Costs budgeting in high value cases?

 The courts’ appetite for budgeting in large very large cases - above the £10M threshold – shows no sign of abating.  We see willingness to embrace budgeting in every kind of case irrespective of CPR 3.12 and irrespective of the resources of the opposing parties. It would be foolhardy to ignore budgeting, even for those involved in the largest of cases.

In Napp Pharmaceuticals v Dr Reddy’s Laboratories (UK) Limited & Ors [2017] EWHC 1433 (pat) Mr Justice Birss considered an application based on a Request for Further Information in an enquiry as to damages and on a cross undertaking.  The patent holder Napp brought a claim for infringement and an interim injunction against, amongst others, Sandoz Limited.  Napp lost at both first instance and on appeal and Sandoz brought an application for damages, pleaded at circa £100M.

Although the case fell well outside of the £10M value under CPR 3.12 Napp invited the court to order costs budgeting, citing CIP Properties v Galliford Try Infrastructure Limited in support. 

Amongst the reasons for inviting the court not to budget the case, Sandoz submitted that the detailed assessment procedure acted as a sufficient safeguard to ensure the recovery reasonable and proportionate costs, and that this was a complex case that was difficult to costs budget.

Mr Justice Birss, rejected that submission entirely, and although he did not order that the case be budgeted at that stage, he did order the parties to exchange statements of incurred and future costs at the close of pleadings stage (the usual order) with consideration to be given to budgeting at that stage.

The case illustrates well that Judges are no longer shying away from dealing with budgets in very large high-value cases. 

Comment

It is interesting to see that Mr Justice Birss, a former IPEC Judge and so coming from a forum in which costs are fixed, express a keenness for budgeting.  The judge also made clear that in his view an exchange of estimates did not provide the same stricture as costs budgets.

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Afqar Dean

Costs Lawyer & Director of Legal Costs

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