Francesco Corallo & Ors v Giuseppe Pinelli & Ors

I Introduction

1. On 8 December 2025, I gave judgment (under neutral citation [2025] EWHC 3211 (Ch) ) on an application by the Claimants for injunctive relief. I now have to consider the consequential matters arising from that judgment which are (i) costs and (ii) whether the Claimants should give cross-undertakings in respect of the undertakings which I accepted from the Defendants (as explained in paragraphs 78-81 of the main judgment). I use the same defined terms here as I used in the main judgment.

2. The parties agreed that these consequential matters should be dealt with on paper without a hearing and, for that purpose, served written submissions which I have considered. This short judgment sets out the conclusions which I have reached on costs and the Claimants’ undertakings. Costs

3. There is no dispute between the parties about the principles which I should apply in relation to costs. The Court has a discretion as to costs but the general rule, set out in CPR r..44.2(2)(a), is that, if the Court decides to make an order for costs, it will order the unsuccessful party to pay the successful party’s costs. However, the Court can depart from the usual rule and, in deciding what order (if any) to make, the Court will have regard to all of the circumstances including those set out in CPR 44.2(4).

4. The Defendants submit that Mr Pinelli was plainly the successful party and that the general rule should be applied with the Defendants’ costs being assessed summarily in the amount of £44,198 (that being the total amount set out in the Defendants’ updated Statement of Costs).

5. The Claimants accept that Mr Pinelli was a successful party in that he resisted the Claimants’ application for a freezing order which was the matter which occupied the majority of the evidence and the time at the hearing. However, they say that I should nonetheless depart from the general rule by (a) reducing the proportion of the Defendants’ recoverable costs and (b) ordering Mr Pinelli to pay on the indemnity basis the costs of and occasioned by an affidavit served by the Claimants, referred to as Troiani 1. The costs of Troiani 1 are quantified at £14,336 (plus VAT).

6. Dealing first with liability for costs, the Claimants make three points.

7. First, on Troiani 1, they say that this affidavit was necessitated by Mr Pinelli’s late claim to be insured but this point was not then relied on by him at the hearing (as referred to in paragraph 58.5 of the main judgment). Moreover, they say that Mr Pinelli’s reliance on the fact that he was insured as a reason to refuse to order injunctive relief was wrong and that, but for the evidence of Ms Troiani, the Court could have been under a misapprehension as to the insurance position. They say further that Mr Pinelli must have been aware of (or, at best, was reckless as to) the scope and restrictions on his indemnity cover which were referred to in Ms Troiani’s affidavit. As a result, the Claimants say that I should make what would be, in effect, an issue-based costs order on this specific part of the proceedings.

8. Second, they say that the hearing before me was lengthened from half a day to one day because Mr Pinelli argued that there was not even a good arguable case against him but this aspect of his case (which took up time at the hearing) was rejected in the main judgment. As a consequence, the Claimants say, in their first set of written submissions, that Mr Pinelli should not be entitled to his costs of this aspect of the dispute which accounts for half of the work done. In their second set of written submissions, the Claimants contend for an evaluative reduction that reflects the Defendants’ choice to run and lose a substantial threshold issue.

9. Third, they say that Mr Pinelli’s conduct to which I should have regard includes his admission that he was in breach of an undertaking given to the Claimants in 2024. As I referred to in the substantive judgment (at [66]), Mr Pinelli had, shortly before the hearing before me, disclosed assets which he had not referred to in 2024 when he undertook voluntarily to identify his assets to the Claimants. This breach was characterised by the Claimants as being neither trivial nor technical and was only corrected when the Claimants made their application for injunctive relief. The Claimants say that I should mark the Court’s disapproval of this conduct by reducing the costs which the Defendants can recover.

10. Having considered carefully the submissions made by the parties, I have concluded that, as Mr Pinelli successfully resisted the making of a freezing order against him (and that was the issue which occupied the vast majority of the evidence and the time at the hearing), the Defendants were the successful parties and the general rule should be applied. I further consider that I should make one costs order rather than a discrete order in respect of the insurance position and a more general order in relation to the rest of the costs. However, the Defendants shall only be entitled to recover 75% of their costs, the deduction of 25% being principally to reflect the abandonment of by Mr Pinelli of reliance on his insurance position but also the failure of the Defendants on the threshold issue of “good arguable case” and the non-disclosure of assets in 2024. My reasons for these conclusions are set out below.

