There are before the court, first, an appeal and, secondly, an application for permission to appeal in respect of case management decisions made by two judges of the Commercial Court in relation to a substantial trial which is fixed to begin two weeks on Monday, that is to say on 19 November, the estimate for the trial being, as I understand it, four or five weeks. The subject matter of the two appeals, as I will call them, are: firstly, an order made by Popplewell J in relation to security for costs (and I might add in relation to the security for the costs of a discrete part of the preparation for trial, not the whole preparation); and, secondly, an order made in July 2012 by Teare J consequent upon an application to amend pleadings made by the defendant, the effect of which was to convert what would have been the full trial into a split trial, or, as Mr Paul Downes QC, who has appeared for the defendant, has more accurately termed it, an order for a partial trial of liability. It goes without saying, and Mr Downes has very readily accepted, that the burden placed upon a party seeking to interfere, or seeking to persuade this court to interfere, with case management decisions made in such circumstances is a very considerable one and amounts to his being in a position to demonstrate that the judge on either occasion has really approached the matter on the basis of some serious error of principle.

In order to understand the nature of the applications, I should indicate very briefly what the trial is about. The first claimant carries on an asset management business; the second claimant is an investor; the third claimant is an investment vehicle for a private individual. The fourth claimant is also an investor, but, as I understand it, for present purposes we can ignore him. The defendant, IG Markets, is a financial services firm. The third party, the position of which has not featured in the argument before us, is a compliance consultancy. The claim brought by the claimants is to the effect that the defendant is liable as an accessory to what the claimants allege were breaches of trust committed by a now insolvent Scottish broker called Echelon Limited. It is the claimant’s case that, as clients of Echelon, they contracted with Echelon for Echelon to act as their agent in the placement of financial transactions and, in particular, Contracts for Differences (“CFDs”) with third parties.

What is alleged by the claimants is that, pursuant to Echelon’s Terms of Business, upon which they say they contracted with them, funds transferred by the claimants to Echelon for the purpose of trading in CFDs were to be held for the claimants’ benefit in segregated client accounts, save in very limited circumstances dealt with in the standard Terms and Conditions of the account, which broadly related to the transfer of moneys in one or other of the accounts in order to meet margin calls. The thrust of the allegation made by the claimants is that funds transferred by them to Echelon were not in fact kept segregated by Echelon but were transferred to unsegregated accounts held by Echelon with the defendant. What is alleged is that Echelon then, for its own account, as a principal, engaged in CFD trading with the defendant, even though (as it is alleged and I believe accepted) Echelon was not authorised by the Financial Services Authority to trade as a principal. Furthermore, in circumstances where the trading between Echelon and the defendant was carried out through a head account and several hundred sub-accounts, which were allocated by Echelon to its clients including the claimants, IG Markets, the defendant, enjoyed as against Echelon a general right of set-off in respect of any debit or credit balances on any of the sub-accounts.

It is the claimants’ case that they were unaware of the arrangements between Echelon and the defendant and that they believed that the funds that they had transferred to Echelon for CFD trading, and any profits generated by the trading, were held by Echelon on a segregated basis, except where their agreement permitted otherwise; for example, as I have indicated, in relation to the meeting of margin calls.

In particular, the claimants allege that they did not know that their funds were transferred to unsegregated accounts of the defendant or that they could be used to make up deficits on accounts held by or for other Echelon clients. The claimants contend that Echelon’s conduct in this regard amounted to a dishonest breach of trust or fiduciary duty and that the defendant, IG, is liable as an accessory in dishonest assistance and knowing receipt. There was some debate before us as to whether or not it is necessary for the claimants to go so far as to allege that Echelon’s conduct amounted to a dishonest breach of trust or fiduciary duty, but it is plainly unnecessary to go into that now.

The allegation against the defendant, putting it broadly, is that through certain named employees, one of whom has recently been dropped from the list of those alleged to have been responsible, the defendant wilfully turned a blind eye to the circumstance that Echelon was acting in breach of trust or fiduciary duty or, alternatively, that it had a clear suspicion that Echelon was so acting but nonetheless carried on regardless. Accordingly, the claimants claim damages for equitable compensation in the value of the credit balance of their sub-accounts at Echelon as at the time of Echelon’s collapse in October 2008.

