Collins & Others v Ticketmaster UK v Imbenta Technologies Limited  Costs LR 123
HHJ Pearce, sitting as a Judge of the High Court in the Business & Property Courts at Liverpool handed down Judgment in an application brought by multiple Claimants and the Third Party seeking a costs budgeting exercise to take place after it had been agreed at the CMC that costs budgeting could be dispensed with.
At the time of the CMC only the Claimants and Defendants were parties to the action. At that hearing there had been discussion as to how costs management would take place in a case involving multiple Claimants and the consensus between the parties on that occasion was that costs management was not necessary or appropriate and it ought to be dispensed with.
Subsequent to the CMC the Defendant brought a Part 20 Claim against Imbenta, the Part 20 Defendant joining them into proceedings and again by way of case management a further Order was made dispensing with costs management so as to keep a consistent pattern between the two claims.
The Third Party and the Claimant brought an application seeking an Order that costs budgeting and costs management took place.
It was submitted that pursuant to CPR 3.12, costs management would be the default position in a case where the claim has less value than £10,000,000. On the face of both the Claimant’s claim and the Third Party claim, the total value of the same would not exceed this limit.
The applicants were concerned that the Defendant was incurring considerable costs, a monthly invoice indicating that costs paid to their Solicitors was in excess of £200,000 for the month although it was accepted that some of the services being provided by the Solicitors were in relation to matters beyond the litigation.
The Defendant resisted the application on the following basis:
a) The application was an abuse of process defending the broad rule in Henderson v Henderson. The parties did not have absolute liberty to simply return to Court and re-fight battles which had been determined, normally such a stance should only be taken where there is a material change in circumstances since the prior Order had been made.
b) That to introduce costs management under CPR Part 3 would incur considerable expense in relation to a relatively limited budget as a number of phases which would have to be budgeted under practice direction 3E to Part 3 CPR had already passed; to require the filing of costs budget and the consequential costs management would require the parties to undertake work to state costs involved in matters which had already passed and been incurred.
At paragraph 9, in relation to the abuse of process argument, HHJ Pearce held:
“In my Judgment, there is no principal reason why the Court cannot re-visit this decision as to whether or not to make a costs management order. It would be different if there had been a contested hearing on that issue and the Court had reached a reasonable conclusion as a result of submissions. It therefore follows that, as a matter of principle in my Judgment, the applicants in this Order do not need to show change of circumstances in order to justify the Court making an Order.”
The Judge held that the fact that the applicants had previously agreed that costs management was unnecessary was a relevant issue to bear in mind and it was accepted that the beneficial consequences of making a costs management order at the stage and proceedings at which the application had been made would be far less than if costs management had been undertaken in the first instance at the first CMC and at the time the Third Party had been joined.
At paragraph 10:
“…in considering the overriding objective, I bear in mind that it seems to me to be the high cost of complying with the costs management regime at this stage coupled with the fact that the benefit to be achieved from it will be significantly less than would otherwise have been the case had the order been made at an earlier stage.”
That was not to say that the Court would not impose conditions in an attempt to manage costs expectations and while Counsel for the applicants had sought that the filing of a costs budget in respect of all phases of the case, even if the Court had not engaged in the costs management process because the same would be an inefficient use of resources that the Court might consider appropriate, as this would involve considerable expense and impose a burden upon the parties, it was appropriate to require costs estimates to be filed.
At paragraph 11:
“It seems to me that concern can properly be met by requiring all of the parties to file costs estimates which, it seems to me, would be most sensibly ordered in respect of those phases that either have not yet begun at all, or which would probably have only had limited work done on them within the table in PD3E to part 3 of the Civil Procedure Rules, that is to say that the phases of witness statements and onwards but excluding, for these purposes, ADR and excluding the circumstances in which contingent costs might be included in a budget. In my judgment, to apply the parties’ to give an estimate of costs that they now anticipate they will incur in respect of those phases, is a reasonable and proportionate Order and is one that is consistent with the overriding objective.”
Finally, at paragraph 13 of his Judgement, HHJ Pearce opined that the provision of the costs estimate would, if it was appropriate, allow the Court the power to express an opinion as to the reasonableness and/or proportionality of any costs that it was estimated were to be incurred in the future.