The issue of costs budgeting and proportionality was considered by Mr Justice Birss in Red and White Services Ltd v Phil Anslow Ltd & Anor [2018] EWHC 1699 (Ch).  The judge was prepared to take a robust approach to proportionality. There is an observation that the fact that a party has chosen to sue two parties does not impact upon the proportionality of each budget. The judge  was also prepared to reject a comparison with the defendant’s budget when that budget was patently too low and did not make sense.

Costs budgeting is not directly concerned with how much a party can actually spend to protect their reputation either. Wealthy litigants can spend what they like but whether they can recover what they spend from the other party is a different matterThe budget is concerned with recoverable costs.”


The first claimant, a bus company, issued proceedings against the defendant bus company alleging trespass to its bus slots and Cwbran Bus station. The defendant counterclaimed on the basis that this was a competition law claim, the owner of the bus station was brought into the action as a third party. The action was transferred to the specialist competition law list in the Business and Property Courts in Wales.

The court was considering costs budgeting.

  1. Directions to bring all this about have been given today, with one issue left over which this judgment is concerned with. It is an important one – costs budgeting. That has been the major dispute between the parties and it is easy to see why. The defendant’s budget is for £288,000 to bring this case to trial including £103,000 of incurred costs. The claimant’s and the third party’s budgets are each of £1.5 million to bring the matter to trial in the same way. The claimant’s incurred costs are about £100,000, similar to the defendant’s. The third party’s incurred costs are £348,000.
  2. The defendant submits that the claimant’s and the third party’s budgets are seriously disproportionate, given that the damages in this claim are likely to be in the region of £80,000 to £120,000. The defendant recognises that competition law cases in general can cost as much as its opponents have budgeted for, if not much more. And the defendant also accepts that experienced parties, looking at the resolution of the issues of the same kind which this case raises, may well produce figures of the order of the budgets in this case. But the defendant also emphasises that in general, competition law cases are worth much more than this case in financial terms. They are very often worth more than £10 million and therefore costs budgeting does not apply.
  3. The defendant takes some specific points but they are minor. The defendant’s real case is about proportionality relative to what is at stake. The defendant submits that this is a case of modest value being brought by a modest company. It ought not to be impossible for a company like the defendant to be able bring a claim of this kind before the courts. Access to justice is what would be at risk with budgets of the kind put in by the claimant and the third party.
  4. Turning to the budgets before me, there are striking differences in the costs budgets as is apparent simply from the totals. In detail, there are major differences at the level of disclosure and experts and in the total trial costs. A useful schedule was produced by the claimant’s counsel and a copy is appended to this judgment.


