High Court approves increase to defendants’ £1.8m costs budget

Budget: increase not that large in context of overall sum

The High Court has approved an increase to defendants’ costs budget against the opposition of the claimants, a rare reported example of an application for variation.

Since the introduction of costs management, judges have complained about the lack of such applications.

Mr Justice Birss’s decision in JSC Mezhdunarodniy Promyshlenniy Bank & Anor v Pugachev & Ors [2017] EWHC 1853 (Ch) is part of significant litigation following the insolvency of the claimant Russian bank brought against the defendant oligarch and various others, including his children as beneficiaries of certain trusts.

The children, by their litigation friend, applied to increase the costs budget for the children after the estimated length of the trial expanded from 8.5 days to 10 days for various reasons. The children sought extra costs of £84,000.

Birss J said: “When I first saw that figure, I was rather surprised. It seemed to be a lot of money. But when I bear in mind that the budget for the infant children fighting this trial is £1.8m, it is still a lot of money, but, in proportionate terms, not as much as it might have appeared.”

The claimants argued that all the work that needed to be done should be covered by the existing budget.

“I do not agree,” said the judge. “It is clear that more work will be done than was originally budgeted for.

“It is also clear that that extra work, in particular the time spent preparing the written closings, is work which will ultimately assist the court in coming to a just resolution of these proceedings. I should approve an increase the infant children’s budget accordingly.

“I am satisfied that the hourly rates being charged and the daily rates by counsel and the solicitors for the infant children are reasonable and proportionate, at least for the purposes of approving a budget.

“It could be said that the increase is somewhat generous because it was prepared assuming the increase in trial length was two days whereas, to be precise, the extra length of the trial is 1.5 days, but in the overall scheme of things, I do not regard that as a significant difference.”

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