Pontis Finance LLP v Karam, Missick & Traube LLP

Costs budgeting must assess the overall figure for each phase, rather than mechanically approve or reduce individual hourly rates, hours or disbursements. Proportionality depends on the factors in CPR 44.3(5), including value, complexity and other relevant features. A high hourly rate does not necessarily make a phase disproportionate if the overall phase figure remains reasonable. The court should preserve flexibility by fixing totals rather than micromanaging the work. Where rates are excessive, a broad-brush downward adjustment may be made to the phase total. The reasonableness of using leading and junior counsel, and the level of their fees, must also be assessed by reference to the nature and value of the case as a whole.

The claimant brought an approximately £1.2 million claim against the defendant solicitors arising from a loan transaction allegedly involving an impostor borrower. The claims included breach of duty, breach of undertakings or warranties and breach of trust. The court had previously directed revised costs budgets following a costs and case management hearing.

Because of delay, some phases had become incurred costs and could no longer be budgeted effectively. The court therefore determined the outstanding costs budgets, principally for trial preparation and trial, addressing proportionality, solicitor rates, counsel fees and the attendance of both leading and junior counsel.

1. Costs budgets. The court declined to set budgets for disclosure, witness statements and settlement/ADR where it could not reliably distinguish incurred from future costs. It set budgets for trial preparation and trial, while recording agreed figures for the defendant’s corresponding phases.
2. Proportionality. Under CPR 44.3(5), proportionality is not determined solely by the monetary value of the claim. Complexity and the other listed factors must also be considered. The claim was worth approximately £1.2 million and was not heavy commercial litigation. It was expected to turn substantially on the facts, with a five-day trial estimate.
3. Rates and phase totals. Under CPR 3.15(8), the budgeting court fixes total amounts for each phase, not hourly rates. The rates and hours may nevertheless inform whether the overall phase figure is reasonable and proportionate. The court should avoid micromanagement and preserve the party’s flexibility as the case develops, consistently with Yirenkyi v Ministry of Defence [2018] EWHC 3102 (QB) and GS Woodland Court GP1 Ltd v GRCM Ltd [2025] EWHC 285 (TCC).
4. Counsel and attendance. It was reasonable to brief both leading and junior counsel and to have the Grade A solicitor with principal conduct present at trial. The aggregate brief fees of £90,000 were disproportionate. Four refreshers were excessive for the listed trial because the brief fee covered the first day in court; three refreshers were appropriate.
5. The claimant’s overall figure of £489,891.31 was outside the reasonable and proportionate range. The court fixed the trial preparation budget at £115,000 and the trial budget at £50,000.