Bromcom Computers PLC v Arbor Education Partners Limited & Ors

MASTER DAGNALL: In this matter, I now have to consider costs management. Under the provisions of Civil Procedure Rules 3.15(2), the court makes a costs management order unless the court considers that the case can be conducted in accordance with the overriding objective and at proportionate cost without making one. In view of various reductions which I propose to make to the parties' budgets, it seems to me that that negative condition is not satisfied and therefore that I should make a costs management order.

I will be making it in my usual form of providing that “The court makes a cost management order and” that, in relation to each party's budget respectively, estimated costs are approved or agreed in a particular total figure which, together with incurred costs which are not agreed, results in an overall figure; and that the parties will each file and serve a revised first page of their precedents H to accord with their agreements and the court's approval and judgment by 4.30 pm on [a week on Friday, which I think is] 27 February 2026.”

"When reviewing budgeted costs, the court will not undertake a detailed assessment in advance, but rather will consider whether the budgeted costs fall within the range of reasonable and proportionate costs."

In coming to my conclusions, I considered fully the written and oral arguments which have been advanced by each of the parties.

"In deciding the reasonable and proportionate costs of each phase of the budget the court will have regard to the factors set out Civil Procedure Rules 44.3(5) and 44.4(3) including a consideration of where and the circumstances in which the work was done as opposed to where the case is heard."

"... resolve any doubt which it may have as to whether costs are reasonably and proportionately incurred or were reasonable and proportionate an amount in favour of the paying party."

"Costs incurred are proportionate if they bear a reasonable relationship [to a number of matters]."

Subrule (a) is "the sums in issue in the proceedings". Those are said by the claimant's side to be slightly over £4 million. The defendants' side points out that the claimant's case is framed on some version of a loss of a chance basis, albeit that the claimant would say that the chance in question would be a very high one.

I further note, in particular, that the claimant's cost budget is close to although not as much as £4 million and the defendants' costs budget is close to although as not as much as £3 million, which I have borne in mind in relation to “the sums in issue in the proceedings”, although that is not the only matter to which the court has regard when considering proportionality under CPR 44.3(5).

Subrule (b) is "the value of any non-monetary relief in issue in the proceedings" which does not arise as such.

Subrule (c) is "the complexity of the litigation". There are various disputed facts in the litigation and various heavy disputes as to law which may or may not be resolved in whole or in part by a strike-out and summary judgment application due to be heard later this year. I have to proceed in terms of costs management, it seems to me, on the basis that they will not be resolved then.

Further, there are within the claimant's case accusations of fraud against the defendant, which it does seem to me adds potential further factual complexity to the litigation since it involves not merely serious allegations but also questions of subjective beliefs of various individuals from time to time.

Subrule (d) is "any additional work generated by conduct of the paying party", which does not seem particularly to arise.

Subrule (e) is "any wider factors involved in the proceedings, such as reputational or public importance". Here, the fact that there are allegations of fraud potentially impact on reputation. The facts that the case involves the question of whether, firstly, in a public procurement exercise, the successful party engaged in misrepresentation or deceit; and secondly, as to what should be the consequences of that in relation to those who did not succeed in the procurement exercise, are matters which it seems to me are of some, albeit limited, public importance.

Subrule (f) is additional work due to vulnerability, which does not appear to arise in this case.

Under CPR 44.4, it is provided that the court will have regard to all the circumstances in deciding questions of proportionality and reasonableness. Under CPR44.4(3), to which the Practice Direction draws my specific regard, it is provided that the court will also have regard to a number of matters.

Subrule (a) is "conduct" which does not seem particularly to arise here at this point.

Subrule (b) is "the amount or value", which I have already dealt with.

Subrule (c) is "the importance of the matter to all the parties", where the claimant says that they have been deprived of a very considerable amount of business and value and the defendant points to the fact that fraud is alleged against them.

Subrule (d) is the particular complexity of the matter or difficulty or novelty of questions raised, which I have already dealt with; although it seems to me also that this is something of a novel claim, in circumstances where I have not had drawn to my attention any authority dealing with a claim of this precise nature.

