Various Claimants v Mercedes-Benz Group AG & Ors

This judgment deals with the Costs Management Order (“CMO”) to be made following the second Costs Management Hearing (“CMH”). Like the reserved judgment from the first CMH, it is written by one of the Managing Judges sitting with the current Senior Costs Judge.

We have decided that there are two phases where it would be better not to approve budgets at this stage. These are the Expert reports phase in the Tranche 3 budgets and the ADR phase in the Second General budgets. These phases are considered at the end of this judgment.

The extent of the relevance of the first CMH and, in particular, the costs incurred in Tranche 2, runs throughout this judgment. The defendants’ submissions sought to uphold the rationale and outcome of the decisions made there. The claimants’ submissions sought to demonstrate that they had taken on board the criticisms largely aimed at their budgets when submitting budgets for this second CMH. The extent to which those efforts were successful is at the heart of this decision.

Readers of this judgment are referred to the first CMH judgment ([2024] EWHC 1728 (KB)) for the background to this litigation including the terminology and acronyms as well as the general principles of costs budgeting which are set out in detail. It is sufficient for the purposes of this judgment simply to describe the elements of these proceedings which are currently being budgeted and how they fit in with the proceedings overall.

The amalgamation of existing and intended Group Litigation Orders in respect of NOx Emissions for the purposes of active case management began at the end of 2023. There have been a number of formal interlocutory and case management hearings thereafter as well as “Fortnightly Meetings” which were intended to deal with any minor procedural issues in a speedy fashion and maximise the chances of the critical path to trial being achieved.

The first trial of issues (“the KBA Issues”) (“Tranche 1”) took place in October 2024. The second trial, concerning “Prohibited Defeat Devices” (“PDD”) (“Tranche 2”), is due to begin in October 2025. Those Tranches of this litigation were dealt with in the first CMH decision together with “General” costs incurred outside of the Tranches themselves.

Directions for the third Tranche concerning causation and loss were given in March 2024 and the “Quantum Trial”, as it is described, is due to take place in October and November 2026. It is the costs for this Tranche (“Tranche 3”) along with the second period of general costs (“Second General”) between Spring 2026 and the Quantum Trial which are the subject of this decision.

The Lead GLO involves claims against Mercedes. Additional Lead GLOs (“ALGLOs”) involve Ford, Peugeot / Citroën and Nissan / Renault. Claims against other manufacturers are described as Non-ALGLOs. The participation of the Non-ALGLOs in the PDD Trial and the Quantum Trial has been limited by the case management directions. Consequently, there is a distinction to be drawn in terms of the costs for and against the Non-ALGLOs when compared with the Lead and ALGLO defendants. This delineation in participation also explains why the claimants have set out their budgets to distinguish (i) “Pan NOx” work involving all, or potentially all of the GLOs; (ii) Lead and ALGLO work; and (iii) GLO specific work.

By contrast, the defendants do not separate out any Pan NOx or Lead and ALGLO costs and so their budgets simply reflect the work for each defendant entity. Nevertheless, their status as Lead, ALGLO or Non-ALGLO defendant has clearly affected the sums claimed in various phases by the defendants to reflect the extent of their participation in the Quantum Trial.

There are, as the claimants’ skeleton argument described it, “slightly fewer” budgets and phases to work through on this occasion. There are in fact 63 budgets: about half relate to Tranche 3 which comprise 10 phases and about half relate to the Second General budgets which comprise three phases. As such there are 390 costed phases compared with the 1,071 phases referred to in the first CMH judgment. Unsurprisingly, therefore the sums claimed are lower than in the first budgeting exercise but nevertheless they still amount to £55,731,549.35 (Cs); £75,779,828.07 (collectively for Ds) for Tranche 3 and £19,776,700.50 (Cs)/ and £3,557,144.35 (collectively for Ds) for the Second General budgets.

As with the first CMH, we pay tribute to the “fleet” of counsel representing the numerous parties and who managed to make their submissions in a sufficiently streamlined way to deal with all of the phases in the allotted two days of court time.

There are numerous criticisms made by the court of the claimants’ proposed budgets in the first CMH judgment. The claimants’ team of counsel before us strove to demonstrate that lessons had been learned as a result. It was suggested that this was reflected in two distinct ways. First, by the limitation of costs claimed by some of the non-lead solicitors and by the allocation of work to different parts of the budgets. The second was an attempt to provide further explanation of the figures put forward and to clarify the reasoning and approach of the claimants in relation to their challenges to the defendants’ budgets.

