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National Museums and Galleries On Merseyside (Trustees of) v AEW Architects and Designers Ltd [2013]

Posted: in by Michelle Barron.

This case was conducted under the TCC costs management pilot scheme. Revised budgets were filed for the pre-trial review; it was intended that they would be reviewed at the hearing but, in the event, they were not considered. There was no hint from either side that the other’s revised costs budget was objectionable. The Claimant was successful at trial and the Defendant argued that an order for interim payment of costs on account should be determined by reference to the last approved budget. Issues were also raised in relation to the enforceability of the Claimant’s CFA and whether the Claimant should have its costs on a standard or indemnity basis.

Held: (1) The revised budgets were not considered at the PTR because of an oversight by both parties and the Court (Elvanite Full Circle Ltd v AMEC Earth & Environmental (UK) Ltd [2013] EWHC 1643 (TCC) distinguished). There were some obvious reasons why the costs budgets had substantially increased. Had the budgets been considered it was more than likely that a revised budget of at least £1 million would have been approved and this was the appropriate basis on which to assess the interim payment on account. (2) The judge strongly suspected that the CFA was broadly enforceable but it was not appropriate, given the factual differences between the parties and the legal arguments, to assess any interim payment on account by reference to the possible success of the Claimant on this issue. (3) Factors that would have supported a case that costs should be paid on an indemnity basis – the Defendant’s late admissions, failure to admit liability and reluctance to make concessions on quantum – were balanced by the Claimant’s late appointment of an expert and late production of a witness statement, so the Claimant was awarded all its costs but on a standard basis.

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