Budget Realism or Bust
Back in 2013 I asked Lord Justice Jackson which one of the 108 reforms that year he considered to be the most significant. Without missing a beat he said “Costs management”.
There was an early panic as a result of the ghastly decision in MITCHELL V NEWS GROUP NEWSPAPERS LIMITED (2013) EWCA Civ 1537. Sir Rupert had nothing to do with that case but was blamed for it. Fortunately, the Court of Appeal, with Jackson LJ sitting, relented in DENTON V WHITE (2014) EWCA Civ 906.
Coming bang up to date, all litigators need to take note of important guidance hidden at page 200 of the First supplement to the sublime 2025 White Book.
“It can no longer be safely assumed that costs management is a costs neutral process. Parties who pursue unreasonable or unrealistic claims for costs or fail to take reasonable steps to agree budgets or make reasonable offers in respect of the costs, may be the subject of adverse costs awards (whether or not Calderbank or other admissible offers have been made or beaten)” (my emphasis).
This has obviously been triggered by the decision of Constable J in GS WOODLAND COURT GP 1 LIMITED V RGCM LIMITED (2025) EWHC 285 (TCC). Whilst the starting point is accepted to be that the appropriate order on a budgeting hearing is costs in the case, the claimant here was clearly on the wrong side of the line. Some hours claimed were declared “implausible” and a budget of £8.74m was slashed to £4.2m. Consequently, C was denied costs and was ordered to contribute to the costs of the 4 defendants.
It is imperative that budgets be realistic failing which costs sanctions will surely follow.
Professor Dominic Regan
18.09.2025