11. As regards the fact that Mr Pinelli failed to persuade me that there was no good arguable case against him, I accept the general proposition advanced by the Defendants that a successful party is not to be deprived of some part of its costs simply because it is not successful on all of the points on which it relies.

12. Further and in any event, I do not agree with the Claimants that the “good arguable case” issue can be separated from the risk of dissipation and the balance of convenience so as to justify a substantial deduction because that first issue was lost. Even if the argument had been confined to the other two issues, it would have been necessary to consider in some detail the nature of the claims advanced by the Claimants and (in general terms) their merits in order to identify, in particular, whether the nature of those claims supported the existence of a risk of dissipation and whether the quantum of the claims justified a freezing order in the full amount claimed given that there was already a voluntary undertaking in place. It seems to me therefore, that whether or not the merits threshold had been in issue, the hearing would very likely have taken the same course and lasted for most, if not all, of the day which was allowed. I do not think that even a hearing concerned only with risk of dissipation and justice and convenience could realistically have been dealt with in half a day.

13. However, it is important that parties to freezing order applications are realistic about the points which they take in opposition to such orders given that the threshold for a good arguable case is a low one and the hearing cannot be used for a mini-trial of the detailed merits of the proceedings. Mr Pinelli nonetheless advanced an attack on each of the wide range of claims made against him but did not succeed. Indeed, as I referred to in paragraphs [48]-[49] of the main judgment, it was not necessary for me to get into the detail of these claims as I had concluded that there was a good arguable case on the main building blocks of the case. It is therefore appropriate for me to make a modest deduction to the costs which the Defendants can recover to reflect the failed nature of the challenge to the existence of a good arguable case.

14. Turning to the insurance point, I accept that the way in which the Defendants raised but then abandoned reliance on Mr Pinelli being insured is a matter which should be taken into account in relation to costs. The point was raised in evidence for the first time on 31 October 2025 (shortly before the hearing on 6 November 2025) when Mr Pinelli asserted that he had “ professional indemnity insurance both in the UK and Italy that would cover the claim” and exhibited what he said were the relevant policies. These documents were in Italian without translations and ran to 58 pages. The Claimants then produced Troiani 1 in short order (on 3 November 2025) and took issue with Mr Pinelli’s assertion. It appears to have been this evidence which caused Mr Pinelli to decide not to rely on the insurance point. I agree with the Claimants that it was not appropriate for Mr Pinelli to put untranslated documents of such importance before the Court on short notice, particularly where there appear to be significant questions as to what is shown by those documents.

15. However, I don’t agree with the Claimants that I can conclude on the materials which I have that Mr Pinelli was either seeking to mislead the Court or was reckless as to the scope of his insurance cover. As the point was not relied on at the hearing, I did not hear submissions in any detail on the insurance documents or on Troiani 1. Equally, I do not consider that Mr Pinelli can fairly be criticised now for not having clarified the insurance position since the hearing. Having succeeded in opposing the application without reliance on the insurance point, it would not be just or proportionate to expect Mr Pinelli to incur further costs now so that the position on insurance can be determined simply for the purposes of costs.

16. Further, I am concerned by the quantum of costs which the Claimants appear to have incurred in producing Troiani 1. The figure which I have been given - £14,336 - is a very substantial (particularly when compared to the Defendants total costs) and making an order on this issue in favour of the Claimants would risk materially and unfairly distorting the result produced by the application of the general rule. In these circumstances, I consider that the most appropriate way to deal with the insurance issue is to make a deduction from the costs which the Defendants can recover rather than separate orders which would then be set off against each other.

17. Finally, in relation to the failure by Mr Pinelli to disclose all of his assets in 2024, this was, as I recorded in the main judgment, unfortunate. It is also conduct which I am entitled to take into account. However, it did not have a direct bearing on the costs incurred on the application save in the tangential sense that, once the Claimants were made aware of it (after they had made the application), they relied heavily on it as demonstrating a risk of dissipation (although they were already contending that such a risk existed before they knew of the non-disclosure). In these circumstances, it is important that the Court’s reaction to Mr Pinelli’s conduct is proportionate. As I recorded in paragraph [62] of the main judgment, the voluntary disclosure by Mr Pinelli of his assets, even if flawed, was part of a wider course of conduct in which Mr Pinelli undertook a series of voluntary steps which illustrated why there was not a risk of dissipation. Overall, therefore, Mr Pinelli’s conduct is not worthy of material condemnation or disapproval by the Court, and it would be wrong and disproportionate in my opinion to isolate the disclosure failing from the wide conduct.