Counsel for various defendants suggested that, in fact, the claimants had learned few, if any, lessons from the first CMH and one went so far as to suggest that the sums claimed in the current budgets represented a collateral attack upon the reasoning in the first judgment.

To some extent, the dispute between the parties as to how to apply the guidance given in the first CMH judgment is linked to the next heading of this decision regarding a comparison of Tranche 2 with Tranche 3. Where, for example, the claimants had been allowed £36.2 million for the Tranche 2 budgets, they were now seeking £52.5 million for Tranche 3. In addition to their general arguments regarding the claimants’ continued “over lawyering”, the defendants queried why the overall budget should be higher for Tranche 3 than it was for Tranche 2 given the issues involved. At least part of the claimants’ response to this challenge was to suggest that the Tranche 2 figure would have been higher if Constable J had been made aware of the extent of the work required in a more detailed and helpfully explanatory fashion.

The claimants’ budget assumptions follow a standard path regardless of whether they relate to the Pan NOx level; Lead and ALGLO; or GLO specific. There is a general description of the work done which is very similar regardless of which level is involved. There is then a table setting out the expected work to be done by the lead solicitors – Pogust Goodhead and Leigh Day (or simply Pogust Goodhead where they are the only lead solicitor in certain GLOs).

For phases such as witness statements, the table sets out the number of hours estimated for each grade of fee earner. For the co-ordination work, the number of hours is set out per week for each grade of fee earner involved. Accordingly, in respect of the co-ordination phase in the Pan NOx level budget, the entry for each grade of fee earner in the Pogust Goodhead row says “1.2 hrs per week = 4.8 hrs a month for 14 months”. The Leigh Day row says that 1 hour or 1.5 hours will be spent - making a total of five hours per week when compared with Pogust Goodhead’s 4.8 hours per week.

We accept that the level of detail provided by the claimants is now of a similar nature to that of the defendants in respect of phases where specific work can be described. We also appreciate that, for the co-ordination work, it is more difficult to describe what is going to be done other than in relatively broad terms. To that extent, the claimants have clearly sought to improve the information before the court in response to the criticism of the first CMH judgment. Nevertheless, the repeated and generalised nature of the text left a gap in correlating that description of the work to be done and the specific amount of time claimed in any particular budget. Regrettably, therefore, the amplified description did not materially assist the court in the manner hoped by the claimants.

More fundamentally, in our view, the provision of further information has not justified the enormous amounts of time claimed even if it has, as Ben Williams KC for the claimants described it, demonstrated how the figures have been reached as a product of the time claimed multiplied by the various hourly rates.

Finally, in respect of lessons learned, we do not criticise the claimants for putting forward standard offers in respect of, for example, Non-ALGLO defendants for various phases. We have not, for the reasons described below, always accepted that approach, but it is a reasonable approach to take and ought not to be criticised.

As well as looking to comparisons with Tranche 2 (see below), there are phases of the Tranche 3 budgets which have sufficiently defined parameters to enable us to stress test the budgets for “over lawyering”. We conclude that the court’s criticism of “over lawyering” in the first CMH judgment has not prevented the claimants here claiming the following attendances at the CMCs, PTR and trial as being reasonable:

The issues to be dealt with in Tranche 2 are summarised at paragraph 10 of the first CMH judgment. In essence, they deal with whether “defeat devices” were present in the vehicles; if they were, could they nonetheless be justified by reference to the Emissions Regulation (EC Regulation 715/2007); and if found to be defeat devices, whether they amount to a breach of contract or a breach of statutory duty?

The issues to be dealt with in Tranche 3 may be summarised as:

The Quantum Trial to deal with these issues has been listed for eight weeks. The PDD trial is listed for ten weeks starting in October to receive evidence with a further three weeks in the New Year for submissions. The defendants made repeated reference to the length of the Tranche 2 trial at thirteen weeks compared with the Tranche 3 trial of eight weeks to justify the argument that many of the phases of the budgets for Tranche 3 should be smaller than Tranche 2, not larger.

Similarly, as the period for the Second General budget is nine months (approximately April 2026 to December 2026) when compared with the First General budget of 22 months, the defendants said that the Second General GLO management costs should be less. (This particular argument did not apply to the Tranche 3 costs because costs prior to the CMH were claimed from the outset of the litigation as incurred costs.)

The defendants also made the point that no party has sought to vary the Tranche 2 CMO. Since it is the same case, it ought to be strongly persuasive as to what allowance would be reasonable and proportionate. The claimants’ response to this was generally that the “lived experience” of pursuing the claims in Tranche 2 was that they had required more time to be spent than had been expected when the first CMO had been made. In support of this argument, the claimants referred to some of the defendants’ figures where they were seeking greater sums than had been allowed in Tranche 2.

