Budgets of ten times claim value allowed in competition case
Disproportionate budgets of £1.5M reduced to £800,000, but still ten times the claim
A dispute arose between the Claimant, Red and White Services Ltd, a subsidiary of Stagecoach Group and the Defendant, Phil Anslow Ltd, a rival bus company and subsidiary of Vartag, a local bus company concerning access to bus slots in Cwmbran Bus Station, Wales.
Proceedings were issued by the Claimant for trespass relating to those bus slots and the Defendant responded with a competition law claim brought as a counterclaim against the Claimant and a Part 20 claim against the Third Party, The Prudential Assurance Company. Principally the Defendant/Part 20 Claimant’s claims concern leases granted by the Third Party to the Claimant and they claim relief including declarations that the leases are void.
The matter was transferred to the specialist competition law list in the Business and Property Courts in Wales and during a costs and case management conference, case management directions including directions for a 10 day trial commencing July 2019 were provided. The Court subsequently considered the parties costs budgets.
The Defendant/Part 20 Claimant submitted a costs budget of £288,000 including incurred costs of £103,000.00 to bring the matter to Trial and the Claimant and Third Party submitted costs budget of £1.5m each. The Claimant’s incurred costs were approximately £100,000.00 and the Third Party’s incurred costs were £348,000.00.
The Defendant/Part 20 Claimant submitted the Claimant's and Third party's costs budgets were seriously disproportionate given that damages are likely to be in the region of £80,000 to £120,000. While the Defendant/Part 20 Claimant recognised that competition law cases are, in general, worth far more than the sums in issue in this matter, often exceeding the £10 million costs budgeting threshold, their case as far as budgeting was concerned was that this was a case of modest value against a relatively small company and access to justice would be at risk if the Claimant’s and Third Party’s budgets were allowed at the level submitted.
The Defendant/Part 20 Claimant referred to the matter of Willis v MRJ Rundell & Associates Ltd and Grovecourt Ltd  EWHC 2923 (TCC) where Coulson J found that costs budgets, which had been agreed between the parties, were nonetheless disproportionate and declined to make a costs order. Mr Justice Briss was also referred to the matter of Wright v Rowland  5 Costs LO 713 which concerned a dispute about the complexity of the litigation where Flaux J chose to manage those items in the budget which could be managed at that stage leaving further elements of the budget to be managed when the true complexity of the matter became clear.
In considering proportionality and in comparing the sums in issue with each of the parties’ costs budgets Mr Justice Birss noted that even the Defendant’s own budget, which was a significant reduction to their initial budget filed in October 2017, was disproportionate stating –
‘What this all goes to show, simply based on the way the defendant is approaching the matter, is that one cannot simply look at this dispute as a money claim for £80,000 to £120,000. The claim has a higher value and greater significance than can be seen simply by focussing on the likely quantum of damages.’
Mr Justice Birss accepted that land law issues in this case - which had been referred to by the Claimant and Third Party – were potentially novel issues but did not find that this was sufficient to justify the substantial difference between budgets. Mr Justice Birss also accepted a point made by the Third Party that this claim has significance from the point of view of its business as an investor and a further point that infringements of competition law have a public aspect.
Mr Justice Birss was not persuaded that the Defendant/Part 20 Claimant’s total costs exposure was a factor to be considered particularly since they had chosen to join the Third Party. He also rejected the argument that the Claimant’s and Third Party’s budgets should be set at the same level as the Defendant/Part 20 Claimant’s budget, however, taking into account the value of the claim and the matters in issue he found that both the Claimant’s and Third Party’s future costs were disproportionate and ordered –
‘Inevitably, in order to do this, the court cannot do anything other than take quite an approximate approach to estimating a proper overall level for the future costs of one party. In my judgment the appropriate overall figure in this case for the claimant or the third party should be £800,000. That is double the initial estimate from the defendant and that is what I will do.’
Mr Justice Birss also commented on the Third Party’s figure of £348,000 in incurred costs. While he accepted the Third Party’s submission that they had more to do at the pre-action stage he commented that incurred costs appeared high and suggested £190,000.00 as a reasonable and proportionate figure.