News | Budgeting

The Budgeting Game

30 August 2017

In Findcharm Limited v Churchill Group [2017] EWHC 1108 (TCC), Coulson, J was scathing of the Defendant’s conduct and their budget.  Observing that steps have been taken in the budgeting process to make the process more user-friendly and efficient, including the use of the Precedent R, Coulson J went on to complain that, despite this ‘even now, some parties seem to treat costs budgeting as a form of game, in which they can seek to exploit the costs budgeting rules in the hope of obtaining a tactical advantage…’.

Coulson, J considered the various aspects of the two budgets, noting that the Defendant’s budget allowed nothing in respect of experts, even though at the hearing they argued that causation was in issue and this evidence was required. The judge also criticised the Defendant’s claims in respect of disclosure, witness statements and trial preparation. He concluded that the Defendant’s Precedent R was of ‘no utility’ and was ‘completely unrealistic’ as it sought to put as low a figure as possible on every stage of the litigation ‘without justification’.  He concluded that it was, therefore, ‘an abuse of the costs budgeting process’ and disregarded it for the purposes of the costs management hearing.

The Claimant, not unsurprisingly, agreed the Defendant’s budget and so, even though it was unrealistically low, the Defendant is bound by their budget. This means that even if they won in part (for example, on their Part 36 offer), they would not recover any of their expert costs etc.  In contrast, the judge allowed the Claimant’s amended budget as claimed.