In some phases, such as disclosure and the individual statements of case, there was a complete disagreement as to whether the Tranche 2 figures were relevant. The defendants said that they were in the sense of providing a ceiling as to the recoverable costs. This submission was made on the basis that the disclosure in Tranche 2 was wider ranging and the scope was less certain whilst the statements of case were more complicated. The claimants said that the disclosure was in fact expected to be very significant and that, in any event, it involved a completely different exercise from disclosure regarding PDDs. In respect of the statements of case, whilst they might be less complex technically, the time spent would be greater because of the interaction with individuals rather than sample vehicles.

In our view, the defendants had the better of the arguments generally in respect of the comparison between Tranche 2 and Tranche 3. The amounts allowed for Tranche 2 (and not sought to be varied) are an obvious starting point for considering the work to be done in Tranche 3 by the same lawyers in the same litigation. Where there is a difference in the work required between the two Tranches, we expect the work to be less, rather than more, than in Tranche 2. Furthermore, with the court’s encouragement, there has been a considerable improvement in the co-operation between the parties since the start of the litigation and it is running rather more smoothly. Given that, and the continuing relevance of some earlier interlocutory determinations (e.g. as to de-designation, and disclosure) it would be expected that the procedural aspects, such as CMCs, would be dealt with more economically. In respect of phases such as statements of case, where the substance of the phase is plainly different, we would also generally expect the work to be less involved and therefore time consuming than for Tranche 2, despite the involvement of individual claimants.

As mentioned above, in respect of the defendants’ costs, there were a number of phases where the claimants had made the same offer to each defendant (particularly Non-ALGLO defendants). On some occasions, that offer had been accepted by all defendants, on most occasions it was accepted by some of them and on one occasion (trial preparation) it had not been accepted by any of them. The argument was made, usually by Mr Lyons on behalf of his clients, that there had to be a range of figures which could be described as reasonable and proportionate and so it could not be the case that all defendants had to be allowed the same sum.

Additionally, we were told that this was not the approach taken at the first CMH and there are certainly instances where, for example, Ford had been allowed one figure and other Lead and ALGLO defendants had been allowed higher sums. Equally, however, there are plainly other instances, such as for the fortnightly meetings, where the ALGLO defendants were allowed the same sum and the Non-ALGLO defendants were also allowed a single (different) sum albeit the court recognised a “graduation” between them (see paragraph 86).

The nature of budgeting is to allow a sum that is reasonable and proportionate for each phase based on the assumptions of the parties and the views of the court. It is inevitable that this sum would differ between budgeting judges and so, to that extent, there is a range of figures that can be described as reasonable and proportionate that could be allowed. But this does not take away from the broad nature of budget setting for estimated costs yet to be incurred. There is nothing to say that the same, broad, figure should not be allowed for each defendant undertaking the same tasks in a phase. This is particularly so, in the absence of any compelling reason as to why a particular defendant’s costs should be higher (or lower) than any others.

It has long been the case that solicitors’ estimates which were exceeded by no more than 20% were conventionally treated as being within an acceptable range (see e.g. Morgan J’s comments in Mastercigars Direct Ltd v Withers LLP [2009] EWHC 651 (Ch) at paragraph 55ff). That approach persists in the CPR where, at paragraph 3 of the Part 44 Practice Direction, costs claimed at a detailed assessment which exceed a previously filed budget by more than 20%have to be supported by a statement of reasons, but not otherwise.

It seems to us that figures which are within 20% of the opponents’ offer may be considered to be within a reasonable and proportionate range of figures, always assuming that the comparator sum is considered to be reasonable and proportionate. On occasion, therefore, we have allowed a figure within this tolerance, rather than always adjusting figures so that they are the same. But we have not always considered this to be appropriate and so there are examples of both approaches which, it seems to us, is nevertheless consistent with the approach taken in the first CMH judgment.

However, where figures are more than 20% above that comparator figure, they are going to require specific reasoning to justify those higher figures. Whilst Mr Lyons, on behalf of Vauxhall and Peugeot Citroën (“PCD”), valiantly sought to portray his clients’ figures as being within the reasonable and proportionate range, we generally did not accept that to be the case. Consequently, on many occasions they have been reduced to figures agreed with other defendants.