Additionally, and this is one of the features of the case which has given rise to part of the debate before us, the first and third claimants claim losses over and above the value of the credit balance in their accounts with Echelon at the relevant time. They assert that, had those sums been made available to them at the appropriate time, they would have been in a position to earn trading profits on them and they have made a claim in respect of what they say are the lost trading profits, which they have calculated by reference to their actual returns since October 2008.

The defendant, IG Markets, has defended the claim by not admitting the allegations made by the claimants against Echelon, in respect of which it adopts the stance that it is not in a position to know what the nature of the arrangements agreed between them was. The defendant denies the allegations made against it and its own employees. It contends that it maintained the clients’ sub-accounts as a way of providing administrative support to Echelon and it believed that Echelon was trading with it as a principal at all times.

The third party was introduced in May 2012 on the basis that it is alleged by the defendant that the third party was a provider of compliance services to Echelon, and contribution under the Contribution Act is sought by the defendant against the third party in the event that it is held liable, on the basis that the third party is another party who has a liability to the claimants, thus providing the scope for a claim for contribution. The third party has taken no part in the argument before us, nor I think did it take any part in the argument on either occasion below, but its position is that it is ready and prepared for trial and it points to the prejudice that would be occasioned to it, were it to find that the trial is now to be adjourned.

The claim was begun in November 2010 and the defence was filed in February 2011. There was a case management conference in July 2011, and the trial was then fixed to take place in October 2012, but, as I understand it, it was in October 2011 that the trial was pushed back by a month, possibly a month-and-a-half, to 19 November 2012, with an estimate of four weeks. The trial has, therefore, been fixed to take place in either October or November, so now a period considerably in excess of one year.

On 11 June 2012 the defendant issued an application seeking the permission of the court to amend its Defence. The nature of the amendment is two-fold. Firstly, insofar as the claimants assert that they can recover trading profits over and above their headline losses, which they seek to justify by reference to their returns since October 2008, the defendant sought to introduce an amendment to assert that those profits have been achieved by unlawful insider trading, indeed by criminal conduct, and that, had it not been for the claimants indulging in criminal conduct, prohibited conduct of that sort, such returns would have been unsustainable. That, of course, pleaded as it is in the Defence, is a point that goes to the quantum of the claimants’ claim.

The amendment to which I have just referred is in paragraph 46 of the Re-amended Defence, where it is denied that the returns claimed in the Re-amended Particulars of Claim of 167 per cent are achievable on a continuing basis, or could have been achieved, had the first and third claimants had available to them the additional assets with which to trade. What is said is that the trading that was in fact carried out was carried out with the benefit of insider information and very considerable particulars are given of that allegation by reference to schedules setting out the trades which are alleged to have been conducted in that manner.

The second aspect of the amendment is more far-reaching in the sense that, at paragraph 47 of the Re-amended Defence, it is now sought to be said, and indeed the amendment has been permitted so that it is now the defendant’s case, that since the claimants are companies or individuals who engage as a matter of routine in unlawful insider trading, they are not to be regarded as parties who come to the court with clean hands and, insofar therefore as they seek (as they do) equitable remedies, those remedies should be denied to them by the court. As I have already indicated, the claimants seek equitable compensation for dishonest assistance and a declaration that the defendant is liable to account to the claimants on the grounds of either dishonest assistance or knowing receipt of assets transferred by Echelon in breach of trust. So the second of the amendments is something which goes to the entirety of the claim.

That amendment, as I have indicated, was sought by an application issued on 11 June 2012. The application came before Teare J on 6 July. As I understand it, it was not seriously in issue that the defendant should be allowed to make its amendment, which obviously contains an allegation extremely serious in nature as to the unlawful trading of the claimants, but the principal debate revolved around the question what was to be the impact of that application, if successful, on the trial fixed to take place only three or four months hence. The defendant, for its part, indicated that it was perfectly ready to proceed to trial, but the claimants, perhaps unsurprisingly faced with such serious and far-reaching allegations, indicated that they would not be in a position to give the appropriate discovery and to deal with those allegations within the timescale still available.

