Defendants’ low costs budgets


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In the recent case of CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd & Ors (Costs No. 2) [2015] EWHC 481 (TCC), Coulson J was dismissive of the suggestion a defendant might try to submit a knowingly low costs budget:

“In his written submissions on behalf of the claimant, one of the points made … was that the court should not have any great regard to the costs budget figures put forward by the defendant and the additional parties because they had ‘an incentive’ to advance low figures in their costs budgets. This suggestion of manipulation of the figures by the other parties was, understandably, the subject of considerable protest. It seemed to me to be an unwarranted accusation. In truth, the party who was most vulnerable to such an accusation was the claimant itself.”

Hopefully, this will be an end to similar suggestions made by claimants in other cases that defendants have any incentive to put forward artificially low figures in their budget. I would suggest that in the future, in the absence of very specific evidence to support the same, such a suggestion should be treated as being a serious professional conduct issue and adverse costs orders should be made against those advancing such arguments. The very idea that defendants would pitch their budgets low for tactical reasons…


8 thoughts on “Defendants’ low costs budgets


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    domthedrafty on said:

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    …and yet Master Cook was only saying precisely one week before, that in his experience of that of Master Roberts “Many Defendants’ budgets are unrealistically low.”

    Is the conclusion therefore that it’s not deliberate manipulation but many Defendants budgets are nonetheless unrealistically low?


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    Nameless Costs Lawyer on said:

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    I assume that the above was not a QOCS case and therefore there was actually some prospect of the Defendant recovering its costs had the case been dismissed – unlike the same scenario in clin neg cases, not mentioning any NHS appointed costs firms in particular….!


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    Anonymous on said:

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    the problem with taking quotes from judgements, is the value is lost without reading the full transcript (oh how I hate those who repeatedly misquote “Brush” on estimated times for that!)

    I find the reason Defendants put in unrealistically low budgets, and it does happen for certain, is twofold. Firstly, Defendant lawyers are not used to working to financial restrictions and accountability – even where they have a fixed fee arrangement with their Insurer – and thus have little idea what they actually do spend in running cases. From that viewpoint, it is a shame QOCS exists, as it would have been a major learning curve to force them to find out

    The 2nd reason, is that Defendants tend to use their in-house or Insurers panel draftsmen – whom are solely geared to negotiating costs down, NOT actually costing them. Its so easy to calculate a percentage off to make an offer, quite another to actually bill a file and work out sensibly how much it will cost to future conduct


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    Rob on said:

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    The third and most obvious reason is that, a Defendant having already admitted some level of liability (specifically in clin neg cases) simply wants to have the DJ think that they can run the case within 20 hours of work whilst the Claimant’s 100 hours is completely excessive and must be dropped in line with thier own!


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    Money for Nothing on said:

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    “.Its so easy to calculate a percentage off to make an offer, quite another to actually bill a file and work out sensibly how much it will cost to future conduct”

    Yikes- looks like I’ve been making my day far more complicated than it needed to be. Now I know how my job is really done, my days are going to be become SO much easier. The only thing I need worry about is wearing out my calculator by dividing by 5 and then multipying by 4 on every matter!


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    Money for Nothing on said:

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    small amendment- that should of course be “multiplying”, figured I better get that in before the usual round of pedantry starts.


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    domthedrafty on said:

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    Whilst I am predominantly Claimant, to add some balance, I have to say that the majority of budgets I see from Claimants are overstated too.

    Claimants costs lawyers/draftsmen try to include everything which is reasonably foreseeable or may happen.

    External CDs are concerned they’ll be sued for negligence if they miss anything, internal CDs are worried they’ll be sacked/shouted at/disciplined if they miss anything. Both err on the side of caution and include everything.

    As one regional costs judge said to me, all it has done is moved the costs negotiation and assessment into the middle of every multi-track case which distracts from the litigation. It means a mini-DA in the middle of every case where everyone tries to guess the costs, rather than a handful of full DAs at the end where everyone actually knows the costs.


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    Anonymous on said:

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    @ money for nothing

    you need a calculator to work out 20%??? So grateful to you for reinforcing my point, Defendant negotiators dont know how to cost

    @domthedrafty

    the drafters of budgets would do well to read the certification on each budget they prepare, rather than just throw everything in they can think of. Also, can you advise which RCJ said about doing mini-DA’s in the middle of cases, as if he is doing that, he needs corrected soon

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