There were numerous submissions regarding the manpower involved on the claimants’ side in these proceedings. In his opening, Mr Williams described the onerous nature of this litigation on the legal teams. He contrasted the defendants’ separate teams for the 13 GLOs, supplemented by inhouse expertise and “shadow” firms whose presence materialised in their participation in the confidentiality rings. By comparison, the claimants are represented by two lead firms dealing with all of the GLOs on behalf of the claimants. Whilst we are aware of the considerable amount of work done by the parties’ lawyers in these proceedings, there does not appear to be any lack of personnel to be called upon by the lead firms acting for the claimants, judging by the budgets put forward. Indeed, in response to the suggestion that there would not be much work done on Tranche 3 by the relevant personnel until after the PDD Trial had taken place, we were told that there were, in fact, separate teams working on preparing for the Quantum Trial.

Furthermore, the frankly remarkable proposition that at least 30 fee earners would be attending the CMCs, PTR and trial for the claimants suggested no lack of resource. It will come as no surprise to any party that the budget for attendance at these hearings has been considerably reduced. Given the amount of co-ordination costs claimed within the lead firms as well as with other firms, the number of attendees who can deal with any matters arising in addition to the several counsel being instructed ought to be much more restricted.

Another repeated refrain was the challenge to the extent of time claimed by solicitors other than in the lead firms. These came in two categories. The first involved firms who, according to the specific GLO, are part of the steering committee for that GLO. This related to Mercedes, BMW and Vauxhall. The second category concerns other firms instructed by claimants whose claims have become part of the relevant GLO. This category contains firms with a modest number of clients but also some who have clients in virtually every GLO.

The amounts of time claimed by these non-lead firms was significantly reduced at the first CMH. Submissions were made to the effect that there was considerable uncertainty in such firms as to what they were and were not allowed to do (in the sense that only work allowed in the budgets might be recovered from the opponent at the end of the case).

There was a considerable difference between the parties as to how active or passive such firms should be. The claimants referred to the clients’ right to choose their firm of solicitors and the possibility that the lead firms might not have the expertise to deal with a particular client’s claim. They also argued that a non-lead solicitor had a professional obligation to keep themself abreast of developments in the litigation so as to be able to advise their client, particularly when it came to offers of settlement.

The defendants pointed to the terms of the GLOs which restrict the work to be done to the lead firm(s) (or steering committee) and maintained that, as such, no other costs ought to be recoverable. Any costs involved in advising the client about potential settlement should be claimed in the individual costs bill which would be a separate matter. As Jamie Carpenter KC on behalf of Mercedes (and speaking for the defendants generally on this point) described it, the starting point was to allow for one, adequately resourced, firm to do the work. In practice, this might be done by the two lead firms but that should not result in duplication. Work done by any other firm would need to be justified as to why they were best placed to do that work and to ensure that it was not then duplicated by others.

Whilst conceptually, Mr Carpenter’s description has some attraction, the practical application of case management decisions in the GLOs to use two lead firms and / or a steering committee will inevitably result in greater costs being incurred than one well-resourced firm. For example, unless it is going to be said that all firms in a steering committee cannot meet at any point, there are bound to be times claimed by multiple attendees of such meetings. Nevertheless, it is incumbent on such firms to keep such interaction within reasonable bounds and it is likely that the overall time claimed by steering committee firms for dealing with common costs will be compared with a notional amount of time allowed to lead firms to ensure that the additional costs of a steering committee are reasonable.

In respect of the non-lead firms, it seems to us that the common costs claimed by them should be extremely limited. The nub of the work they are asked to do is to look after their client and that work ought to be claimed within the individual costs and not the common costs. That may mean that time spent keeping abreast of developments is not recovered between the parties – much may depend on the extent of that work – but if so, it is a solicitor and client matter, in the same way as if the solicitor is charging an hourly rate which is not fully recovered from the opponent and seeks it from the client instead. This approach seems to us to be more appropriate than one where numerous firms of solicitors are claiming time for familiarising themselves with the litigation thereby incurring costs which are of no benefit to the litigation itself. The only brake upon such work is if the client is likely to pay for it.

This leaves the question of the drafting of the client’s witness statement and individual statement of case. This only applies in the few cases where a claimant has (a) been chosen as a Sample Claimant and (b) instructed a firm which is not one of the lead firms (including steering committee firms, where relevant.) The claimants say that the instructed firm should produce the statement and that the lead firm should then review it for consistency before submitting it with the other Sample Claimants’ witness statement. The same approach would be taken for the individual statement of case. The defendants say that the instructed solicitor should simply alert their client to there being contact from the lead solicitor who will take the statement etc.