Teare J, in the exercise of his discretion, determined what one of the parties, I think, may have characterised as the least worst option, which was to direct that there should be what was described then as a split trial, and he directed that the trial date should be kept albeit the hearing should be extended by one week, that the question of the defendant’s liability in principle should be dealt with at that trial, but that the question of quantum and damages and the availability of the equitable remedies sought in the event that liability was proved should await a further trial. That is why Mr Downes characterises the result achieved, quite accurately, as a partial trial of liability, rather than the perhaps more traditional split trial of liability and quantum.

The judge was faced with a real dilemma, and the submissions that were made to him by Mr Downes were in essence the same submissions that Mr Downes has repeated today. The judge refers to these arguments at paragraph 8 of his judgment, where he says this:

At paragraph 12 the judge referred to the fact that the defendant has alleged no positive case against the claimants’ case on their relationship with the broker, Echelon. What he was referring to there was the central allegations which are made by the claimants in relation to their trading with Echelon. By way of example, at paragraph 28 of the Points of Claim, it is alleged that Echelon concealed from the claimants the circumstance that their trading with IG Markets involved the use by Echelon of the claimants’ money to support transactions for its other clients and the set-off arrangement to which I have already referred. What is said at paragraph 28 of the Points of Claim is that that was concealed by Echelon from the claimants. At paragraph 34 of the Defence, one finds simply this:

Mr Downes has submitted that it is in the nature of things that the defendant cannot know the full details of the relationship between the claimants and Echelon and that, insofar as the claimants wish to assert that the trading arrangements involved the keeping of moneys in segregated accounts and that they had no knowledge that the moneys were being used in a different way, that is a matter which the plaintiffs are required to prove at trial. And he says, further, that that is a matter in respect of which he will wish to cross-examine the claimants’ witnesses, in relation to which it may be, he suggests, at the end of the day that the question whether or not they are generally witnesses who are to be believed may be of some significance to the judge’s evaluation of their evidence. He submits that, as a result of the claimants not having yet been required to give full disclosure in relation to the insider trading allegation and as a result of the full investigation of those matters having been hived off to the second trial, he will be seriously handicapped in the extent to which he can suggest that disreputable behaviour by the claimants in that regard has a bearing on the extent to which they are to be believed and therefore to the evaluation of any evidence they may give as to the nature of their arrangements with Echelon.

The judge of course, as appears from paragraphs 12 and 13 of his judgment, had that point very well in mind. He said that one can only speculate as to the extent, if any, to which there is scope for cross-examination of the claimant’s witnesses as to credit. What he had in mind there, as it seems to me, is that the nature of the terms on which the claimants traded with Echelon was to a large extent something which would prove itself from the documents and, in particular, from Echelon’s trading Terms and Conditions, which form in any event a part of the case pleaded by the claimants. Indeed, one finds in paragraph 10 of the Particulars of Claim that Echelon’s Terms of Business are set out in extenso and, in particular, those parts of the terms which deal with the circumstances in which moneys might be transferred out of a client account to another account for the purpose of meeting margin calls. Mr Downes suggests that the written documents may not tell the full story and that there will be an issue as to the extent to which the claimants were aware of the extent to which their funds were not being held in segregated accounts, in respect of which it is unsatisfactory that there may be the prospect that, at a subsequent trial, it will be shown that the claimants are persons who have indulged in criminal activity. He points to the possibility that the judge at the first trial may conclude that the claimants are to be believed when they assert that they were unaware what Echelon was doing and that the judge at the conclusion of the second trial may conclude that the claimants’ witnesses were dishonest persons whose evidence was to be treated, therefore, with caution when giving their account of the relationship between themselves and Echelon.

The error of principle which Mr Downes identifies, and which he asserts invalidates the exercise by the judge of his discretion, is that the order made by the judge for the partial trial of liability “countenances an indivisible issue being the subject of investigation at both stages of the trial but with different material available at each stage on which to conduct the investigation without having concluded that this can be done without injustice to the defendant.” The indivisible issue to which Mr Downes there refers is the question of insider trading. Mr Downes accepts that, at the first stage of the trial, as it is presently constituted, insider trading will be simply a collateral issue which goes only to the credit of the claimants’ witnesses. Nonetheless, he submits that this is an unusual case in which the court knows that this presently collateral issue will have to be determined as a principal issue at a subsequent stage of the trial and it is therefore, he submits, to put it no higher, unsatisfactory (indeed the word he suggests is “unpalatable”) that the court should countenance the possibility that it might reach conclusions at the first trial which are uninformed by the full investigation of the matters which are in due course to be looked into in the second trial.

