Interplay between case management and ADR and costs budgets for cases over the cap

In this case, Coulson J considered whether he should agree to order a stay of the proceedings whilst the parties endeavour to resolve the dispute by mediation. Although he was referring to the attitude of the TCC in particular to such requests, his comments might be of more general interest. He said that although the courts do support mediation and other forms of ADR, “it is usually inappropriate for the court at a CMC to build in some sort of special “window” of three or four months in order that the court proceedings can be put on hold whilst the parties engage in ADR”. That is because when setting directions for the trial of a large TCC case, the court will allow a reasonable period between each step in the process to allow parties to engage in ADR. The fixing of the trial date is “one of the critical elements of any CMC in the TCC” and should not be delayed.

The other issue was whether the court had a discretion to order the filing and exchange of costs budgets (pursuant to CPR 3.13) even though the value of the claim (GBP 18 million) was above the mandatory limit for TCC claims (GBP 2 million when the claim was started – and even over the current GBP 10 million limit too).

Coulson J held that the court did have such a discretion. He rejected an argument that the wording of the rules meant that multi-track claims fell outside of the court’s discretion. Furthermore, if that was right, this could lead to an abuse of the process, with parties deliberately framing their claims for higher amounts, and the court would then be unable to consider the proposed costs, no matter how disproportionate or inflated they were. Costs budgets are not automatically required where a case is above the limit principally because the higher the value of the claim, the less likely issues of proportionality will be important or relevant.

Finally, the judge also rejected an argument that the defendant here should be obliged to submit a budget dealing with the defence of the claimant’s claims and then, separately, with the defence of claims being brought by other parties. That would be unfair and would require the defendant to incur significant cost in providing such a breakdown within its costs budgets.