We do not think we have to make a formal decision on this point. We are approving a phase total for each phase and not the constituent parts of that phase. Accordingly, either the instructed solicitor or the lead solicitor could take the statement; but the key point is that it should not involve more time than if the statement had been taken by the lead solicitor of a client who had instructed the lead solicitor’s firm. This is the reasonable and proportionate approach between the parties. We were not impressed by the assumptions document reciting numerous reviews and peer-reviews to ensure “consistency” of documents intended to be set out in the party’s own words. The reality of this litigation may be that the witness statements are all processed to the point of near homogeneity but that ought not to be the case. And it certainly should not be encouraged by the court; it is a cost that the party and their solicitor should bear.

Provided there is transparency, the first CMH judgment confirmed that a party may set out costs in its budget which are less than it has actually incurred. The statement on the Precedent H refers to the budget being “a fair and accurate statement of incurred and estimated costs which it would be reasonable and proportionate for my client to incur in this litigation.” If a party considers its total incurred or estimated costs are unreasonable or disproportionate, it can put lower sums in the budget and still follow the statement of truth. It matters not whether they were reduced as being unjustified or for some other tactical reason (as the claimants suggested).

The claimants sought to suggest that this approach was widespread on the defendants’ side. This led to a steady procession of advocates professing, generally on instruction, that the rates claimed in their client’s budgets were indeed the full rates agreed to be paid. It would appear that the defendants were concerned that this was a point on which the claimants had hit home.

Why this was so, was not immediately apparent. The concept of a party incurring more costs than it could recover is hardly new. The beginning of the often quoted paragraph 13 of the judgment of Leggatt J (as he then was) in Kazakhstan Kagazy Plc v Zhunus [2015] EWHC 404 (Comm) says:

“In a case such as this where very large amounts of money are at stake, it may be entirely reasonable from the point of view of a party incurring costs to spare no expense that might possibly help to influence the result of the proceedings. It does not follow, however, that such expense should be regarded as reasonably or proportionately incurred or reasonable and proportionate in amount when it comes to determining what costs are recoverable from the other party.”

The difference between the costs incurred by a party and its solicitor and those that it might recover from an opponent was also encapsulated by Sir Rupert Jackson in his Review of Civil Litigation Costs in 2009 when he described “actual costs” and “recoverable costs”. The former represented the full costs of the litigation and which fell upon the parties (and sometimes the general population). The latter represented a source of funding for the winning party and thus promoted access to justice (see 2.9 Final Report). He then said (at 2.10) that in some areas of litigation, “both the recoverable costs and the actual costs are excessive.”

The only rationale for the defendants being concerned at the idea that they had spent far more than was set out in their budgets would be that, in some way, otherwise reasonable and proportionate costs would appear to be unreasonable or disproportionate. In the current situation, where budgeting judges have made costs awards against parties whose budgets were maintained at levels considered to be unrealistic, there is certainly something to be said for a party considering its putative budget based on actual costs and then reducing it if it considered the sums claimed to be too high to be justified between the parties. It is at least as appropriate an approach as the claimants’ position i.e. that they have put in all of their costs because only costs recovered from the defendants or deductions from (as yet unquantified) damages are the only sources of funding.

In any event, the budgeted sums are the ones before the court and they are either reasonable and proportionate or they are not. Where we have considered them to be the latter, we have reduced them. It is only if indemnity basis costs orders are made against the parties that they need to be concerned by any larger sum of actual costs incurred by their opponents (see Vardy v Rooney [2025] EWHC 1027 (KB)). In order for the claimants to be at any such risk, they will have had to indulge in conduct which the court considers to be out of the norm.

We have already made mention of the two and a half dozen fee earners budgeted to attend these hearings on behalf of the claimants. Nine were said to be the core team who would be present at court. The other twenty one would be remote but with the benefit of the real time transcription. This was said by Mr Teasdale for the claimants, with an admirably straight face, to be necessary in order to deal immediately with any matters arising. Such an approach is plainly not realistic: nine members of a team should be more than ample to deal with any points arising and the need for any “full time” remote attendance is hard to discern.

The “lived experience” of the parties in dealing with the CMCs in Tranche 2 was described by Mr Shires, one of the claimants’ counsel in the substantive proceedings, as well as by various members of the claimants’ costs counsel team. They were described as “mammoth undertakings” which involved considerable amounts of work for weeks leading up to the hearing. The complexity of the issues involved had led to comparatively simple matters, such as the agreement of the terms of the resulting order, taking several months to finalise.

