Proportionality and budget comparisons

Budgets were once again considered in the case of Red and White Services Ltd v Phil Anslow Ltd & Anor [2018] EWHC 1699 (Ch). This was a competitions claim about a bus company and its parking bays. In summary, the Claimant had the use of more parking bays than the Defendant, the Claimant sued the Defendant for trespass and the Defendant in turn brought, by way of a counterclaim, a competitions Act law claim against the Claimant and pursed a Part 20 Competitions Act claim against the Third Party.

All parties were ordered to prepare budgets with the Claimant’s and Third Party’s budgets being in similar amounts, each in the region of £1.5 million; and the Defendant’s budget coming in at just less than £300,000.00.

The Defendant not surprisingly submitted the Claimant’s and the Third Party’s budgets were seriously disproportionate, given that the damages in this claim were likely to be in the region of £80,000 to £120,000.

Mr Justice Birss commented that “It is essentially, although these are my words not counsel’s, an attempt to create figures for costs which are unrealistically low for the purpose of budgeting and to act as an unfavourable contrast to the figures from the claimant and the third party”

He considered proportionality and commented…

“I do not regard the budget costs figures in this case as proportionate or reasonable, particularly given the relatively limited nature of the disputes between the parties. The individual dispute which is worth the most is the overpayment/overvaluation claim. That will involve some quantity surveying evidence, although experience of such disputes leads me to suspect that this will not necessarily be extensive: the various valuation items in issue will probably fall into a handful of types or categories, so that once an expert has addressed the leading items in each category, there will be little left for the expert to do. The defects are a relatively modest element of this claim, so that even if they required both M and E and architectural experts, the involvement of such experts ought to be relatively limited.

He further commented that ..

“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.”

The judge, after applying the proportionality test and refusing to make comparisons with the Defendant’s budget, approved budgets for the Claimant and Third Party each in a sum not exceeding £800,000.00.

Any questions? Please contact me at sue.fox@clarionsolicitors.com or call me on 0113 336 3389.

 

 

 

 

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