The way in which Mr Downes put it this morning is a slight refinement of the manner in which he had hitherto suggested the matter should be looked at. His submission, in writing at any event, was that the judge should not have ordered a split trial unless satisfied that there was no realistic prospect of the claimants’ credibility being relevant at the first liability stage of the trial. As was pointed out to Mr Downes in the course of the argument this morning, it could be said that in some senses the defendant is actually in a better position in relation to its ability to cross-examine the claimants’ witnesses as to credit than might be the case in the usual run of cases, because there is in play, as a result of the claim to recover enhanced profits and the riposte of insider dealing, a considerable body of material on the basis of which the defendant will be in a position to assert that the claimants have indulged in unlawful activity with the result that they are not to be believed in what they say about their relationship with Echelon. In the ordinary way, were that material not already available and relevant to an issue to be determined between the parties, the extent to which a party would be permitted to cross-examine on matters which merely go to the credit of a witness would be somewhat limited. Mr Downes acknowledges that that is so, but points to the fact that this is, as he would suggest, an exceptional case. And it is the very circumstance that the defendant does here have material upon the basis of which it will be able to assert that the claimants are, as he puts it, a criminal organisation, which leads to the conclusion that it is unsatisfactory that the court should embark upon an investigation of the relationship between the claimants and Echelon without at the same time embarking upon the broader investigation.

Those matters, as I have indicated, are matters which the judge had well in mind; not only at paragraph 12 but also in paragraph 13 of his judgment, the judge considered that the risk of the court reaching inconsistent decisions was much reduced because of his conclusion that the credibility of the claimants or their witnesses was not at present shown to be of major importance in relation to the establishment of the trading relationship between the claimants and Echelon.

I fully understand the points that Mr Downes has made and I understand why he asserts that the position is, from the point of view of his clients, unsatisfactory. But the fact remains that the judge was faced with an awkward dilemma in circumstances in which the defendant had come forward, only a matter of two or three months before trial, with an amendment which put forward a very serious allegation against the claimants without, however, the defendant being in any position to allege that it had any direct or positive impact on its case, so far as concerned the claimants’ relationship with Echelon. The judge thought that the risk of the court reaching inconsistent decisions was reduced and that the question of the credit of the claimant’s witnesses was not something which was likely to loom large at the first stage of the enquiry. On the basis of the pleaded case, I can understand why the judge reached those conclusions, and indeed they are conclusions which I think it was likely I would myself have reached.

Whether, in those circumstances, to take the serious step of adjourning the trial which had been fixed until the entire matter could be re-heard, which would inevitably involve a delay of more than a year, was a matter in relation to which the judge had to exercise his discretion in the case management context. Inevitably, not all judges will necessarily in such circumstances reach the same conclusion, but the question, as is well-known, is whether the decision reached by the judge was within the ambit of reasonable decision-making or whether it can be shown to be so vitiated by an error of principle in the approach that it ought to be revisited by this court.

As recently as 3 October, this court, differently constituted, although containing Munby and Lewison LJJ, has reiterated the importance of the Court of Appeal supporting first-instance judges who make robust but fair case management decisions, that being a quotation from Lord Justice Jackson’s report on costs, which was picked up and approved by Lewison LJ when giving judgment in Deripaska v Cherney [2012] EWCA Civ 1235, an observation with which Munby LJ expressly associated himself. In my judgment it is not demonstrated that the judge, in reaching the conclusion he did, erred in principle or reached a conclusion which was outside the ambit of reasonable decision-making. As Mr Downes has himself suggested, it was an unusual if not exceptional case, but it was nonetheless a case in relation to which the judge had simply to determine what was the just and convenient outcome or, to put it another way, what was the least unjust and inconvenient outcome in the circumstances.