The defendants’ response was that the Tranche 3 CMCs were unlikely to be any more heavyweight than the Tranche 2 CMCs and, as such, the allowance of £450,000 per CMC allowed by the first CMO ought to be sufficient here. In terms of where the budgeted sum should be allocated, it should be at the Pan NOx level for the claimants. Whilst the defendants accepted that the CMCs dealt with some GLO specific matters, it was impossible to forecast what they might be and it was therefore more appropriate to put the sum into the overarching budget. Whilst the claimants did not disagree strongly with this argument, they did make the point that to do so might well be storing up difficulties later on in dividing such costs should some GLOs settle and others not.

We take the view that the budgeted sum should be in the Pan NOx budget for the reason given by the defendants. The re-allocation of costs between the various budgets, as well as between common and individual costs, may well prove to be fertile ground for challenges in detailed assessment proceedings if the parties wish to make it so and there is nothing practical that can be done to prevent that occurring at this stage. Allocation to specific GLOs would simply mean the potential for arguments about moving costs into other budgets later where the CMC costs turned out to be not as forecast.

As was made plain during the hearing, the court has considerable sympathy with the parties in the amount of work they have had to put in to making the CMCs successful. But, equally, the court expressed some scepticism that the Tranche 3 CMCs will be as complex as Tranche 2, bearing in mind the need at that stage to deal with matters such as the confidentiality ring arrangements. Having reflected on the submissions, we have come to the conclusion that both sides’ costs in these phases are unreasonably high.

The Tranche 3 case management hearings should certainly not be longer or more complicated than the Tranche 2 ones. Tranche 2 has had a number of features which will not afflict Tranche 3. The first of those was establishing productive working relationships across the claimant and defendant teams. The early part of the case was rendered more difficult by confrontational tactics which led to delays and quite a lot of attempts to shift blame for lack of progress. That occupied much time and cost. It has however been (happily) very much ameliorated as the case has progressed.

The second is the complication of the combined Sample Vehicle and testing regimes, including the difficulties as to acquiring Sample Vehicles, agreeing testing protocols (including the technicalities of rollbacks) and making suitable arrangements for testing. While it is likely that some further testing will be needed for Tranche 3, the parties will benefit from a host of valuable lessons learned on this front in Tranche 2. This will inevitably mean that arranging for testing is, if not simple, at the very least incomparably simpler than the initial exercise.

The third factor is confidentiality. For Tranche 2 a fairly complex CRO had to be established and disputes then had to be conducted as to de-designation. A very large amount of effort was required in relation to both of these aspects. The results should render such issues of minimal impact for Tranche 3. These are not the only extra complicating factors of Tranche 2 CMCs, but they are some of the main ones.

While the claimants may be right that, as matters transpired, the budget for the CMCs probably underestimated the real (and proper) costs of the CMCs, there is currently no sign that the estimate for the Tranche 2 PTR (now just completed) is inadequate.

For the claimants, the Tranche 3 estimated costs sought are £3.3million for the two CMCs and £1.4 million for the PTR. In Tranche 2 the sums allowed were £900,000 collectively for the CMCs and £450,000 for the PTR. For the defendants, the aggregate sums claimed are £3.74 million (£3.15 million allowed for Tranche 2) excluding Mazda and £1.61 million (£1.31 million allowed for Tranche 2) excluding Mazda for the CMCs and PTR respectively.

Overall, the CMC figures and PTR figures on both sides should be slightly lower than those given for the longer and more complicated Tranche 2 trial.

For the claimants, we have allowed £850,000 for the two two-day CMCs. For the one-day PTR, we accept that a simple halving of the CMC figure probably does not provide sufficient preparation time and so we have allowed £300,000.

Comments on the sums allowed in the parties’ Tranche 3 phases are as follows:

The Pan NOx and Lead and ALGLO sums of £200,000 and £175,000 for Tranche 2 have been adjusted down to reflect the shorter period of co-ordination than in Tranche 3. The PCD figure reflects the claimants’ assumption that similar work would be done in respect of all ALGLOs in this phase. The average of £38,500 for the Non-ALGLO proceedings appeared far too high for the limited co-ordination required in Tranche 3 and the defendants’ offer was preferred.

The co-ordination between defendants ought to be rather less than is required by the claimants. This work is only for co-ordination outside the specific phases that have been used and such work seems likely to be modest. That was the assumption of the drafters of the Renault budget and yet it is of a similar magnitude to the PCD budget where significant co-ordination was expected, albeit only “some co-ordination” was likely to be non-phase specific. The Mercedes budget set out a “burn rate” to justify their estimate. Inevitably it would depend upon the reasonableness of that burn rate generally. The upshot is that the Renault, PCD and Mercedes budgets in this phase are significantly higher than either Ford or Nissan, the other ALGLO defendants. We consider the Ford estimate is about right for this phase and we have allowed the claimants’ similar offer of £85,000 for the remaining budgets.

