David Parsons v Convatec Limited

In costs budgeting, the court approves only costs that are both reasonable and proportionate on an inter partes basis. The exercise concerns the reasonable and proportionate range for each phase, rather than a detailed assessment in advance or an arithmetical exercise based solely on hourly rates. Comparisons between parties’ budgets may assist but cannot determine the result, because the parties may face different tasks or adopt different litigation approaches. Incurred costs may inform the assessment of future costs, although their reasonableness is generally better determined on detailed assessment. The court may allow specialist and senior resources where litigation justifies them, while making broad-brush reductions for luxury, duplication, excessive hours or unnecessary attendance.

The claimant brought a substantial claim under Patents Act 1977, section 40, concerning entitlement to a payment said potentially to be worth up to £366 million. The claim concerned seven patent families and 73 patents, with a 27-day trial listed for 2027. The parties agreed that costs budgeting was appropriate.

The claimant challenged aspects of the defendant’s incurred and estimated costs, including its use of senior fee-earners, specialist intellectual-property counsel, disclosure resources, witness-statement preparation and trial attendance. The defendant challenged the claimant’s disclosure estimate. The judgment assessed the budgets on the assumption that section 106 of the Act had no effect, with that issue reserved for a separate judgment.

1. The court applied the principles summarised from Various Shared Appreciation Mortgage Borrowers v BOS [2022] EWHC 254 (Ch). Agreed phase figures could be recorded, while disputed phases required review and approval only to the extent that the costs were reasonable and proportionate.

2. Reasonableness and proportionality were separate questions. The court approached both from an inter partes perspective. A high hourly rate did not by itself make costs unreasonable or disproportionate, but the use of an expensive firm remained relevant. Incurred costs could be considered, without conducting their detailed assessment at the budgeting hearing.

3. Under Various Claimants v Scott Fowler Solicitors [2018] EWHC 1891 (Ch), the court assessed each phase by reference to a reasonable and proportionate range. It was not required to examine every constituent item or select the lowest possible figure. Comparisons between budgets were informative but not determinative. Different disclosure burdens, specialist patent issues and the claimant’s expansive case justified substantial differences between the parties’ budgets.

4. The defendant’s budget was reduced where the estimates contained an element of luxury, excessive senior involvement, top-heavy staffing, overlap with counsel or disproportionate attendance at trial. The court adopted a broad-brush approach rather than attempting to quantify every item of residual work.

5. The defendant’s costs were approved at reduced figures for the CMC, disclosure, witness statements, PTR, trial preparation and trial attendance. Expert evidence budgets were agreed on the assumption of one expert and could be revisited if the May CMC altered that assumption. The claimant’s disclosure budget was reduced from £859,500 to £650,000. Section 106 was left for separate determination.