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Cost budgeting

23 May 2012

How would you feel if you were told “the good news is that you won your case against The Sun but the bad news is that you are now £300,000 out of pocket?”. Well that’s what happened recently to a successful Claimant after she succeeded in her defamation claim against the newspaper.

Both parties were obliged to provide the court with their budget for the litigation. The litigation took many twists and turns and the costs escalated. The Claimant’s solicitors did not update their costs schedule and when it came to assessing costs the costs judge would not depart from the budget, leaving the Claimant substantially out of pocket.

Currently cost budgeting only applies to defamation cases and cases in the Mercantile and Technology and Construction Court but going forward will apply in higher value cases. Cost budgeting is a valuable tool allowing both parties to cost out the commercial worth of litigation. This case shows the importance of getting the maths right!

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