Case on Costs Budgets under the new Court Rules
We have already reported on recent changes to the Court Rules which came into effect on 1 April 2013. One of the new rules brought in costs budgeting whereby the parties to litigation, in certain cases, have to provide the Court with estimates of likely fees for the litigation and the Court has to approve the budgets. The rationale behind this is to keep the costs proportionate, amongst other reasons.
The new costs budgets were trialled in the Birmingham Mercantile Court and the court recently had to decide costs on a case within which the costs budgeting had been trialled.
In this case (Slick Seating Systems & Another v Lea Mark Adams and others) the claimants obtained an interim injunction against the defendants. From that point the defendants barely participated in the proceedings which made the litigation more arduous for the claimants. The Judge ultimately entered judgment for the claimant in a significant sum of money (over £4 million). The claimants asked for their costs to be paid by the defendants.
At an earlier hearing the judge had approved the claimants’ costs budget in the region of £359,000. The claimants’ costs at the end of the trial were just under this approved budget. The judge therefore decided that those costs should be paid by the defendants and decided that detailed assessment (the procedure by which the Court would ordinarily assess the costs) would not be necessary.
It was partly decided on the facts of the case (i.e. taking into account the defendants’ conduct) but it is clear that the new Court rules regarding budgeting will be taken seriously.
If you have any queries on this or other areas of commercial disputes, please contact one of our Commercial Litigation team.