DeNovo Law

linkedin

Details

Mr Justice Mellor warns of a costs budgeting ‘trap’

The successful defendants’ costs budgeting calculations had failed to anticipate a form of order hearing (FOOH)  - preparation for which, as is common practice in IP and patent cases, involved (expensive) analysis and division of incurred costs between various issues - and nor did they apply vary their costs budget to include such costs.  Instead, at the FOOH the defendants sought the relevant amount as falling outside of budgeted costs (serving a N260 costs statement for in excess of £58,000). 

Lifestyle Equities CV v Royal County of Berkshire Polo Club Ltd & Ors [2023] EWHC 2923 (Ch)

In rejecting the defendants’ approach, the judge observed that a Trial Phase costs budget includes ‘[d]ealing with draft judgment and related applications’ and that in patents and in other substantial cases, a separate FOOH is ‘entirely normal’.  Thus, as regards the FOOH – properly regarded as Trial Phase costs - it would be for the defendants to convince the costs judge on detailed assessment that there is good reason to depart from given budget.

Judge’s recommendation:  Noting that the FOOH often takes place long after the substantive judgment, and that the cost involved can be hard to predict (because the analysis will depends on precisely which issues have been won and lost)  judge suggested ‘…that parties ought to consider when preparing their costs budgets for substantial cases where a FOO hearing is likely to be heard after hand-down of the substantive judgment, a contingent set of costs of carrying out an analysis of their costs to permit the Court to make an issue-based costs order…’.

Takeaway:  Where a FOOH is normal  - such as in patent, IP, or heavier commercial cases – you must allow for that when preparing your costs budget. 

DeNovo | Legal Costs Experts

Details

Mr Justice Mellor warns of a costs budgeting ‘trap’

The successful defendants’ costs budgeting calculations had failed to anticipate a form of order hearing (FOOH)  - preparation for which, as is common practice in IP and patent cases, involved (expensive) analysis and division of incurred costs between various issues - and nor did they apply vary their costs budget to include such costs.  Instead, at the FOOH the defendants sought the relevant amount as falling outside of budgeted costs (serving a N260 costs statement for in excess of £58,000). 

Lifestyle Equities CV v Royal County of Berkshire Polo Club Ltd & Ors [2023] EWHC 2923 (Ch)

In rejecting the defendants’ approach, the judge observed that a Trial Phase costs budget includes ‘[d]ealing with draft judgment and related applications’ and that in patents and in other substantial cases, a separate FOOH is ‘entirely normal’.  Thus, as regards the FOOH – properly regarded as Trial Phase costs - it would be for the defendants to convince the costs judge on detailed assessment that there is good reason to depart from given budget.

Judge’s recommendation:  Noting that the FOOH often takes place long after the substantive judgment, and that the cost involved can be hard to predict (because the analysis will depends on precisely which issues have been won and lost)  judge suggested ‘…that parties ought to consider when preparing their costs budgets for substantial cases where a FOO hearing is likely to be heard after hand-down of the substantive judgment, a contingent set of costs of carrying out an analysis of their costs to permit the Court to make an issue-based costs order…’.

Takeaway:  Where a FOOH is normal  - such as in patent, IP, or heavier commercial cases – you must allow for that when preparing your costs budget. 

DeNovo | Legal Costs Experts