Wigg & Co - estimates
of costs and relevance to assessment
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See Leigh v Michelin Tyre
PLC (2003) EW CA Civ 1766 the Court gave important guidelines on the
relevance of estimates to detailed assessment. If there is a substantial
difference between the estimated costs and the costs claimed that calls
for an explanation. In the absence of a satisfactory explanation the
Court may conclude that the difference itself is evidence in which it
can conclude the costs claimed are unreasonable.
Second, the Court may
take the estimate costs into account if the other party shows that it
relied on the estimate in a certain way, for example where a paying
party relied on the relatively low estimate not to make an offer of
settlement but carried on with the litigation on the basis that his
potential liability to the costs was likely to be of the order indicated
in the estimate.
Third, the Court may take
the estimate into account in cases where it decides that it will
probably have given different case management directions if a realistic
estimate had been given. It might have trimmed the number of experts for
example or to reduce the complexity of the litigation but it would not
be correct use of the power conferred by Practice Direction paragraph
6.6 to hold a party to his estimate simply in order to penalise him for
providing an inadequate estimate. There is no justification for
interpreting the provisions in the CPR as equating costs estimate with
costs budgets or caps.
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