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 case.

Coulson J's decision in respect of the first question considered only the application of the "old" CPR3.12 and practice direction as that was the applicable law in this case. However he did state obiter that his decision was likely to have been the same if presented with the same question again in respect of the "new" CPR3.12.

In answer to the second question, Coulson J considered that over the mandatory thresholds of £2m and 10m respectively, his discretion was unfettered and therefore there was no additional burden of proof on a party seeking an order for a cost budget in cases valued above this amount.

Conclusion

This decision clearly puts down a marker in respect of cases that exceed the mandatory thresholds for costs budget, and removes any previous assumptions that claims of a higher value may be free from the risk of a cost budget order. It is interesting to note that in this multi-party case, Coulson J was particularly concerned with the potential for mounting costs of Experts, and saw cost budgeting as an appropriate means to bring the costs of this partially into the Court's control.

This decision is also in line with a statement made by Mr Justice Ramsey in April 2013 (when the £2m cap in the TCC was first brought under review) in which he stated that he envisaged the parties would be invited (and possibly ordered) to use cost budgets in all TCC cases in the near future.

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