18. Taking these conclusions together and looking at the issue of costs in the round, the appropriate order is, as I have referred to above, for the Claimants to pay 75% of the Defendants’ costs to be assessed on the standard basis.

19. Turning to the quantification of costs, the hearing lasted for one day and the Defendants have produced a costs schedule showing total costs in the amount of £44,198. It seems to me that I can and should assess these costs summarily in order to avoid the additional time and expense of a detailed assessment. For this purpose, I have considered the Defendants’ updated Statement of Costs and have concluded that I should assess the Defendants recoverable costs in the sum of £32,500. This is 75% of the total costs plus a small further reduction to reflect the fact that, although the costs are generally reasonable and proportionate and the case is not straightforward, the hourly rate for the A Grade fee-earner is slightly above the 2025 guideline hourly rate for “National 1” (being £325 against a guideline rate of £288). Undertakings

20. The other matter which I have to determine is whether or not the Claimants should be required to give cross-undertakings in respect of the undertakings which the Defendants offered and I accepted (paragraphs [78]-[81] of the main judgment). The cross-undertakings in issue are (i) a cross-undertaking in damages to the Defendants; (ii) a cross-undertaking in damages to third parties; and (iii) the usual cross-undertakings contained in paragraphs (7)-(9) and (11) of Schedule B to the standard form freezing order.

21. The Claimants submit that their cross-undertakings were offered in respect of the application for a worldwide freezing order against Mr Pinelli and, as that application was dismissed, there is no reason for any cross-undertakings to be required. They further submit that (a) cross-undertakings are not required where a defendant volunteers undertakings, particularly where no cross-indemnification from the Claimants was sought by the Defendants and (b) the cross-undertakings they offered were calibrated by reference to the freezing relief sought and not by reference to the much more limited relief contained in the undertakings given by the Defendants.

22. I can deal with this issue quite shortly. In my view, the cross-undertakings should be required from the Claimants. The undertakings which the Defendants gave voluntarily are, in substance, the equivalent of freezing (or proprietary injunctive) orders against the Second and Third Defendants as they prevent disposal of their assets other than in the ordinary and proper course of business and are supported by a penal notice on the front of the order. This relief is supported and bolstered by the undertaking from the First Defendant in respect of any powers he has as a director, officer or shareholder in the Second and Third Defendants (or four other identified companies). This undertaking is also subject to the penal notice. If this relief had been ordered by the Court, the cross-undertakings from the Claimants would have been required and, indeed, the draft order prepared by the Claimants reflected this because it offered the cross-undertakings in respect of all of the relief sought and not just the freezing order against Mr Pinelli.

23. It does not seem to me to make a material difference that the Defendants agreed to the relief voluntarily and therefore avoided the need for the Court to consider whether or not to order coercive relief. Moreover, it is not right to say (as the Claimants do) that the Defendants’ undertakings can be viewed as entirely voluntarily as the Court has determined that there was no basis for coercive relief. In fact, at the hearing, I did not need to consider the legal basis for the additional injunctive relief sought and whether it would have been justified, precisely because the Defendants offered undertakings in the same terms as the injunctions sought. The only issue I had to consider was whether the undertakings were acceptable but this was a narrow point which was only addressed in passing by the parties at the end of the hearing and which I determined on the basis that there was no reason to doubt the efficacy of the undertakings. The lack of a risk of dissipation against Mr Pinelli would not necessarily have determined the position in relation to the assets of the corporate defendants (which were alleged only to have held assets for the Claimants).

24. Likewise, I do not agree that the cross-undertakings which are in issue would have related only to freezing relief against Mr Pinelli. The purpose of the cross-undertakings in damages is to protect the Defendants and third parties in the event that it is determined that there was no underlying basis for the injunctive relief sought (which in turn gave rise to the undertakings). This purpose applies as much to the relief contained in the Defendants’ undertakings as it would have done to freezing relief against Mr Pinelli.

25. As regards the other cross-undertakings, they cover a situation in which the Claimants seek to deploy the order by notifying third parties about it or if they wish to enforce the undertakings abroad. Again, the basis for these cross-undertakings applies just as much to undertakings in lieu of injunctive relief as it does to formal coercive relief. For example, if there is a need to require a party who notifies an injunctive order to a third party also to provide a copy of that order to the third party, then there is nothing in the fact that the order here contains undertakings rather than injunctive relief to change this position.

26. In these circumstances, the cross-undertakings from the Claimants should remain in the order.

27. I would hope that the parties would be able to agree an order reflecting these conclusions.