Subrule (e) is "the skill, effort, specialised knowledge and responsibility involved"; where it seems to me that this is somewhat specialist commercial litigation, although not in a particular specialist area such as ships and aircraft, albeit that this is in a public procurement context which has its own particular legal regime and features.

Subrule (f) is "time spent on the case"; and subrule (g) is "the place where and the circumstances in which work or part of it is done".

The claimant's side has sought to emphasise complexity, which I have taken into account, although it does seem to me that the dispute is to an extent within a limited compass, only involving one, or possibly two, categories of experts. Nonetheless, it is one which has also to be seen in a context where the claimant's (at least) position is that there is a very considerable number of documents which have to be considered as well as witness evidence.

The court in costs management is not in any way fixing solicitors' rates, but does have to bear in mind the calculations which are used in the cost budgets to justify the eventual total figures. Mr Krsljanin, counsel for the defendant, points out that the claimant solicitors' hourly rates are somewhat above the guideline rates for London 1 cases, although he did not go so far as to suggest that this particular litigation is simply within the London 2 category rather than London 1.

I, of course, am not making any decision as to within what category this litigation falls, although it does seem to me that it is somewhat difficult to say that its value takes it within the London 1 categorisation of “very heavy commercial and corporate work”.

In the circumstances, it seems to me that the figures used are somewhat high and that I ought to consider that in terms of making reductions to various sums sought on the claimant's part.

Nonetheless, I am simply carrying out a holistic exercise in relation to each phase in considering what is a reasonable and proportionate figure for that party for that phase. I emphasise "that party for that phase" because, although the court does have regard to the other side's cost budget under the case law, the court also has to bear in mind that different considerations may affect each party. For example, one party may have a large number of documents which it needs to review, even though it may only provide a limited number of them as part of the disclosure exercise to the other side who will only have to review that limited number, whereas the other side may only start off with a much more limited global number of documents to review on their part.

Similar points can arise in relation to witnesses where one party may have to spend a great deal of work in terms of producing its side's various witness statements with the other side only having to spend a more limited amount of work reviewing them whilst only having had to spend a limited amount of work and time in producing its own witness statements.

Turning to the particular phases in this case, the pre-action costs are all incurred and so I simply record them and say no more about them.

As far as the issues/statements of case phase is concerned, the claimant seeks a figure of £109,100. That is said to be required effectively to keep the position under review and to provide continued advice to the client. Further, Mr Burton, counsel for the claimant, says that it is likely that at some point or other there will be amendments to the claimant's statement of case and indeed that there is currently some communication and discussion regarding, proposed amendments.

Mr Krsljanin responds to say that this is simply not appropriate as a matter of cost budgeting. The court has not so far directed that there should be any further statements of case, and advice should fall within each phase and event as set out in the various phases rather than having some general figure included within the issue of statements of case phase.

With regards to that latter point, I appreciate that there is some discussion within the profession and costs lawyers as to how the concept of continuing advice should be dealt with. But it seems to me in the circumstances of this case that it is much more appropriate to effectively build it into the various phases which are continuing under court orders rather than to create some artificial figure within the issue and statements of case phase.

However, it seems to me that I should accede to, Mr Krsljanin's submission, but on a particular recited basis.

At the moment, there is no direction by the court for there to be any further steps taken within the issue/statements of case phase. That, as a starting point, would seem to suggest that I should not be budgeting for any figures within it. I am reinforced in that view by what seems to me is the impossibility of coming to any sensible calculation or appreciation as to what work might in the future be done. It seems to me that that is a wholly speculative exercise on the basis of the material before me.

Further, if the court was considering any amendment to any statement of case, the court would be likely to be considering a costs order at the same time, and where, at least according to the Practice Direction to CPR Part 44, a common order which is made in the case of amendments is that the amending party has to bear the costs of and occasioned by the amendment rather than being able to ever seek them from the other side.