The judge then considered the issue of proportionality and the costs budget.
  1. First, I will consider proportionality. As Coulson J did in Willis, it is relevant to compare the financial level of the claim against the costs in the budgets. When I do that here, I note that for a claim with a quantum of about £80,000 to £120,000, even the defendant’s own budget is disproportionate. The defendant’s budget is to spend £288,000 to catch £80,000-£120,000. It is also notable, as the claimant and the third party have pointed out, that the defendant’s initial costs budget in these proceedings, which was provided in October of last year, was for about £400,000. Now, commendably, the defendants have sought to reduce their costs, hence the current estimate. What this all goes to show, simply based on the way the defendant is approaching the matter, is that one cannot simply look at this dispute as a money claim for £80,000 to £120,000. The claim has a higher value and greater significance than can be seen simply by focussing on the likely quantum of damages.
  2. Turning to the claimant’s and the third party’s characterisation of this case, I do not doubt that the land law issues are potentially legally novel. Now that land agreements are within the purview of competition law, that is inevitable. Nevertheless the fact is that modest value cases often raise legally novel issues which may have far-reaching implications. While that may well justify a modest increase in a costs budget, it does not seem to me that it is a factor which can be used to justify the very substantial differences between the budgets for the parties here. Putting it another way, legal novelty is not a good explanation for high costs. I accept that the land law/competition law interaction may well support the idea for two counsel. That could be a justification for a very specific aspect of the budget. However as a general point across the board, I do not accept that this argument has significant traction.
  3. I also accept that this case may have wider significance for the parties’ bus services and possibly wider significance for the bus industry as a whole, although I think that is a little overdone.
  4. Focussing in the third party, I accept the point made by Mr Rayment, that this claim has significance from the point of view of its business as an investor in land and property. Nevertheless investors in land now have to take at least some cognisance of the fact that land agreements are no longer exempt from competition law. They will have to get used to it.
  5. Also, of course I accept that infringements of competition law have a public aspect. That is a very serious matter. However the seriousness of competition law infringements, which they undoubtedly are, cannot be used in and of itself as a form of trump card justification for a very high budget. The significance of approving a budget is that the costs are more likely to be recoverable from the losing party. Thus a very significant aspect of budgeting is concerned with the other party’s cost risk. That is obviously something of concern to the defendant in this case. I emphasise that the defendant, in terms of this competition claim, is really the claimant in the competition claim.
  6. Costs budgeting is not directly concerned with how much a party can actually spend to protect their reputation either. Wealthy litigants can spend what they like but whether they can recover what they spend from the other party is a different matter. The budget is concerned with recoverable costs. In other words it addresses how much a party can spend whereby the other party then has to bear the costs risk that they might have to pay a figure of that order if they lose the action. As I have said, I recognise the wider issues raised by the claimant and the third party but I am concerned that that point cannot go too far in a case which is in the end about one bus station in one town in Wales for which the financial consequences are of the order of £80,000 to £120,000.
  7. One further aspect I will mention at this stage is the multi-party factor. In this claim, the defendant has brought competition claims against both the claimant, Red and White, and the third party, The Prudential. It is a matter for the defendant to have chosen to join both of those independent companies and therefore the fact that the two budgets together, each of £1.5 million, mean that the defendant could be bearing a cost risk of £3 million, does not seem to me to be a matter of great significance on the facts of this case. The individual budgets are the figures I need to consider, not the net risk to the defendant of aggregating the two.
  8. Taking into account the value of this claim in money terms and also taking its overall significance into account, in my judgment, a costs budget of £1.5 million is not just on the high side, it is disproportionate. It is and should be possible for a competition law claim about a bus station to be tried at a more modest costs level than that. Costs proportionate to the issues in a claim like this ought to be lower. The question which needs to be grappled with is what to do about that.
  9. I am not at all attracted by the Precedent R produced by the defendant which seeks to set the claimant’s and the third party’s budgets by reference to the same level, more or less, as the defendant’s budget. The defendant’s budget is too low and is not a good guide. For example, the defendant’s budgeted figure for disclosure just does not make sense and, as I have mentioned already, the figure for experts seems to be surprisingly low. Mind you, the very, very high figure for the expert to be shared by the claimant and the third party also seems to me to be entirely disproportionate. The only reason I do not add the word “surprisingly” is I have seen how much expert economists can charge in competition law cases, but that does not mean that it is always proportionate to do so.
  10. Simply to send this case away on the footing that the costs budgets are disproportionate helps nobody. Also, simply to decline to make a costs management order also helps neither side and, indeed, in some ways could just make the situation worse by prolonging uncertainty. I have considered whether the course I should take is to budget some figures but not others. That would be appropriate if the situation was like the one before Flaux J. The problem there was that the court did not have the information necessary to be able to budget all the detailed figures in the proposed budgets. That is not the problem that the court is faced with here. The problem in this case is about the overall figures, not the detail.
  11. It seems to me that if the court can come up with an overall figure which is appropriate, then that is the course that the court should take. In doing that I must bear in mind what is at stake, both in terms of the quantum but also, and very importantly, the other wider issues that particularly the claimant and the third party have emphasised. Also, for what it is worth, I should take account of my own experience of high value, commercial litigation of various sorts. I also take into account the defendant’s initial budget estimate, which was for £400,000. That gives some indication of what might have been thought by the defendant to be a proportionate sum in costs for this dispute, at least at one stage.
  12. Turning to particular items the claimant’s and the third party’s budgets, the figure in the claimant’s budget for £633,000 for a trial seems, I must say, really much too high. Even the figure for £400,000 for the trial from the third party looks high. It also seems to me that the figure for disclosure in the third party’s budget of £100,000 is a much more realistic figure for a case like this, bearing in mind what I am thinking about all the time is proportionality, than the £267,000 odd in the claimant’s budget.
  13. Inevitably, in order to do this, the court cannot do anything other than take quite an approximate approach to estimating a proper overall level for the future costs of one party. In my judgment the appropriate overall figure in this case for the claimant or the third party should be £800,000. That is double the initial estimate from the defendant and that is what I will do.
  14. I will also make one further observation about the incurred costs of the third party. They are about £348,000. I accept the submission from Mr Rayment that the third party had more to do at a pre-action level than either the claimant or the defendant for a number of reasons which I do not need to get into. Nevertheless the incurred costs are high. It seems to me that a figure which would be more realistic for a proportionate incurred costs figure for the third party is one arrived at by taking the incurred costs figures of about £100,000 for the claimant (or the defendant) and then adding the pre-action costs incurred by the third party, which is £87,000 odd. Putting those two figures together and rounding produces £190,000. That seems to me to be a more realistic and proportionate figure for the incurred costs of the third party, but that is a point of detail.
  15. That is my decision. We will discuss how that decision will be put into effect in a minute.