The High Court determined that costs budgets of £1.5m in respect of a claim with a potential value of £80-120,000 were disproportionate, notwithstanding the wider issues involved.
RED AND WHITE SERVICES LTD v PHIL ANSLOW LTD & ANOR [2018] EWHC 1699 (CH)
PROPORTIONALITY : COSTS BUDGETING
“the fact is that modest value cases often raise legally novel issues which may have far-reaching implications. While that may well justify a modest increase in a costs budget, it does not seem to me that it is a factor which can be used to justify the very substantial differences between the budgets for the parties here. Putting it another way, legal novelty is not a good explanation for high costs.” [20]
“I recognise the wider issues raised by the claimant and the third party but I am concerned that that point cannot go too far in a case which is in the end about one bus station in one town in Wales for which the financial consequences are of the order of £80,000 to £120,000.” [24]
This was a dispute between rival bus companies over access to bus slots in the bus station.
The claimant sued the defendant for trespass relating to those slots.
In response the defendant brought a competition law claim against the claimant as a counterclaim and against the third party as a Part 20 claim.
The case involved two economist experts around seven fact witnesses. The matter was listed for a 10 day trial in a window commencing 2 July 2019.
Costs budgeting had been a “major dispute between the parties”.
The defendant’s budget was for £288,000 including £103,000 of incurred costs.
The claimant’s and the third party’s budgets were each around £1.5 million.
The claimant’s incurred costs were about £100,000.
The third party’s incurred costs were £348,000.
The defendant submitted that the claimant’s and the third party’s budgets were seriously disproportionate, compared to likely damages in the region of £80,000 to £120,000.
The defendant recognised that competition law cases in general can cost as much as the claimant and third party had budgeted for in this case and that experienced parties looking at the resolution of the type of issues arising may well produce figures of the order of the budgets in this case.
But the defendant also emphasised that in general, competition law cases are worth much more than this case in financial terms, often being worth more than £10 million and therefore outside of costs budgeting.
The defendant invited the court to accept its submission that the budgets from the claimant and the third party were disproportionate and on that footing, take one of three courses:
i) Declare that the budgets are disproportionate and invite the parties to go away and prepare fresh budgets with that in mind.
ii) Make a costs management order as best the court could (following Wright v Rowland [2016] 5 Costs LO 713), setting much lower figures than those sought.
iii) follow Willis v MRJ Rundell & Associates Ltd and Grovecourt Ltd [2013] EWHC 2923 (TCC) and refuse to make a costs management order at all.
The claimant and the third party invited the court to approve their budgets as realistic estimates of the likely cost.
They submitted that the claim should not just be seen as simply a modest claim for damages in the order of £80,000 to £120,000. The competition claim had serious implications for both the claimant and the third party, potentially affecting both of their services generally.
The claimant and third party also pointed out that an infringement of competition law is a matter of public law as well as private law and was a very significant matter for commercial undertakings. They referred to the point that this claim involved interaction between land agreements and competition law which may perhaps have very wide implications.
Finally, it was submitted that the defendant’s budget itself was unrealistically low. It was essentially, it was said, an attempt to create figures for costs which are unrealistically low for the purpose of budgeting and to act as an unfavourable contrast to the figures from the claimant and the third party.
one cannot simply look at this dispute as a money claim for £80,000 to £120,000. The claim has a higher value and greater significance than can be seen simply by focussing on the likely quantum of damages.
the fact is that modest value cases often raise legally novel issues which may have far-reaching implications. While that may well justify a modest increase in a costs budget, it does not seem to me that it is a factor which can be used to justify the very substantial differences between the budgets for the parties here. Putting it another way, legal novelty is not a good explanation for high costs.
I accept that the land law/competition law interaction may well support the idea for two counsel. That could be a justification for a very specific aspect of the budget. However as a general point across the board, I do not accept that this argument has significant traction.
I recognise the wider issues raised by the claimant and the third party but I am concerned that that point cannot go too far in a case which is in the end about one bus station in one town in Wales for which the financial consequences are of the order of £80,000 to £120,000.
It is a matter for the defendant to have chosen to join both of those independent companies and therefore the fact that the two budgets together, each of £1.5 million, mean that the defendant could be bearing a cost risk of £3 million, does not seem to me to be a matter of great significance on the facts of this case. The individual budgets are the figures I need to consider, not the net risk to the defendant of aggregating the two.
Taking into account the value of this claim in money terms and also taking its overall significance into account, in my judgment, a costs budget of £1.5 million is not just on the high side, it is disproportionate. It is and should be possible for a competition law claim about a bus station to be tried at a more modest costs level than that. Costs proportionate to the issues in a claim like this ought to be lower. The question which needs to be grappled with is what to do about that.
- I am not at all attracted by the Precedent R produced by the defendant which seeks to set the claimant’s and the third party’s budgets by reference to the same level, more or less, as the defendant’s budget. The defendant’s budget is too low and is not a good guide.
For example, the defendant’s budgeted figure for disclosure just does not make sense and, as I have mentioned already, the figure for experts seems to be surprisingly low. Mind you, the very, very high figure for the expert to be shared by the claimant and the third party also seems to me to be entirely disproportionate. The only reason I do not add the word “surprisingly” is I have seen how much expert economists can charge in competition law cases, but that does not mean that it is always proportionate to do so.
In my judgment the appropriate overall figure in this case for the claimant or the third party should be £800,000. That is double the initial estimate from the defendant and that is what I will do.
The court made an order declaring that the court approved a budget for the future costs of each of the claimant and third party in a sum not exceeding £800,000 respectively and another order giving directions for the claimant and third party to file revised budgets in line with the declaration.
By signing up you consent to receiving occasional emails about our latest news and services. Your information will be used in accordance with our privacy policy.
Bullock Orders: an examination of the “Bullock” principles on a... 
![Lejonvarn v Burgess & Anor [2020] EWCA Civ 114](https://i0.wp.com/tmcls.co.uk/wp-content/uploads/2020/02/Lejonvarn-v-Burgess-Anor-2020-EWCA-Civ-114.jpg?resize=80%2C80&ssl=1)