It seems to me, having considered the matter altogether, that I simply should not be budgeting for any further statement of case. I do not, however, wish to prejudice the claimant in relation to costs inadvertently by coming to that conclusion. So what I propose to do is to allow nothing in that particular category, but to include a recited assumption that it is assumed that no further work will be done in the issue/statements of case phase. If it subsequently turns out that something is then done then I can consider it in due course. The advantage of the recital is that it will assist whoever is proposing to do the relevant work in terms of arguing that there has been some significant development which should result in a further cost budgeting revision exercise.

I then come on to the CMC phase. Here, I have directed a further case management conference to take place later this year, but specifically to deal with a proposed or actual disclosure application with regards to various contractual documents and, if such is made or pursued, an application by the claimant for an additional permission in relation to expert evidence and the adducing of evidence from a further expert.

This has resulted in the somewhat unusual situation where the parties have agreed the claimant's figure of £47,913, where all I can do under the rules (CPR3.15(2)) is simply record that that agreement has been made.

The defendant has taken the position that it seeks a figure of £42,600 in relation to such a case management conference, but only to the extent that it deals with the disclosure application and not with the further expert evidence application. In relation to that, the defendant says that it does not know precisely what the claimant's application is or will be and cannot sensibly budget.

The £42,600 figure is said to be a combination of £35,600 worth of solicitor time and £7,000 counsel's fees. While I can see the basis in any event for the £7,000 of counsel's fees, I have very considerable difficulty with the £35,600 of solicitor's time in relation to an application simply for disclosure of a set of listed contracts.

The dispute, it seems to me, is likely to be one of law more than one requiring considerable witness evidence. But in any event, £35,600 seems to me to be a very considerable figure based on a very considerable amount of time.

Bearing in mind that the matter may very well change following the claimant making its further expert evidence application which will effectively be a development which will allow matters to be reviewed, it seems to me that, on the express basis that this is on the assumption that the CMC will not include the further expert evidence application, the figure I should approve for estimated costs in the CMC phase for the defendant is £28,000. That, it seems to me, will allow a proper amount for counsel and solicitors on that particular assumption.

I turn next to the disclosure phase. The defendant's disclosure phase figure is agreed at £458,513.94. The claimant originally sought £841,550, but has reduced what it seeks to £610,000, made up of £525,350 of solicitor's time and £85,000 of disbursements, £80,000 of which relates to an electronic database hosting system.

The defendant complains particularly about the solicitor time, asserting that for disclosure, which the defendant says is limited and will be much advantaged by the electronic database system, even if, as the claimant says, there will be 97,000 documents to consider, allowing 1,500 hours of paralegal time and 500 hours of solicitor time and 100 hours of top-level solicitor time is simply excessive and not reasonable or proportionate. The defendant proposes an overall figure of £402,000.

It does seem to me that the claimant's solicitor's time does seem high in the circumstances. There is also the rates point. I do, of course, have to bear in mind that the claimant is not merely producing its own documents, but also reviewing whatever comes from the defendant's side, although the budget does allow for a figure for counsel and it seems to me that the review is likely to be somewhat counsel-led.

In all those circumstances, it seems to me that the claimant's proposed figure is somewhat high and should be reduced, but not as far as the defendant seeks. I come to a figure of £545,000 in the circumstances.

As far as witness statements are concerned, the defendant's figure of £182,212 is agreed. The claimant seeks £238,500 based on 520 solicitor hours, albeit the claimant says that they will only be preparing and relying on two to three detailed witness statements, but indicating that they may have other witnesses.

They say that the defendant has made a derisory offer, particularly bearing in mind the number of hours that the defendant proposes to spend in terms of this phase themselves. I remind myself though, as I have said already, that the defendant's witness statement operation may be a distinctly different one from the claimant's, especially where the defendant is having to produce witnesses describing what they themselves did and indeed having to engage with what are accusations of fraud against them.

Nonetheless, it does seem to me that the claimant will be carrying out a distinctly considerable exercise in relation to its own witnesses, particularly in the quantum area where questions arise as to the claimant's ability to perform all the various contracts which it says that it should have been awarded. Nonetheless, the total of 520 hours does seem distinctly high, and there is also the rates point. Factoring everything in together, I come to the conclusion the appropriate figure is £185,000.

