Coulson J declines “unreasonable” costs budgets in professional negligence claim
The High Court has declined to accept “unreasonable” costs budgets on both sides of a £1.6m professional negligence claim, in an important decision on proportionality.
In Willis v MRJ Rundell [2013] EWHC 2923 (TCC), a claim against a firm of construction professionals, both sides submitted their costs budgets in December 2012—£821,000 for the claimants, and £616,000 for the defendants. Mr Justice Coulson expressed concern that the figures were high.
The case went to mediation and the trial was adjourned. Coulson J then ordered a case management hearing solely on costs management, by which time the combined budgets exceeded £1.6m.
Coulson J declined to approve the budgets, stating: “It seems to me that one test of proportionality is whether the trial is likely to be an end in itself, or merely a lesser part of the process, which the parties will use in order to put themselves in the strongest position to argue that, subsequently, the other side should pay all or most of their costs.
“When the costs on each side are much higher than the amount claimed/recovered, the latter is almost inevitable. I have no doubt that that will be the case here. For those reasons, therefore, I conclude that the costs shown in the costs budgets are disproportionate and unreasonable.”
Coulson J was critical of some of the items on the claimant’s budget, which were “said to be both incurred and estimated, without it being clear which is which, and without any breakdown of either”.
The allowance for experts’ fees were put at £100,000 “before any account is taken of their involvement at the trial…I would have expected to see a figure something like half the amount actually included in the costs budget,” he said. “Unhappily, my recent experience is that the amount of the experts’ fees in cases like this is often out of all proportion to the assistance provided.”
However, practitioners will be relieved by Coulson J’s comments that the absence of an approved budget do not necessarily mean no costs are recoverable.
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