The only Non-ALGLO budget outstanding is that of Vauxhall. All other defendants have accepted offers of up to £25,000. It was submitted to us that the increased costs claimed owed much to the seriousness with which Vauxhall were taking the numerous claims they had received. As Mr Williams pointed out, the first CMH judgment described the number of claims being made as relevant to the individual rather than common costs. We think Mr Lyons’ argument for Vauxhall falls into the same category and so we have allowed £25,000 for this phase.

As discussed, the overall sum for the two CMCs in the Pan NOx budget should be reduced to £850,000. Whilst there may be some re-allocation ultimately between budgets following the issues dealt with at the CMCs, there is no need for further sums in the Lead and ALGLO budgets.

We have limited the disputed Lead and ALGLO budgets to £500,000 as being a sum within the 20% tolerance discussed earlier and in circumstances where the estimates were considerably higher than seemingly comparable ALGLO budgets for similar work.

Vauxhall’s budget was considerably in excess of all other Non-ALGLOs, save for Volvo which had accepted an offer of 60% of their estimate. The need for two counsel and three fee earners in this phase did not appear reasonable given Vauxhall’s limited involvement as a Non-ALGLO in the CMC. The claimants’ offer was approved.

The question of which solicitors should be involved in this work has already been discussed. The sums allowed reflect the assumption that the work is carried out by the lead solicitors. If there is delegation to other solicitors, that should not result in additional time claimed between the parties.

The budgets regarding the ALGLOs were identical once any non-lead solicitor work was removed. The additional sum for Mercedes allows for a proportion of the time of the firms on the steering committee in addition to the lead solicitors in respect of this phase.

We were struck by the very limited assumptions set out by the defendants generally in this phase. The only assumption of relevance is in the master assumptions where it makes it clear that ten Sample Claimants will be drawn from each of the main GLOs with the expectation of reducing this to 40 sample claimants. We record, as requested by the parties, that we have budgeted the parties’ costs on the basis of there being 40 claimants with Mercedes, PCD and Ford each having 10 claimants and Nissan and Renault having 5 each. If this situation should alter, the parties will need to reconsider their budgets for this phase, amongst others.

Given the limited assumptions we have reduced the average figure for the Lead and ALGLO defendants from just over £110,000 to £100,000 for those with ten Sample Claimants and allowed £60,000 for those with five claimants.

The only Non-ALGLO defendant whose claim has not been agreed at £5,000 is Vauxhall. The claim for £17,000 for the assumed very little involvement involves four fee earners spending 17 hours together with time for leading and junior counsel. This compares with most other defendants spending 10 hours (at lower rates) and without involving counsel. We do not see this as a reasonable approach, even with the counter proposal of £13,000 and so have allowed the sum of £5,000.

The claimants have also made offers on this basis. As a result, the offers for Nissan and Renault are lower because they would only be facing five Sample Claimants each.

The individual statements of case concerning quantum are, in our view, plainly less complex than the pleadings in Tranche 2. The figures in this phase are far too high for the work required. In the Lead and ALGLO budget the claim for approximately £300,000 for expert input appears to have no regard to the amount of expert input claimed in the GLO specific budgets in this phase, let alone in other phases. Excluding that cost and reducing the need for conferences with counsel as a result, reduces the figure to £100,000.

For the GLO specific budgets, both the amount of time claimed for solicitors and the level of experts’ fees were significantly too high. The involvement of counsel was limited. Although the percentage reductions are significant (over 50%), we were still a little concerned by the resulting figures for this phase.

With the exception of Ford, the Lead and ALGLO defendants’ budgets are reasonably similar and range from approximately £560,000 (if the two Nissan entities are combined) to PCD whose claim is roughly £100,000 higher. Unlike the other defendants, PCD make allowance for experts’ fees which largely make up the difference.

The claimants’ offers distinguish between those defendants facing ten Sample Claimants and those facing five. £500,000 is offered for the former and £300,000 is offered for the latter. We do not think the provision for external expert evidence in the pleadings is reasonable and we think the claimants’ offer of £500,000 for defendants facing ten claimants is a reasonable one. Similarly, and allowing for slightly less opportunity for economies of scale, we consider the claimants’ offer of £300,000 to be reasonable for the defendants facing five claims.

In relation to Nissan Authorised Dealerships, the claimants’ offer treats them as if they were Non-ALGLO defendants which we do not think can be appropriate. Whilst the Renault Dealerships’ costs are within the Renault figures generally, we do not think that is reason essentially to preclude any additional sums being claimed by another ALGLO defendant. The assumptions are not clear in our view and, doing the best we can, we have allowed £20,000 for this phase.

