Kerry Underwood

COSTS BUDGETING AND DISPROPORTIONALITY: A TRESPASS CLAIM

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In Red and White Services Ltd v Phil Anslow Limited and another [2018] EWHC 1699 (Ch) (23 May 2018)

a High Court Judge held some of the budgets to be disproportionate and emphasised that parties should approach budgeting realistically.

High budgets may not be approved and setting low budgets as a tactic may backfire.

The claimant and defendant are bus companies in dispute about access to slots in a bus station and the claimant sued the defendant for trespass.

The defendant counterclaimed with a competition law claim against the claimant and against a third party.

The defendant’s budget to trial was £288,000, reduced from £400,000, originally.

The other two parties’ budgets were each £1.5 million to trial.

The defendant submitted that the other parties’ budgets were seriously disproportionate, given that damages were likely to be £80,000 to £120,000.

The claimant and the third party submitted that their budgets were realistic estimates and that the defendant’s budget was unrealistically low.

This was not simply a modest claim for damages but had serious implications for the claimant and the third party.

Taking into account the financial value of the claim and its overall significance, the judge decided that a costs budget of £1.5 million was disproportionate.

It should be possible for a competition law claim about a bus station to be tried at a more modest costs level.

The seriousness of competition law infringements, could not be used “as a form of trump card justification for a very high budget”.

The significance of an approved budget was that costs were more likely to be recoverable from the losing party.

Accordingly, a very significant aspect of budgeting was concerned with the other party’s cost risk.

That was obviously of concern to the defendant in this case as the defendant was the claimant in the competition claim.

As to the options available after declaring the budgets disproportionate, the judge:

  • was not attracted by the defendant’s Precedent R, which sought to set the other parties’ budgets by reference to the same level as the defendant’s budget.

He considered that D’s budget was too low and not a good guide.

 

  • thought that simply to send the case away helped nobody.

Simply to decline to make a costs management order also was unhelpful and prolonged uncertainty.

 

  • concluded that the court should come up with an overall appropriate figure for the claimant and the third party’s budgets of £800,000.

 

They should file revised budgets in line with that.

 

 

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Written by kerryunderwood

August 15, 2018 at 8:10 am

Posted in Uncategorized

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