I accept that, had the judge not had regard to the possible risks involved in adopting the course which he did, then there might of course have been scope to interfere with the exercise of his discretion. But, as it is, the judge as I see it had the points well in mind and considered what was the risk involved and considered that it was a small one and, furthermore, that in the circumstances the least unjust and inconvenient course was to maintain the trial date but to split the issues, which he did. In my judgment, that is an exercise of discretion in the case management context with which, quintessentially, we should not interfere. It follows that, in relation to the application which is before us in relation to that decision, I would refuse permission to appeal.

The second matter which is before us is an appeal, brought with leave of Sir Scott Baker, in relation to security for costs. The background to this is that in July 2011 an application was made for security for costs to David Steel J and at that stage the estimate of all the costs that would be incurred up to the completion of disclosure was £533,500, which included as part of it an estimate as to the costs of the disclosure exercise itself, which had not then started. It was, I think, of the order of £280,000. David Steel J on that occasion ordered that security for costs should be given by the claimants in the sum of £320,000, which as it happens is 60 per cent of the amount that was then being sought, as being the appropriate amount to be given up until the completion of disclosure. [I am conscious that some of the figures in this paragraph may not be accurate, but nothing turns on that.]

The disclosure exercise which had to be conducted by the defendant proved unexpectedly complex and costly and the upshot was that on 25 May 2012 the defendant returned to the Commercial Court and, at a hearing before Popplewell J, sought further security in relation to the costs of the disclosure exercise. What was asserted on that occasion was that the exercise had cost £725,000 more than it had been estimated would be the cost when the matter was before David Steel J. The additional costs, as I will call them, of £725,000 represented both costs already incurred and an estimate as to the future costs of the disclosure exercise.

Mr Downes, for the defendant, sought an order for security for costs in the sum of £580,000, that being 80 per cent of the additional costs both actually incurred and expected to be incurred. Mr Downes sought to justify that figure of 80 per cent of the amount, as I understand it, in two ways. Firstly, although there is no reference to this in the judge’s judgment, there was deployed before him, in the shape of an exhibit to a witness statement of the defendant’s solicitor, an email from a gentleman who I understand to be a costs draftsman, who gave it as his opinion that in general, on detailed assessment, the defendant’s solicitors should not expect to see a greater reduction than 20 per cent where the assessment was being conducted on the standard basis. Very sensibly, Mr Downes has not suggested before us that the introduction of evidence of that sort as to that particular costs draftsman’s general view is to be taken as establishing some form of yardstick by reference to which the quantum of security for costs orders should be determined. I put that matter, therefore, to one side.

The more substantial ground upon which Mr Downes sought to justify an order for 80 per cent of the additional costs being made in his client’s favour was on the basis, as he asserted, that this was a case in which there was a real prospect that his clients would, at the end of the day, if successful, be awarded indemnity costs. He pointed to the circumstance that this is a case in which the claimants make serious allegations of dishonest conduct on the part of professional men, allegations which can have the outcome of ruining careers, and that in such circumstances, if such allegations were not made out, the judge might feel it appropriate to make an order for indemnity costs against the claimants. The judge rejected that argument. At paragraph 31 of his judgment, the judge said this:

The judge turned next to the question what amount should be required to be secured of the £725,000 by way of additional costs. Before indicating what he said about that, I should emphasise that the principal issue with which the judge was concerned, on this contested application for security for costs, was not in fact the quantum of the order he should make but whether or not there had been a sufficient change in circumstances as to justify the defendant seeking to revisit the order which had already been made in its favour and which had been intended to secure its costs until the end of the disclosure exercise.

