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Warning issued over disproportionate costs budgets

A TCC judge has warned the parties in a £170k dispute over damage to seek "sensible and imaginative solutions" to substantially reduce their combined budgets of around £800k.


This was a claim pleaded at under £170k. The claimant and two named defendants filed costs budgets of some £206,000, £198,000 and £207,000 respectively. Mr Justice Akenhead, faced with a number of issues at the first case management conference, including costs, observed that if and when a third defendant was joined in it was "at least possible that its costs budget will be similar". He continued...

“Because the parties are coming back for a review case management conference in February 2014, I deferred making a decision on costs management orders. However, I did point out to counsel that the expenditure of some £610,000 or, with [the possible third defendant], £800,000 of costs on a claim for under £170,000 at least looks extremely disproportionate.

“One can legitimately envisage, only by way of example, a hypothetical scenario of [the claimant] losing and being ordered to pay the three other parties’ costs, which even after assessment might (subject to the costs management regime) cost them some £500,000-£600,000 plus their own costs; many right-thinking people might consider that to be wholly unacceptable.”

As a result, the judge invited the solicitors to give “very serious consideration substantially to reducing the costs budgets to reflect these sorts of considerations” and to seek “sensible and imaginative solutions, such as the sharing of certain types of expert, to achieve this”. He warned…

 “The Court may well otherwise be faced with a stark choice of assessing and fixing what is the maximum proportionate budget for each of the (probably) four parties to this litigation; if it has to do that, then the shortfalls between the current costs budgets and those maximum allowances could well be so substantial that commercially it may be unrealistic for the parties to fight the case.”

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