Associated Newspapers Ltd v Buckingham Group..., 2022 WL 16639467...

For educational use only

Associated Newspapers Ltd v Buckingham Group Contracting
Ltd
Buckingham Group Contracting Ltd v AmTrust Europe Ltd

No Substantial Judicial Treatment

Court
King's Bench Division (Technology & Construction Court)

Judgment Date
2 November 2022

Where Reported
[2022] EWHC 2767 (TCC)
[2022] 11 WLUK 26
Judgment

Subject
Civil procedure

Other related subjects

Construction law

Keywords
Breach of contract; Construction claims; Costs budgets; Costs management; Fees; Rules of court; Solicitors' remuneration

Judge
Roger ter Haar KC

Counsel
For the claimant: Lynne McCafferty KC, Daniel Churcher.
For the defendant and part 20 claimant: Ben Patten KC.
For the third party in relation to insurance matters: Neil Hext KC.
For the third to sixth parties in relation to Collier Defence matters: Simon Henderson.
For the fourth to sixth parties in relation to insurance matters: Robert Stokell.

Solicitor
For the claimant: Baker & McKenzie LLP.
For the defendant and part 20 claimant: Weightmans LLP.
For the third party in relation to insurance matters: Womble Bond Dickinson LLP.
For the third to sixth parties in relation to Collier Defence matters: Keoghs LLP.
For the fourth to sixth parties in relation to insurance matters: DAC Beachcroft LLP.

Case Digest
Summary
In a £10 million claim for breach of a construction contract, the court declined to approve the claimant's costs budget, finding
it to be disproportionate. The budget included solicitors' hourly rates that were significantly in excess of the guideline rates,
and although the claimant was free to use expensive lawyers, its legal team would need to consider the extent to which work
could be delegated to more junior fee earners.

Abstract

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Associated Newspapers Ltd v Buckingham Group..., 2022 WL 16639467...

In a claim for breach of a construction contract, the court was asked to approve the costs budgets of the claimant and the third
to sixth parties.

The claimant, a newspaper publisher, had engaged the defendant building contractor to design and build a warehouse and
production unit. After practical completion, damage was discovered which, the claimant asserted, was caused by the differential
settlement of concrete slabs. The parties were unable to agree the extent of the settlement. Further, the defendant argued that any
liability it might have had been incurred because the civil engineering company to which it had delegated the engineering design
task had not exercised reasonable care and skill. It sought indemnities from the engineering company and its insurers (the third to
sixth parties). The claim had been listed for a 12-day trial, was relatively complex, and was likely to be worth about £10 million.

Held
Directions given.

Costs budgets: applicable principles - The following principles, derived from CPR r.3.15, r.3.17 and CPR PD3E, were to
be applied:

• Where costs budgets had been filed and exchanged, the court was to make a costs management order unless
satisfied that the litigation could be conducted justly and at proportionate cost without such an order.
• The court was not to approve costs incurred before the date of any costs management hearing, but it might
make comments and take those costs into account when considering the reasonableness and proportionality of
the budgeted costs.
• A costs management order had to record the extent to which the budgeted costs were agreed between the parties
and, in respect of unagreed budgeted costs, it had to record the court's approval after making appropriate revisions.
• When reviewing unagreed budgeted costs, the court would not undertake a detailed assessment in advance, but
would consider whether the budgeted costs fell within the range of reasonable and proportionate costs.
• A costs management order concerned the totals allowed for each phase of the budget, and while the underlying
detail was provided for reference, it was not the role of the court to fix or approve the hourly rates claimed in
the budget. However, it was relevant to have regard to the hourly rates of different fee earners to see whether the
proposed deployment of the legal team was reasonable and proportionate, subject to avoiding any temptation to
micromanage the expenditure or costs, Yirenkyi v Ministry of Defence [2018] EWHC 3102 (QB), [2018] 5 Costs
L.R. 1177, [2018] 11 WLUK 53 applied.
• Most costs budgeting reviews should be carried out quickly and with a fairly broad brush, and only exceptionally
would it be necessary or appropriate to go through Precedent H with a fine tooth-comb, GSK Project Management
Ltd (In Liquidation) v QPR Holdings Ltd [2015] EWHC 2274 (TCC), [2015] B.L.R. 715, [2015] 7 WLUK 918
applied (see paras 32-35 of judgment).

Insurers' costs budgets - The insurers' costs budgets would be approved. They had been agreed as between the insurers
themselves and as between the insurers and the defendant, and although the claimant had not agreed them in terms, it did not
challenge them. Each of the budgets was significantly less than the claimant's (paras 29-31).

Claimant's costs budget - The claimant's budget exceeded that of the defendant by a significant margin. The most important
difference was that the hourly rates charged by the claimant's solicitors were higher than those charged by the defendant's
solicitors and were higher than the guideline rates. For instance, the claimant's budget claimed a partner Grade A fee earner's
hourly rate of £801, whereas the guideline rate was £512. There were also differences between the number of hours that each
party thought it reasonable to expend upon disclosure, witness statements, experts, the pre-trial review, trial preparation and
the trial. Although the claim involved the claimant's principal printing works and was therefore of some importance to it,
its estimated costs were disproportionate and should be reduced by about 15%. While the claimant was free to make use of
expensive and experienced lawyers, its legal team would need to consider the extent to which work could be delegated to
more junior solicitors, or to members of the Bar who were likely to charge lower hourly rates than the firm's Grade B and

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Associated Newspapers Ltd v Buckingham Group..., 2022 WL 16639467...

Grade C Senior Associates. Reductions would not be allocated on a phase-by-phase basis, but the claimant would be given the
opportunity to come back with a revised budget (paras 36-52).

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