But in relation to the quantum of the order which he should make, the judge had to have regard to the well-known circumstance that a party’s bill of costs prepared as between solicitor and client is most unlikely to be recoverable in full on a detailed assessment. So the judge was faced with the usual debate as to whether or not the bill put forward by the defendant in relation to the disclosure exercise could be said to be reasonable and proportionate. The judge dealt with these matters at paragraphs 32 and 33 of his judgment. At paragraph 32 of his judgment, he rejected a criticism put forward by Mr Jonathan Nash QC for the claimants to the effect that too high a proportion of the work had been done by the partner at the defendant’s solicitors, who of course had a higher charging rate than the assistant solicitors. The judge rejected that allegation. He thought that in a case in which serious allegations or allegations of this sort were made, it was entirely appropriate, or at any rate not inappropriate, for the partner to be heavily involved. But the judge then continued at paragraph 33:

So that was the order which the judge made. As it happens, £450,000 is 62.07 per cent of £725,000. Whether the judge realised that the figure upon which he had alighted was 62 per cent or that it was close to the percentage which David Steel J had ordered on an earlier occasion, I have no idea. It seems to me that what the judge conducted was a familiar broad-brush approach as to how much of the bill seemed likely to survive detailed assessment.

The appeal is brought on the basis that the judge erred in the manner in which he approached the exercise because, it is said, he discounted the headline figure sought without taking into account that, on an exercise of this sort, the balance of prejudice, as it is sometimes called, is ordinarily in favour of the defendant rather than the claimant. This point arises because, as is well-known, in the usual run of cases the prejudice which will accrue to a defendant in the event that he is under-secured is likely to outweigh the prejudice which will accrue to a claimant in the event that he is required to put up an amount of security for costs which proves to have been an over-estimate of the amount recoverable by the defendant. That is for the obvious reason that, in the paradigm case where an order for security for costs is made, the under-secured defendant will be unable to recover the balance of the costs which is unsecured, whereas the claimant will bear only the additional cost of having put up the security in a greater amount than was appropriate.

At an early stage in his judgment, the judge referred to this balance of prejudice and to the fact that he regarded the case as a case in which it would be appropriate for an undertaking to be given by the defendant in accordance with the undertaking referred to in paragraph 5 of Appendix 16 of the Commercial Court Guide, which is an undertaking which may be given in certain circumstances, or may be required to be given in certain circumstances, by an applicant for security for costs to the effect that he will comply with any order that the court may make if the court later finds that the order for security for costs has caused a loss to be suffered by the party required to put up security, in circumstances where the court considers that the claimant or the party putting up security should be compensated for that loss. As the judge indicated, and as the Commercial Court Guide itself indicates, such undertakings are intended to compensate claimants in cases where no order for costs is ultimately made in favour of the applicant.

The judge, in the course of argument, asked Mr Downes whether he had instructions to give such an undertaking, and Mr Downes indicated that he did not and that no such indication would be forthcoming. The judge refers to this in paragraphs 10, 11 and 12 of his judgment and concludes at paragraph 12:

It so happens that counsel for the claimants, Mr Jonathan Nash, had not suggested to the judge that this was a case in which such an undertaking ought to be given. Furthermore, Mr Downes suggests that the judge had in fact fallen into error in concluding that the claimants were parties who might be in a position to say that the cost to them of paying money into court by way of security would be greater than the mere loss of interest on it because of the superior returns which they could achieve. So it is said that the judge was wrong to come to the conclusion that the balance of prejudice was not in this case, as it ordinarily would be, one which tipped in favour of the defendant. Mr Downes also points to the fact that, in the course of argument, the judge had indicated that the question whether or not such an undertaking might be given might be relevant to the quantum of any order that might be made by way of security for costs.

Founding on that indication in the course of the argument, and bearing in mind the circumstance that the judge thought it appropriate to indicate at the early part of his judgment that it was not a case in which the balance of prejudice tipped in favour of the defendant, the submission now made by Mr Downes is that the judge plainly fell into error in that he submits that what the judge has done when it came to evaluating the quantum of security is to have failed to give, as he should have done, the benefit of the doubt to the defendant because he considered that it was a case in which, unusually, the balance of prejudice did not tip in favour of the defendant. Mr Downes suggests that the inference is clear that, had the judge not approached the matter in that way, he would have made an order for security for costs which amounted to 80 per cent of the additional costs, which would therefore have been an order for payment of £580,000 rather than the £450,000 which the judge in fact ordered.

