Earlier in the year we told you about possible changes to the costs budgeting rules in the courts of England and Wales, in particular the application of those rules to cases proceeding in the Technology and Construction Court ('TCC') (Click here for more information). The position from 1 April 2013 had been that any case issued in the TCC with a value of up to £2m would fall within the Civil Procedure Rules' costs management regime, but this limit had been under discussion through the latter half of 2013.
Central to the regime is the drawing up and filing of a costs budget which provides a detailed breakdown of how much each party anticipates spending at each stage of the litigation and, subject to any tinkering by the court, should broadly reflect what the party entitled to costs could be expected to recover from the other side. Budgets have to be filed prior to the first Case Management Conference, which is relatively early in the court process. A failure to file a costs budget in time led to yet more notoriety for the Mitchell v News Group Newspapers Ltd case when Mr Mitchell was refused permission to seek anything more than his court fees as a result.
Recently, the £2m exception has been narrowed quite significantly. For claims issued from 22 April 2014, it is only those where the value is in excess of £10m where the parties will escape the clutches of the costs management regime.
This seems to be a strong message that costs management is working, is desirable and should be engaged in meaningfully by the parties to litigation. With such a leap in the limit of the exception it is now only the truly exceptional, highest value claims in which the courts will not automatically seek to impose it. Even in such cases, it is likely that the courts will still pay an interest in costs and can order the parties to comply with a similar regime, but it could be argued that the nature of such cases mean that almost any reasonable legal cost will still be proportionate to the sum at stake, which when combined with the almost inevitable unpredictability and dynamic nature of such cases, mean other means of costs control might be more appropriate.