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Twice the Budget
The High Court rejected a bid by a successful defendant to nearly double its approved costs budget of almost £270k after trial.

[2013] EWHC 1643 (TCC)

This was another case run under the costs management pilot for the Mercantile Courts and Technology and Construction Courts. The claim was dismissed, with the defendant succeeding on one small element of its counterclaim to the value of £3,500 plus interest. The claimant accepted that it was liable to pay the defendant's costs, but raised objection to the amount sought of £497,593.66, which was almost double the last court approved budget, which had been set in May 2012 in the sum of £264,708. This had been increased slightly in January 2013 to £268,488 to cover the cost of daily transcripts at the forthcoming trial. 

On 7 February 2013, a month before trial, the defendant sent the claimant and the court a revised costs budget, which doubled the previous estimate to £531,946.18. However, no formal application to revise the budget was made and the trial judge, Coulson J, was "wholly unaware that the defendant's estimated costs were now twice the amount approved in the costs management order" until the claimant's written opening which gave notice that "the defendant has not yet made any application for further enlargement of the Costs Management Order made on 31 May 2012, but any such application if made will be strongly resisted by the claimant."

At the conclusion of trial the defendant's counsel argued firstly that it should be entitled to indemnity costs as "this was a speculative and grossly exaggerated claim which … was advanced with little regard for proportionality and reasonableness [and that] the claimant acted unreasonably in refusing [an] offer of £150,000 (inclusive of costs) made on 19 February." Coulson J rejected these submissions, finding that the matters raised were plainly arguable, and ordered that costs were to be assessed on the standard basis. In doing so he commented as to the extent to which the costs management order might be relevant to an assessment of costs on an indemnity basis. He then went on to decide whether in the circumstances of this case the defendant was entitled to revise their budget and/or whether there was good reason to depart from it.

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