The difficulty with that argument, as I see it, is that I cannot detect any matters in doubt which the judge would have resolved differently had he been resolving doubts in favour of the defendant. When a judge looks at a bill of costs, and determines on a provisional basis that it will not be recoverable in full, he is not, as it seems to me, resolving a doubt; he is simply adopting a broad brush approach to what is necessarily a very imprecise exercise. Here, the judge identified at paragraph 33 certain criticisms of the scale of expenditure, which suggested to him, drawing on his experience, that the costs claimed, actual and estimated, were not reasonable and proportionate and he concluded that the appropriate amount of security was not £580,000 but rather £450,000.

I cannot, for my part, understand on what basis it is suggested that he would have ordered a greater figure had he not concluded that the balance of prejudice did not favour the defendant. As it seems to me, the judge had no need to resort to any predisposition in favour of one party or the other in reaching the conclusion that the costs were, as he thought, overstated in terms of what was likely to be recoverable.

Mr Downes has submitted that, insofar as the judge indicated at paragraph 33 that he had taken “all those matters into account”, it must be inferred that one of the matters he took into account was the circumstance, as he had already indicated, that it was not a case where the balance of prejudice was tipped in favour of the defendant. I can draw no such inference. Furthermore, although the judge had indicated in argument that the question whether or not an undertaking was given might be relevant to quantum, there is in my judgment nothing to be found in his process of reasoning which indicates that in the event he did consider that that consideration was relevant.

Furthermore, I cannot for my part understand on what basis it is contended that the judge would necessarily have ordered security in the sum of £580,000, or 80 per cent of that sought, had he thought that the balance of prejudice did favour the defendant, as would ordinarily be the case. The only basis for seeking 80 per cent of the estimate to which the judge referred in his judgment was the suggestion that the defendant might recover indemnity costs. For what it is worth, I have never heard of security for costs being awarded on a more generous basis for that reason, but in any event the judge here decisively rejected that suggestion at paragraph 31 of his judgment. He concluded that there was no material before him which would justify such an approach. Rightly, as I think, he declined to go into the merits of the case when considering what was the appropriate quantum of an order for security for costs, and in my judgment we should certainly not go down the path which the judge himself declined to tread. The only other basis upon which it could be asserted that the judge would have alighted on a figure of 80 per cent is the opinion of the costs draftsman, to which I have already referred and to which very little weight can be given.

An order of this sort in relation to the quantum of an order for security for costs is, as Rix LJ indicated when refusing permission to appeal on the papers, quintessentially a matter of case management, which is to be dealt with by the judge or the Master in the exercise of his discretion. Unless it can be shown that there has been some serious error of principle, this court should be very slow indeed to interfere with an order of that sort.

I would dismiss the appeal.

I hope that one of the take-home messages of this case is that this court has yet again endorsed Jackson LJ’s observation that it is vital that the Court of Appeal supports first-instance judges who make robust but fair case management decisions. I agree that, for the reasons given by Tomlinson LJ, permission to appeal against the order of Teare J should be refused and the appeal against the order of Popplewell J should be dismissed.

I also agree. At the risk of repetition, as my Lords have mentioned, very recently Lewison LJ and I have emphasised the importance of this court supporting first-instance judges who make robust but fair case management decisions: see Deripaska v Cherney [2012] EWCA Civ 1235, paragraphs 17 and 30. Of course, as Mr Downes was properly at pains to point out, this court must intervene where it is proper to do so. However, in the case of appeals from case management decisions, the circumstances in which this court can interfere are limited. In summary, in such a case this court should interfere only if satisfied that the judge erred in principle, took into account irrelevant matters or was otherwise plainly wrong: see Royal and Sun Alliance v T&N Limited [2002] EWCA Civ 1964, paragraphs 37 and 38, and Walbrook Trustee (Jersey) Limited v Fattal [2008] EWCA Civ 427, paragraph 33. In evaluating whether an appellant meets that high threshold, this court must have regard to, and must loyally apply, the principles laid down by Lord Hoffmann, speaking for a unanimous House of Lords, in Piglowska v Piglowski [1999] 1 WLR 1360.

In the circumstances, and for the reasons explained by Tomlinson LJ, Mr Downes, despite everything he has so attractively pressed upon us, singularly fails to meet the high threshold in his attack on either of these judgments. Accordingly, the appeal from the decision of Popplewell J stands dismissed, and the application for permission to appeal from the judgment of Teare J must be refused.