within which financial limits are to be determined.
32. It is necessary to start with an examination of precisely what it is that the costs order provides for. To repeat, Mr Metcalfe is entitled to his costs of

"(a) monitoring [the C Plan proceedings] with a view to sharing information with and assisting the representative beneficiary Defendants in the related proceedings [the Project Waltz proceedings]… insofar as the Claims are relevant to those related proceedings; and/or

(b) supplementing (but not duplicating) the Trustee's case in the [C Plan proceedings]"

In that context "the Claims" are the rectification and related claims which have now been raised by the Trustee in the C Plan proceedings.

33. Mr Simmonds submits that paragraph (a) envisages a passive role. Of course, Mr Metcalfe and his team actually have to do something – they have to monitor the proceedings – but that is passive in contrast with taking an active role in the prosecution of the proceedings. Mr Tennet accepts that Mr Metcalfe's role is passive.
34. What is the purpose of the monitoring? It is two-fold. The first purpose is to obtain information which is then to be shared with the representative members in the Project Waltz proceedings (I shall refer to them as the PW Defendants). The second purpose is to enable Mr Metcalfe to assist those defendants in their conduct of that action. On a literal reading, Mr Metcalfe only gets his costs of monitoring but it would be absurd, in my view, to suggest that he cannot also recover, for instance, his costs of sharing the information which he gleans. He might share it by providing a transcript to the PW Defendants; he must surely be entitled to his photocopying costs. But he could not, in contrast, recover the costs of involving himself deeply with the PW Defendants in the formulation and progress of their case on the pretext of "assisting" them: there has to be a link between what is discovered as a result of the monitoring and assisting the PW Defendants.
35. The second purpose is to supplement the Trustee's case in the C Plan proceedings, but there is to be no duplication. Mr Simmonds says that this purpose is restricted to raising matters relevant to the Claims and does not enable Mr Metcalfe to raise matters which go simply to bolstering the case of the PW Defendants in the Project Waltz proceedings. For instance, it would not be right for Mr Metcalfe's representatives at the trial to seek to cross-examine witnesses with a view to establishing facts and matters which might be relevant to the Project Waltz proceedings but which are not relevant to the C Plan proceedings. This "mission creep" as Mr Simmonds describes it is not something which IBM signed up to pay for in the Consent Order.
36. Mr Tennet says that paragraph (b) must be more widely interpreted. He notes that, when the Consent Order was agreed, it was envisaged that the two actions would be heard together and, in practice I would add, therefore be run as a single action. All matters would have been aired in a single hearing. Mr Metcalfe has the same team of lawyers as the PW Defendants. No issue would ever have arisen about Mr Metcalfe's costs because Mr Tennet and Mr Stallworthy would have been present for the entire hearing in any case. The relevant witnesses would have been cross-examined about all aspects of both cases. He notes that the actions are not entirely separate. Although some of the evidence goes both to rectification in the C Plan proceedings and to the good faith issues in the Project Waltz proceedings there are matters relevant to the Project Waltz proceedings on which evidence could be given by witnesses called in the C Plan proceedings who might not be called in the Project Waltz proceedings. Reading paragraph (b) in the context of paragraph 5.1(iii) as a whole, and particular paragraph (a), it is suggested that Mr Metcalfe must be allowed take the steps he sees as appropriate in the C Plan proceedings in order to assist the PW Defendants in the Project Waltz proceedings.
37. As a matter of principle, I think that Mr Simmonds is right. But I also think that it is likely to prove enormously difficult in practice to draw the line between what is supplementing the Trustee's case in the C Plan proceedings and what is simply aimed at improving the PW Defendants' case in the Project Waltz proceedings. For instance, if Mr Tennet were to attend the trial of the C Plan proceedings and seek to elicit information from a witness which is simply irrelevant to anything which the Judge needed to decide in those proceedings, he could be stopped by the trial judge; but it seems to be impossible to make any sort of sensible direction at this stage of the proceedings which would identify the boundaries of permissible questioning.
38. However, what one can say, I think, is that the Trustee's team is of the highest quality. It comprises a relevantly expert leading counsel, as well as two specialist pensions juniors, instructed by a leading firm of solicitors in the pensions litigation field. It is almost inconceivable that any relevant stone will be left unturned. But that has been the case (save for the addition of one junior to the team) since before the date of the Consent Order. Notwithstanding that expertise, Mr Metcalfe was concerned, in the light of the considerable distrust of IBM and a perception that the Trustee might be anxious to protect, as it were, its own back; and in the light of those concerns, it was agreed that he should have his costs as set out in the Consent Order.
39. So what is the dispute really about? Given that the same legal team represent Mr Metcalfe and the PW Defendants, it is difficult to see how, with one exception, the totality of costs incurred by Mr Metcalfe and the PW Defendants will be affected whether Mr Simmonds is right or Mr Tennet is right about the meaning of paragraphs (a) and (b). The team, wearing its hat as lawyers to the PW Defendants, will need to be entirely on top of the C Plan proceedings. Apart from attendance at Court in the C Plan proceedings, the costs of the work which the team will need to carry out will, it seems to me, fall within one or other of the prospective costs orders in relation to each set of proceedings and therefore fall on the Scheme in any event. So long as the common legal representation continues, I see no reason to insist on a strict breakdown between the two matters since the Trustee has to pay the costs either way: to the extent that work falls within paragraphs (a) and (b), those costs are payable pursuant to the Consent Order and to the extent that they do not do so, they fall within the prospective order in favour of the PW Defendants. As a matter of fact, there is nothing, in any case, to suggest that there has been or will be any difficulty in establishing what costs have so far been incurred by Mr Metcalfe in carrying out his monitoring and supplement roles and I see no reason to qualify in any way the provisions of the Consent Order or make rulings about what can and cannot be done.
40. The difficulty really arises only in relation to representation at the trial of the C Plan proceedings. Who should be there? Should it be a very junior barrister with perhaps a trainee or a newly qualified solicitor? Should it be Mr Stallworthy and if so with what solicitor assistance if any? Should it be Mr Tennet and if so with or without Mr Stallworthy and other assistance? Mr Simmonds says it should be the first of those possibilities. He refers to the expertise of the Trustee's team and to the likelihood that no stone will be left unturned by them.
41. Mr Tennet says that I should make no direction. He says that he and his whole team are responsible people who will behave appropriately and proportionately. His position is that he cannot say, at this stage and in particular before preparation for trial is far further advanced than it is, what representation it will be appropriate for Mr Metcalfe to have. He acknowledges that if he does appear, he will need to justify to me, as the trial judge, why he is there. There is something in that point, but the sentiment is one which it is easier to articulate than to give effect to. What, asks Mr Simmonds, is to be done if Mr Tennet appears when, subsequently, it can be shown that his attendance was unnecessary judged by that elusive yardstick of proportionality?. The answer, in reality, is very little.
42. Mr Simmonds accepts – he has to once I have refused to discharge the costs order in the Consent Order – that Mr Metcalfe is entitled to some representation, but he wishes to restrict the order so as to have the smallest impact. But these factors need to be borne in mind:

