Various Claimants v Mercedes-Benz Group AG: High Court reins in claimants' costs in landmark Pan NOx litigation

The High Court has handed down a significant costs management judgement in the sprawling Pan NOx emissions litigation, slashing the claimants' budgeted costs across multiple expert disciplines and setting firm limits on ADR spending in what has become one of the most complex pieces of group litigation before the English courts.

Mr Justice Constable and Senior Costs Judge Rowley delivered the judgement on 4 June 2026 following a third costs management hearing held in April, at which representatives of 13 Group Litigation Orders appeared before the court. The ruling addressed two phases left unresolved from the second costs management hearing in July 2025: the experts' phase of Tranche 3 and the ADR and settlement discussions phase of the Second General Budget.

The court's patience with the claimants' approach to costs budgeting was plainly exhausted. Echoing criticisms levelled at earlier hearings, the judgement noted that reassurances from claimants' counsel that previous strictures had been absorbed had not translated into materially reduced figures. Counsel for the claimants, Theo Barclay, acknowledged at the hearing that claimed counsel time in the experts' phase could not be justified, yet the court observed that no realistic revised figures had been put forward before the hearing began.

The most pointed criticism concerned what the court described as a "1:1:1" ratio between solicitors' profit costs, counsel's fees and experts' fees across several disciplines. The judgement was unambiguous: it ought not to be the case that combined legal fees approach twice the amount of the expert fees required to produce necessary evidence. Where the claimants had sought to address this by suppressing the profit costs figure to match the other two elements, the court found this explanation unreassuring and the underlying ratio no less inappropriate.

Applying a working principle that combined legal costs should not exceed double the expert fees, the court made substantial reductions across all five expert disciplines. In loss assessment, the defendants' offer of £1,267,500 was accepted in full. For mechanical engineering, the Mercedes budget was allowed broadly as claimed at £718,681.65, while the remaining ALGLO defendants received more modest sums, with Nissan and Renault together allowed £600,000 and Ford and Peugeot-Citroen each allowed £340,000. The claimants' software engineering budget was reduced to £125,000 per ALGLO (£250,000 for Nissan and Renault), reflecting the court's view that the removal of formal individual reports warranted a proportionately greater reduction in counsel input. Consumer behaviour evidence was allowed at £1 million at the Lead and ALGLO level, and UK vehicle valuation and pricing was capped at the defendants' offer of £400,000, the court concluding that the managing judge had intended only a narrow facility to counter defendants' in-house expertise. The total allowed for the claimants' Tranche 3 experts' phase was £5,411,181.65.

On ADR and settlement, the claimants had dramatically reduced their claim from the £11 million flagged at the second costs management hearing to just under £2 million. The court nonetheless made further reductions, allowing £1,625,436 in total. In doing so, it declined to endorse what it characterised as the claimants' approach of effectively agreeing whatever defendants said they required in order to encourage ADR participation. It noted that any settlement discussions were unlikely to gain traction before a formal PDD judgement and would necessarily be constrained once the quantum trial commenced in October 2026.

The defendants' ADR budgets were approved as presented, totalling £1,687,074.55.

The judgement arrives as the Pan NOx litigation enters a critical phase, with the PDD liability judgement expected in July and the quantum trial listed to begin in October 2026. The court's consistent message across three costs management hearings has been that the layers of claimant representation and the extent of legal input into expert evidence production remain difficult to justify on proportionality grounds.

Various Claimants v Mercedes-Benz Group AG & Ors [2026] EWHC 1335 (KB)