Battle over costs budgeting for high-value commercial cases

Here is a battle to keep out of, so I simply pass on the facts as they appear in an article by John Hyde today in the Law Society Gazette. Well, a bit more than pass them on, perhaps, but I will duck any attempt to take sides. Not really, anyway.

The article is headed City lawyers plead to keep budgeting exemption. The context is the decision, made during Lord Justice Jackson’s consultation period, that the Commercial Court should be exempt from the costs management and budgeting provisions which were to apply elsewhere. It is possible that the exemption was a pragmatic concession, leaving out the Commercial Court because it was going to be too tiresome to fight about something which had the potential to stand in the way of broader advances. It looked similar, to my eyes, to a battle commander’s decision to leave a strong fortress unstormed whilst pressing on with the rest of the campaign.

It was not just the Commercial Court judges who were against costs management. Many of the lawyers who bring high-value claims to the Commercial Court were strongly opposed to the principle of budgets, asserting that their clients weren’t interested in them; the nature of Commercial Court litigation, they said, was such that budgets would be time-consuming, expensive and of little value. These are the same arguments which are being run now, according to John Hyde’s article.

If I appear cynical about this, it is partly because of what happened after the new Rules passed into law, itself only a few days before the implementation date. At that rather late stage, the judges of other divisions with high-value cases became alerted, apparently for the first time, both to the proposals for cost budgeting and to the exemption won by the Commercial Court (the rest of us, I should observe, had known of the costs management proposals for a year or so by then). There followed what was, by judicial standards, an unseemly scramble, with the Chancery Division and certain specialist courts apparently basing their late claims for exemption on a kind of protectionism – if the Commercial Court did not require budgets, then parties would take every opportunity to issue their proceedings in that court, it was asserted, leaving their Lordships in the other divisions straightening their pens and scratching under their wigs in empty courts.

To me, this looked rather like supermarkets trying to restrain the grant of planning permission for a rival, and had little to do with justice, or with commercial reality for most clients for whom a litigation project is no different in kind to any other project. If you plan a new building, seek to acquire a company, or open a new line of business, you do an analysis of risk, cost and benefit. That may change as time goes by, but at least the decision has been made on an informed, prudent and defensible basis. It is hard to see why litigation is any different.

It is clear, however, that many high-end commercial litigation solicitors think otherwise, including some whose opinion I respect, and I am not going to get into an argument in which principle conflicts with the experience of those who deal with high-end clients and their litigation every day. I will observe only that we do not seem to have heard from any of these clients in this dispute. What do they think about the idea of budgets from their own lawyers and from opponents?

According to the Gazette article, a decision will be made in the autumn.

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About Chris Dale

I have been an English solicitor since 1980. I run the e-Disclosure Information Project which collects and comments on information about electronic disclosure / eDiscovery and related subjects in the UK, the US, AsiaPac and elsewhere
This entry was posted in Court Rules, Courts, CPR, Jackson Reforms, Judges, Litigation. Bookmark the permalink.

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