Various Claimants v Mercedes-Benz Group AG & Ors

Costs budgets must reflect work that is reasonably and proportionately required for the issues and evidence actually permitted. In expert phases, legal input should be proportionate to the experts’ own charges and should not approach twice the expert fees without justification. Once expert evidence has been permitted, arguments about its ultimate utility do not determine the budget, although the scope of the permitted evidence and the need to avoid duplication remain relevant. Settlement budgets require a realistic assessment of the likely timing, intensity and structure of negotiations. A standard allowance should not be imposed where the number of claimants, defendants or coordination requirements materially differ.

This first-instance costs management judgment concerned outstanding elements of the parties’ budgets in extensive group litigation concerning vehicle manufacturers and dealers. Earlier costs management hearings had dealt with other budget phases. The court was required to determine the claimants’ and defendants’ budgets for tranche 3 expert evidence and for the second general budget’s ADR and settlement discussions phase.

Permission was ultimately granted for expert evidence in loss assessment, mechanical engineering, software engineering, consumer behaviour, and UK vehicle valuation and/or pricing. The central issues were the reasonable and proportionate level of legal and expert costs after the permitted scope had been reduced, and the appropriate budgets for anticipated settlement work.

1. Budgets and expert evidence. The court allowed the budgets at figures materially below those claimed in several disciplines. The task was to set a global figure for each phase. Hourly rates were not set at the budgeting stage, and detailed arguments based on the time attributable to particular lawyers were therefore inappropriate.
2. Proportionate legal input. In assessing expert phases, the court used the experts’ fees as a starting point and considered an approximately equal level of legal fees generally appropriate. The claimants’ legal input was excessive where it remained materially above that level without adequate justification. The approach was adjusted where the scale, number of vehicles, or complexity of the work justified a higher figure, including for the Mercedes mechanical engineering budget.
3. Scope and utility. The budgets had to reflect the reduced issues and the avoidance of duplicated evidence. Once permission had been granted, however, arguments that the evidence might ultimately prove unhelpful were matters for any later costs order and did not justify refusing to budget for the evidence.
4. ADR and settlement. The court rejected a uniform allowance for non-ALGLO defendants. It considered the likely delay before meaningful negotiations, the compressed period available before trial, the possibility of a framework cascading from lead and ALGLO defendants, and differences in claimant numbers and coordination. Those factors justified differentiated allowances.
5. Orders. The claimants’ tranche 3 experts’ budget was allowed at £5,411,181.65 and the defendants’ at £12,858,057.16. The claimants’ ADR and settlement budget was allowed at £1,625,436, while the defendants’ agreed total of £1,687,074.55 was allowed.

The judgment records earlier costs management hearings, CMH1 and CMH2, and subsequent case management directions concerning expert evidence. No appeal is described.