Red and White Services Ltd v Phil Anslow Ltd & Anor

In costs budgeting, proportionality is assessed by reference to the claim’s financial value and its wider significance, but legal novelty, public importance and reputational concerns do not justify an otherwise excessive budget. The court must consider the recoverable costs risk imposed on the opposing party, rather than simply what a wealthy litigant may choose to spend. Where the court has sufficient information, it should make a realistic overall costs management order, even if the detailed budget cannot be approved as presented. A multi-party claim does not automatically justify aggregating the separate budgets into one total cost risk.

The defendant brought competition law counterclaims and a Part 20 claim concerning leases of bus-station slots. The claim involved alleged infringements under Chapters 1 and II of the Competition Act 1998, with likely damages of approximately £80,000 to £120,000 and potentially wider commercial significance.

At a case management conference, the claimant and third party each proposed future costs budgets of about £1.5 million, while the defendant proposed approximately £288,000. The central issue was whether the budgets were proportionate and what form of costs management order should be made.

1. The court held that the claimant’s and third party’s proposed budgets were disproportionate. The financial value of the claim was relevant, although the case had a higher value than its likely damages alone because of its wider commercial and competition-law implications.

2. Legal novelty could justify a modest increase in a budget, and the interaction between land law and competition law might justify particular expenditure such as two counsel. It could not, however, explain the substantial differences between the proposed budgets. The public-law significance of competition infringements was important but was not a trump-card justification for high recoverable costs.

3. Costs budgeting concerns the level of costs which the opposing party may have to bear if unsuccessful. It is distinct from the amount a party is able, or willing, to spend on litigation or reputation protection. The court therefore assessed each budget separately. The fact that the defendant faced two opponents did not make the aggregate £3 million exposure the relevant measure.

4. The approach in Willis v MRJ Rundell & Associates Ltd and Grovecourt Ltd [2013] EWHC 2923 (TCC) was not adopted on these facts. Refusing to make a costs management order would prolong uncertainty and assist neither side. The circumstances also differed from Wright v Rowland [2016] 5 Costs LO 713, where the court lacked sufficient information to budget all detailed items.

5. Because the difficulty here concerned the overall figures rather than insufficient detail, the court made an approximate overall assessment. It approved future costs budgets of £800,000 for each of the claimant and third party and directed revised budgets accordingly. It regarded approximately £190,000 as a more proportionate incurred-cost figure for the third party, though that was a detail rather than the basis of the principal order.

not stated in the judgment.