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Exploitation of budgeting rules criticised as a 'form of game'

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Costs budgeting has been utilised for a few years now and there remain lawyers on both sides of the fence as to its value. Whichever side your views fall it is rare, if not unheard of, for a lawyer to view the costs budgeting process as cheap and/or easy. I think it is fair to say that it is a time consuming process, regardless of its merits. It is in this context therefore that it is increasingly frustrating when a party takes an antagonistic and unrealistic approach to the pre CCMC attempts to agree budgets.

I, for one, was extremely pleased to read The Hon. Mr Justice Coulson’s Judgment in the recent case of Findcharm Limited v Churchill Group Limited [2017] EWHC 1108 (TCC). This was a case which looked at the approach and conduct of the parties in relation to costs budgeting. It makes reference to the fact that the whole process not only takes up a substantial amount of the litigators' time but also a large amount of judicial time and resource. It is therefore fairly damning of the 'form of game' played out by some litigators in the hope of ‘obtaining tactical advantage’ and parties’ failure to adopt a realistic attitude.

Specifically this is a case where the Claimant’s budget (with some concessions) was put at £244,676.30 against the claim value of £820,000 plus interest. The Defendant’s budget was put at £79,371.23 and failed to include any expert’s fees, despite causation being an issue and there being a concession that a fire expert would be required. A number of phases were identified by J Coulson as demonstrative that the Defendant's budget was 'lacking in reality' and it was summarised as being 'of no utility’ and ‘completely unrealistic'. J Coulson concluded that the Defendant’s budget was to be disregarded, though noted that the Claimant had sensibly agreed it; he approved the Claimant’s budget in the sum of £244,676.30 as sought.

I am comforted that the Court identified and highlighted the underhand tactics employed by the Defendant in this case and it offers some reassurance that, where this type of approach is employed, it may not always succeed.