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Budgeting In Group Litigation

View profile for Mark Holloway
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This practice note will be treated as a live document and updated when developments arise.

For information on group litigation please see the previous practice note Costs in Group Litigation. The below will refer to terms addressed in the practice note.

Civil Procedure Rules

The CPR provides no additional guidance on budgeting in a group litigation claims.

Sharp v Blank [2017] EWHC 3390 (Ch), at para [10]

Guidance is provided Chief Master Marsh, who suggests that CPR 3.1(2)(m) gives the court ‘ample power…  to create a bespoke costs management arrangement for cases that require it’.

“3.1

(2) Except where these Rules provide otherwise, the court may –

(m) take any other step or make any other order for the purpose of managing the case and furthering the overriding objective, including hearing an Early Neutral Evaluation with the aim of helping the parties settle the case.”

Bespoke Budgets

Additional Phases

Re Construction Industry Vetting Information Group Litigation Various Claimants v Sir Robert McAlpine [2015] EWHC 3543 (QB)

Master Gordon-Saker ordered that each firm of solicitors representing the claimants and defendants serve a budget in respect of common costs only. In addition to this point is was ordered that the budgets contain the following additional phases:

“(i) Selection of Lead Cases

(ii) Preparation of Generic Witness Statement(s) (regarding the common issues as a whole and not lead cases)

(iii) Group Co-ordination costs

(iv) Costs Management Hearings

(v) Historic and Live Applications.”

This demonstrates one of the ways the court may adapt the costs budgeting procedure in order to manage the claim and costs.

Number of Budgets

There are two types of costs in group litigation claims, individual costs and common costs. A singular budget often will not accurately outline the various potential issues to be decided upon in group litigation cases. The common costs include the costs common to all the claimants, GLO issues and the costs of any lead claimants. The court will often order a common costs budget be prepared. It may be necessary that this budget include additional phases as detailed in Re Construction Industry Vetting Information Group Litigation Various Claimants v Sir Robert McAlpine [2015] EWHC 3543 (QB) above.

When considering individual costs it’s important to consider that there could be hundreds or potentially thousands of claimant’s with varying and different claims. It would be grossly disproportionate to prepare a budget for each individual claimant. Below are some examples of how the court may deal with this issue.

Various Claimants v MGN Ltd [2016] EWHC 1894 (Ch)

This was a defamation claim. The court ordered the production of three template budgets, the individual claims would be categorised into one of the templates depending on the criteria prescribed for each template i.e. the number of publications or articles the claim related to. The court would then approve the costs for each template budget, significantly reducing the number of budgets and case management hearings required. In addition to the template budget it was agreed there would be a separate budget for common costs and that any party could apply to the court for a bespoke costs budget instead of utilising one of the template budgets.

Kimathi and others v Foreign and Commonwealth Office [2018] EWHC 216 (QB)

In addition to the abilities detailed in the cases above, Kimathi confirms that the court has the power to also set budgets for prospective client’s that are yet to be added to the proceedings. The budget will apply no matter what point the party joins the proceedings or if the party changes solicitor. This is because ‘the work estimated to be done will be the same for each client, whenever they instruct’ the solicitor.

Practical Considerations

Costs management was introduced to stop the costs of litigation from spiralling out of control. In group litigation the costs of costs management also have the ability to spiral if not properly managed. It is important that the parties and the court reach a sensible agreement regarding the approach to be applied to costs management, dependant on the circumstances of the claim, be it multiple budgets or bespoke additional phases.

It is important in group litigation to prepare detailed and nuanced assumptions to accompany the budgets. These should clearly outline the criteria the budgets have been set using, as well as detail the work that is anticipated.

Apart from the information detailed above it is important to comply with the rules that govern costs management which can be located in CPR 3.12 and CPR 3E.

For more information on group litigation or costs budgeting please see the following practice notes:

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