The next phase is experts. Here, the claimant's figure of £298,225 is agreed, but the claimant objects to the defendant's total of £352,650. Notwithstanding that, unlike in the case of the claimant, there has only been limited work carried out so far by the defendant in relation to this phase, the claimant says that the proposed total number of hours of solicitor's time of 310 hours is excessive.

The claimant further objects to the total proposed number of defendant's leading counsel and junior counsel (118) hours, which are said to justify total counsel’s fees of £55,000 fee; and further objects to the defendant's expert fees, which it says are some £50,000 greater than the claimant's.

The defendant responds to say that they canvassed a number of experts and have been advised that this is the likely level of fees for the operation; and to say that it is proper for leading and junior counsel to advise at this point.

It does seem to me that counsel's fees are distinctly high. Although counsel will be involved in ensuring that expert reports are comprehensive and deal with all the issues, and also in seeking to understand the other side's expert report and the challenges which can be made to it, the expert reports are primarily matters for the experts to produce. Of course, the meeting and joint statement process is something which is province of the experts and where the lawyers should be very careful before they interfere or take any role within it. It does seem to me that the suggestion that 118 hours of counsel time should be spent in relation to what, at this point anyway, is only one expert on each side is distinctly high.

As far as the experts' fees themselves are concerned, it does seem to me that the defendant's estimates seem somewhat high in view of what the claimant has been able to negotiate and agree.

Having considered all the matters together, I therefore this it is right to impose some reduction on the defendant's figure, and I come to a figure of £313,000.

As far as the PTR phase is concerned, the fees proposed now for the claimant are £2,675, including the trial fee for the claimant and a figure of £1,500 has been suggested for the defendant albeit that the defendant’s case is that they should have a figure in excess of £4,000.

The fees to be included in this PTR phase (where no hearing has been directed) additional to the trial fee effectively represent the solicitors' costs of carrying out what seems to me to be a distinctly limited exercise in this case of preparing pre-trial checklists and considering the other side's pre-trial checklist.

It seems to me that the figures which I have first set out above (representing effectively £1,500 for each side for what seem to me will only be a limited amount of work required to complete and review the pre-trial checklists) are that which are reasonable and proportionate, and I therefore approve £2,675 for the claimant and £1,500 for the defendant.

As far as trial preparation is concerned, which includes counsel's brief fee, £555,300 is agreed for the claimant. The defendant seeks £637,802. The claimant says that the figure included in the defendant’s calculations of £271,795 for solicitor time is too high; and, although there may be a pre-trial conference, the matter will be very much led by counsel who have very considerable brief fees, and to spend 820 hours of solicitor time at this point is simply far too much.

The defendant responds to refer again to the various serious allegations of fraud and dishonesty which were made, the need for solicitors to be fully up to speed when briefing counsel and attending conferences and advising the client, and also to ensure that the right documents are included within the trial bundle. Mr Krsljanin submits that solicitors should not simply be deferring to counsel in those circumstances.

The claimant seeks a reduction as far as the solicitors' element is concerned to £141,000, that is approximately £130,000 less than the defendant has sought. The claimant also objects to a £24,000 figure in relation to an expert providing advice, saying it should only be £8,000.

It seems to me there ought to be some reduction in the expert figure, although not to the degree that the claimant seeks. The expert will effectively be being asked with regards to queries rather than to, in some way or other, rewrite their previous advice.

As far as solicitors are concerned, it does seem to me that there ought to be some real reduction. It is to be expected that the defendant's solicitors will be carrying out less work than the claimants, because they will be have a lesser role in terms of preparing the trial bundle. It seems to me also that the solicitors fee and number of hours is distinctly high for this phase, but on the other hand that I have to have regard to what is agreed in relation to the claimant's budget.

Factoring all matters into my holistic appreciation of what is reasonable and proportionate, I come to a figure of £515,000.

There is then the trial phase where the defendant's budget of £236,010 has been agreed. The claimant seeks £411,000; the defendant says that it should be more like £250,000.