a. First, if Mr Metcalfe is represented by a junior junior, cost will be incurred in him or her getting on top of the C Plan proceedings and, to a greater or lesser extent, the Project Waltz proceedings. As to the latter, the junior would not know how to fulfil the monitoring and assistance function unless he knew quite a bit about those proceedings. Mr Tennet and Mr Stallworthy are already on top of that. The junior's preparation is all the more important if he or she does not have the support of a solicitor already versed in the two actions.

b. Secondly, if only a junior is present, both Mr Tennet and Mr Stallworthy, as part of the legal team representing the PW Defendants, will need to know what has been happening in the C Plan proceedings. They will need to read the daily transcripts of the hearing and they will probably need to be briefed also by the junior about what has been happening.

c. Thirdly, Mr Metcalfe would, I suggest, feel justifiably aggrieved if his main function in relation to the C Plan proceedings, had to be carried out by a very junior barrister with little experience of major pensions litigation who would be very likely to be unable actually to intervene in the hearing before me even if he or she appreciated the significance of some point which was being raised. Further, if an occasion arose for a witness to be cross-examined on behalf of Mr Metcalfe, it must be right that a more senior person should be there to do it.

43. I have no doubt that Mr Metcalfe should be entitled to representation by Mr Stallworthy without Mr Tennet and have only very little doubt that he should be entitled to representation by Mr Tennet without Mr Stallworthy, in each case with an existing solicitor member of the legal team but of a junior level. I have more doubt that he should be entitled to representation by both of them. I am not, however, going to rule against attendance of two counsel, although, if both appear, I will want to know why. Clearly, the decision whether to brief two counsel ought to be made well in advance of the hearing. And before both are instructed, IBM should be informed of that intention and the reasons why. If IBM wishes to challenge the decision to instruct two counsel, it can come back to me on what I hope would be a short hearing.
44. If IBM still wishes to proceed with the application for a financial cap in the light of those rulings, I will hear submissions accordingly.