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The New Lottery Company Limited and Northern & Shell PLC v The Gambling Commission
[2026] EWHC 1311 (TCC) | High Court of Justice, Technology and Construction Court
Before Mrs Justice Joanna Smith DBE | Heard 22 May 2026 | Handed down 22 May 2026
Interactive Process Flow | Indemnity costs after dismissal of National Lottery procurement claims
Case Analysis Process Flow
0 of 7 nodes explored
1. Case Overview
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Case: The New Lottery Company Limited and Northern & Shell PLC v The Gambling Commission [2026] EWHC 1311 (TCC)
Court: High Court of Justice, Technology and Construction Court
Judge: Mrs Justice Joanna Smith DBE
Hearing Date: 22 May 2026
Judgment Date: 22 May 2026
Case No: HT-2022-000132 and HT-2024-000035

After the Process Claim and Modifications Claim concerning the Fourth National Lottery licence were dismissed, the claimants accepted liability for the Gambling Commission's and interested parties' costs on the standard basis. The winners sought indemnity costs for the whole proceedings; the claimants sought to confine indemnity costs and reduce the Commission's recovery for disclosure issues (paragraphs 1-6 and 21-28).

Central Legal Test: Indemnity costs required conduct taking the case out of the norm, judged factually by unreasonableness to a high degree. The court could aggregate factors. Any issue-based departure from the ordinary costs rule also required a fair evidential and procedural basis (paragraphs 3-4 and 21-27).
Consequentials Hearing
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The court gave short reasons on indemnity costs and the proposed reduction at the post-judgment hearing (paragraph 1).
Scale of Case
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The claims sought more than £1 billion and ineffectiveness relief capable of disrupting the National Lottery, demanding focused and responsible conduct (paragraph 7).
2. Procedural History
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Accepted Standard Costs
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The claimants accepted that they had to pay the Commission's and interested parties' costs, but disputed the basis and extent (paragraph 2).
Late Reduction Request
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The disclosure-based reduction was raised only four days before the hearing, on thin evidence, and increased from 7.3% to 20% without adequate explanation (paragraphs 22-25).
3. Defendant's Position
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The Commission and interested parties said the claims were pleaded and conducted in a shifting, unfocused and speculative way that forced them to meet broad cases later abandoned or changed (paragraphs 6-19).

Whole-case Conduct
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They relied on inadequate pleadings, abandoned issues, unpleaded allegations, disruption and weak causation evidence throughout both claims.
No Costs Reduction
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The Commission said the late disclosure complaint lacked evidence and notice, and existing disclosure-cost orders and privileged-document costs were already excluded.
4. Claimant's Position
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The claimants accepted some indemnity-cost exposure but argued for standard costs on the Modifications Claim and earlier Process Claim stages, and sought a reduction to Commission costs for its disclosure exercise (paragraphs 5 and 21-25).

Temporal and Issue Split
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They proposed indemnity costs only for trial or from the pre-trial review in the Process Claim.
Disclosure and Proportionality
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They said disclosure increased all parties' costs and relied on the size and proportionality of the winners' bills (paragraphs 20-25).
5. Court's Analysis
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Conduct Out of the Norm
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The pleadings, fluctuation, abandonment, evidential weakness and prejudice were highly unreasonable individually and cumulatively (paragraphs 7-19).
No Salami Slicing
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The trial conduct flowed from how both proceedings had been framed and pursued from the start, so indemnity costs applied throughout (paragraphs 18-19).
Proportionality Did Not Defeat Indemnity Basis
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A party whose conduct warranted indemnity costs could not use proportionality of the opponent's bill to avoid that order; quantum remained for assessment (paragraph 20).
No Disclosure Reduction
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The late application was inadequately evidenced and unfair to the Commission. Ordinary disclosure difficulties in litigation of this scale did not justify departure from the general rule (paragraphs 21-27).
6. Decision and Outcome
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Winner: The Defendant and Interested Parties (The Gambling Commission, Allwyn parties and Camelot UK Lotteries Limited) succeeded.

Result: The claimants were ordered to pay the Commission's and interested parties' costs on the indemnity basis for the entire Process and Modifications proceedings. No percentage reduction was made to the Commission's costs (paragraphs 19, 23 and 27-28). The Claimants (The New Lottery Company Limited and Northern & Shell PLC) did not succeed on this application.

Practical Effect: The winners recovered on the more favourable indemnity basis across the whole litigation, subject to assessment. The claimants could not reduce the Commission's bill through their late disclosure application.
Indemnity Basis
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Applied to the entirety of both proceedings (paragraph 19).
No Reduction
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The Commission retained entitlement to all recoverable costs without the requested percentage deduction (paragraphs 23-27).
7. Key Legal Principles and Practice Points
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High Unreasonableness
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Conduct need not be dishonest, but must be unreasonable to a high degree and outside the norm.
Aggregated Conduct
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Pleading, evidence, abandonment and trial conduct may be assessed cumulatively across the life of a case.
Costs Applications
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A material issue-based reduction should be raised promptly with evidence and fair notice, not introduced at a consequentials hearing.
Practice Implications
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For Claimants:
Stabilise pleaded procurement allegations, causal counterfactuals and evidence early. Withdraw untenable points before opponents incur trial preparation costs.
For Defendants:
Keep a chronology of shifting allegations, abandoned issues and wasted preparation. Exclude already-resolved costs transparently when seeking indemnity recovery.
General Practice Points:
The basis of costs can reflect conduct across the full proceedings where later trial disorder is the product of defective case formulation from the outset.
Legal Disclaimer
This interactive process flow is provided for educational and professional development purposes only and does not constitute legal advice. The content reflects interpretations and analyses that may not apply to specific circumstances. Contract interpretation depends on specific wording, jurisdiction, and factual context. Always consult qualified legal professionals before making decisions based on this content. SCCSI and its contributors accept no liability for reliance on this material.
This is a module from the Society of Construction Claims Specialists International's Construction Claims and Contracts Certification Programmes.
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