JSC Mezhdunarodniy Promyshlenniy Bank & Anor v Pugachev & Ors

When a trial expands beyond its estimated duration, the court may increase a party’s costs budget where additional work is clearly required and will assist the court in reaching a just resolution. The court should assess the proposed increase by reference to the work actually required, the reasonableness and proportionality of the rates, and the overall scale of the existing budget. A modest difference between the estimated and precise additional trial length need not justify a reduction where the proposed budget remains reasonable and proportionate.

The claimants applied to increase the costs budget of the twelfth to fourteenth defendants, who were infant children represented by a litigation friend. The trial had originally been estimated to last 8.5 days, including two days of reading, but was expected to take ten days. Written closings would also take place about a week after the oral cross-examination rather than immediately afterwards. The proposed increase was £84,000, covering additional preparation, closing submissions and solicitors’ work. The issue was whether the existing budget was sufficient or whether the additional costs should be approved.

1. The application to increase the infant children’s costs budget was granted in the sum sought. The trial had expanded in length and additional work would clearly be undertaken beyond that originally budgeted.
2. The preparation of written closing documents was capable of assisting the court in reaching a just resolution of the proceedings. It was therefore properly included in the increased budget.
3. The hourly and daily rates charged by counsel and solicitors for the infant children were reasonable and proportionate for the purpose of approving the budget.
4. The proposed budget assumed a two-day increase although the precise additional length was 1.5 days. That difference was not significant in the context of the proceedings, particularly given the existing budget of £1.8 million, and did not require a reduction.
5. The inclusion of correspondence concerning Julia Pugacheva did not justify a discount because it was a minor matter and could not have represented a significant part of the budget.