Does The Court Have An Unfettered Right To Order Cost Budgets?

Author:Ms Leah Horn
Profession:Nabarro LLP

Summary and implications

The short answer to the question posed appears to be: yes. This answer is in light of a recent decision given by Coulson J at a Case Management Conference review in the TCC.

In CIP Properties (AIPT) Limited v Galiford Try Infrastructure Limited and Others [2014] EWHC 3546 (TCC),  Coulson J considered the court's discretionary powers in respect of applying mandatory cost budgeting in accordance with thresholds set out in CPR 3.12 (both old and new). The case is interesting because the value of the claim on the facts was circa £18m, which was above both the old threshold of £2m (post 1 April 2013 and pre 22 April 2014) and the new threshold of £10m (post 22 April 2014). The judgment therefore focused primarily on the court's discretionary right to order mandatory cost budgets irrespective of the value of the claim, and whether or not that discretion was unfettered.

In summary, Coulson J decided that the Court had discretion to decide whether or not cost budgets should be filed and exchanged. He considered two key questions:

Is there any discretion in this case? Is the discretion fettered? In answer to the first question, Coulson J considered submissions from the parties in respect of the use of the phrase "or the court orders otherwise" in the original CPR3.12. The claimants argued that this wording is intended to allow the Court discretion to disapply CPR3.12 to multi-track cases where it would otherwise apply.

The defendants, and Coulson J, both disagreed with this interpretation stating that the natural meaning of the words, combined with the overriding objective provided the court with the discretion to order that cost budgeting exemptions apply or disapply at its discretion. Coulson J also considered a statement of the President of the Queens Bench Division made on 18 February 2013 in his decision, which stated that even where exceptions apply, cost budgeting should be considered in every...

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