The defendant first points to the trial being listed for seven court days, whereas the claimant's figures are on the basis of eight days. Mr Burton responds that the court is likely to list some further hearing following the delivering of a reserved judgment. It seems to me that that is to a degree speculative and all the more speculative that it would involve a full day, although it does seem to me that as a matter of reality something should be allowed for this.

The defendant further complains about the claimant proposing to have two partners, a solicitor and a trainee present on each day, and advances the contention that there should only be four lawyers. It certainly does not seem to me that there should be any more than that in the circumstances of this case.

The defendant further complains with regards to expert evidence that the claimant has produced a figure of £70,000 based on having two accountants attend for each of five days. The defendant says, firstly, that it is excessive to have two accountants when there is permission at this point for only one expert, to which the claimant responds that a second accountant will be of considerable assistance to the actual expert.

Secondly, that attendance for five days is simply excessive when the accountants will only be giving evidence, it is thought, for one day; to which the claimant responds that the accountants need to be kept up to speed.

It seems to me that there is more force in the defendant's contentions, especially as I cannot see as to why I should be allowing for two accountants when there is permission for only one expert.

I am, however, not prepared to reduce my calculations for the experts' attendance down to simply one day. It seems to me that there must be a risk in the case of the expert actually having to attend over two days and I also ought to allow a reasonable period of time for the expert to be kept up to speed during the trial, including as to what has actually happened during the witness evidence, and to be able to factor that in to their preparation for their actual attendance to give evidence.

There is further a dispute with regards to disbursements, but Mr Burton tells me that the disbursement figure is the correct one taking into account what Mr Krsljanin has said.

Having factored those matters into my consideration, I come to a total of £350,000 for this phase.

There is then the ADR phase. The claimant's figure for them of £109,650 is agreed. The defendant proposes £93,390.

The claimant raises some objection based on the defendant’s incurred figure of £73,000 which the claimant says included substantial work for previous abortive ADR and which would mean that the work required for future ADR would be more limited. I see little force in that. Future ADR is likely to take place in a very different context following disclosure and/or witness statements and/or expert reports and, it seems to me, will effectively be something of a new exercise.

The claimant, objected to various other elements, including counsel and solicitors' fees.

However, it seems to me, in circumstances where the court always wishes to encourage ADR and therefore ought to ensure that it provides for proper figures of costs to be expended in relation to it, and where Mr Krsljanin reminds me this is a case where effectively fraud and deceit is alleged against the defendant and their individuals which will, it seems to me, render rediation potentially more complex, and bearing in mind the claimant's agreed figure, that I should simply be approving the figure sought by defendant of £93,390.

Various contingencies are raised before me, where in relation to most of which I decided, for reasons which I have already given, that I should not be dealing with as part of this cost budgeting exercise.

However, there is the strike-out and reverse summary judgment application which the defendant has brought and which is going to be listed for one day or possibly two days, later this year at High Court judge level. That, it seems to me, is a contingency which is almost certain to arise and therefore for which I should be cost budgeting.

The claimant seeks a figure of £132,400 to which the defendant proposes £107,500. The defendants proposes for themselves a figure of £121,933, following incurred costs of £21,240.68. That figure is not agreed but the claimant did not make any detailed submissions against it. The defendant says the claimant's figure is too high on the basis that the strike-out application and its ambit is going to be limited. The claimant says that the court cannot be remotely sure of that at this point in time and that it is facing a knock-out argument which it is very important to it to be able to respond to completely.

It does seem to me that there is some force in the submission that a party has to spend even more time and work on an interim application which is capable of being dispositive of the entire litigation, although it is more important to consider the nature of the application itself and the work to be done in relation to what is raised by it.

It does seem to me that there is force in Mr Burton's submission that the claimant has only had a limited amount of time to consider what may be necessary to be done in relation to the application, and that where it is for reverse summary judgment as well as strike-out, it may well be necessary for there to be some significant witness evidence, even though that that is relatively unlikely in the light of the way in which it is thought that the defendants' arguments are being put. One consequence, though, of that submission on Mr Burton's part is that he has to accept that the figure that he has adduced is somewhat speculative.

Approved 20.2.2026