CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd & Ors

In substantial TCC litigation, the court should ordinarily facilitate ADR through a sensible trial timetable rather than impose a lengthy stay or dedicated ADR window. A stay or window is likely to cause delay, additional cost and uncertainty, particularly where a significant party opposes it. Sensible case management takes priority where ADR arrangements conflict with preparation for trial.

Under the former CPR costs-management regime, the court had power to order costs budgets in cases exceeding the applicable monetary threshold. That discretion was unfettered. There was neither a presumption against ordering budgets in high-value claims nor an additional burden on the applicant. The court must assess all the circumstances. In multi-party litigation with overlapping issues, separate budgets for each claim or contribution claim need not be ordered where allocation of common costs would be impractical and disproportionate.

The claimant, as assignee, brought an approximately £18 million defects claim concerning a large development. The main contractor issued third-party proceedings against architects and specialist subcontractors. At a review case management conference, the court considered two issues of principle.

1. Whether the proceedings should include a four-month ADR window before disclosure.
2. Whether the court could order filing and exchange of costs budgets under the CPR provisions applicable when the proceedings were commenced, and if so whether that discretion was restricted by the monetary thresholds.

The court also considered whether a defendant in multi-party proceedings should provide separate budgets for its defence and its claims over against third parties.

1. ADR and case management. A sensible trial timetable should allow parties to engage in ADR between procedural steps, while preserving progress towards a prompt fixed trial date. A lengthy stay or special ADR window unconnected with trial preparation will ordinarily delay the trial, increase costs and create uncertainty. It is particularly inappropriate where a significant party opposes the proposed timing, because mediation is consensual. The court declined to impose the proposed four-month window before disclosure.
2. Power to order costs budgets. On the proper construction of the original CPR 3.12(1), the words permitting the court otherwise to order enabled it both to disapply the costs-management regime and to disapply the relevant exemptions. The reference to “any other proceedings” included multi-track proceedings. The court therefore had jurisdiction to order costs budgets even though the claim exceeded the applicable £2 million threshold. The same construction would produce the same result under the amended rule, although the judge expressed reservations about the drafting of the new provision.
3. Nature of the discretion. The discretion under CPR 3.12(1) was unfettered. The court had to weigh all the circumstances. There was no presumption against ordering budgets in claims above the applicable threshold, and no additional burden on the party seeking the order. Nor did the February 2013 Statement create a presumption in favour of making an order.
4. Multi-party budgets. The defendant need not ordinarily divide common costs between its defence and overlapping claims against third parties where doing so would be impractical, expensive and contrary to the overriding objective. Separate budgets should not automatically be required where issues and costs are common.

The points of principle were decided against the claimant. The detailed question whether budgets should be ordered was left for further argument if the claimant maintained its opposition.

First-instance decision. No appellate history is stated in the judgment.