The High Court has imposed costs budgeting rules on a damages claim worth £18m, making it one of the largest cases to be subject to the discipline.
The Honourable Mr Justice Coulson, sitting in the Technology and Construction Court, said the court had the power to order the filing and exchange of costs budgets in CIP Properties v Galliford Try Infrastructure and others.
The developer is claiming for damages against the main contractors for remedial work at a site in Birmingham. The trial is estimated to take at least six weeks, featuring expert evidence in numerous disciplines.
Civil Procedure Rules that came into force in April 2013 set the mandatory limit for costs budgeting at £2m. That was subsequently raised to £10m, with the court urged to exercise its discretion in ordering costs budgets.
At a hearing earlier this month, the claimant argued that the court had no discretion to order costs budgeting in this case.
Lawyers said the reference in practice directions to ‘any other proceedings’ could only be a reference to non-multi-track claims.
Coulson accepted that costs budgets are not automatically required in cases worth more than £10m as issues of proportionality are likely to be less important or relevant.
But he noted that costs budgets are ‘generally regarded as a good idea and a useful case management tool’, and there should be no presumption against ordering them for higher value cases.
Coulson said he took into account ‘express advice’ from the president of the Queen’s Bench Division, Sir Brian Leveson, that, even where exceptions might apply, the use of costs management should always be considered. If he accepted the claimant’s argument on the limited scope of ‘any other proceedings’, this would have no effect.
Furthermore, he said, if the limits were enforced too rigidly and discretion was lost then it could ‘easily lead to the abuse of the process’.
‘Claimants who wanted to avoid the costs management regime could frame their claims for £1 more than £2m (old regime) or £10m (new regime). This would then avoid any consideration at all by the court of the proposed costs, no matter how disproportionate or inflated they were.’