For the Non-ALGLOs, there appeared to be two schools as to the amount of time required to review the statements of case. We say appeared because in our view there is little in the assumptions to explain the sort of fees estimated by Vauxhall, Volvo and FCA when compared with the others. For example, the limited involvement suggested by Vauxhall amounted to 53 hours together with £19,000 of counsels’ fees. In contrast Suzuki estimated 14 hours and £1,000 of counsel’s fees. The difference may depend upon the view taken as to the similarity of the exercise for Tranche 2 (and for which £5,000 was allowed). Suzuki were clearly mindful of that figure in their assumptions and have subsequently accepted the offer of £5,000 made to all Non-ALGLO defendants. We have not discerned any argument by those seeking higher fees as to why considerably higher sums will be required in this tranche. The nearest was Mr Griffiths’ submission on behalf of BMW (whose figures were closer to the Tranche 2 allowance in any event.) By his calculation, BMW had allowed for approximately 40 minutes to review each of the pleadings and the claimants’ offer reduced that time to 13 or so minutes. That argument does depend on treating each pleading as if it were the first time any pleading in this case had been seen. The likelihood is that the statements of case, at least within GLOs, and probably more generally, will have many similarities and the per proceedings calculation is not a sound guide to the work involved. Nonetheless we can see some limited scope for a need to consider specific points of distinction applicable to a claimant, which did not so readily arise at the Tranche 2 stage. Consequently, we have allowed an increase limited to 20% on the previous tranche’s allowance where the figures were not previously agreed.

The parties are a long way apart as to the extent of the disclosure exercise but it is evident that there is, in any event, far too much expert and counsel input in this phase. The experts will identify missing documents as part of their substantive reporting (in the expert report phase) in any event. Much of the time claimed relates to conferences said to relate to third-party data, comparators and reviewing the defendants’ disclosure.

There can only be a modest co-ordinating role at the Lead and ALGLO level regarding disclosure and that is reflected more accurately in our view by the defendants’ offer.

In relation to the GLO specific budgets, the solicitors’ time was broadly similar and the amounts for counsel, the experts and the Database hosting were identical, save for Mercedes (but which were still similar). The amount of £950,000 included a notional allowance of 2,000 hours of solicitors’ time.

The defendants’ claims for costs under this phase are about £5.2 million. This is a considerably smaller task than in Tranche 2 where £17 million was allowed (and twice as much was claimed).

The claimants pointed to the costs of Ford for this phase which had been agreed at £743,098.00. They had ten Sample Claimants and had offered additional voluntary disclosure. The agreed figure should, according to the claimants, be a cap on the other defendants’ aspirations. It does not however seem to us that one defendant’s approach to record keeping, and therefore available documents for disclosure, can be assumed to bear much relation to another’s. Excluding the Nissan dealerships, the other Lead and ALGLO defendants have all sought more than Ford and the three highest – Mercedes, Nissan and PCD all produced very similar figures in the region of £1.2m.

We have found the PCD budgeting to be generally more pessimistic than the other defendants and we note that Mercedes was criticised by the court for its proposed budget in this phase of Tranche 2. We have therefore exercised a little caution, notwithstanding the similarity of the calculations, to allow up to £1 million here.

In respect of Vauxhall, it is the only Non-ALGLO budget in dispute. The input of these defendants to the disclosure is to produce a combined bundle of up to 3,000 pages. Having compared the times claimed by Vauxhall with other defendants, the 70 hours sought for the relevant tasks is similar to others. Nevertheless, the sum claimed of £73,782.45 is considerably higher than the other Non-ALGLO defendants. It is not the function of this exercise to set hourly rates but it is clear on this occasion that it is the rates claimed which have resulted in the higher budget sought. 65 of the 70 hours claimed are calculated at rates above £900 per hour. We have reduced the amount claimed to the claimants’ offer which was above the sums actually claimed by all of the other defendants save for BMW.

This phase was budgeted, as discussed at the hearing, on the basis of there being 40 Sample Claimants. The alignment of witness statements as described in the claimants’ budget assumptions ought to be limited as discussed above. The defendants’ offer of £50,000 for the Lead and ALGLO budget was preferred for this work.

In respect of the GLO specific budgets, once the non-lead work was removed from the Mercedes budget, the figures were all but the same. They included £43,750 in each budget for Oliver Lawson of Milberg to provide “advice on technical matters, consider and provide strategic guidance on the approach to witness statements and review drafts”. Given the number of other solicitors and barristers instructed by the claimants in these proceedings, we cannot conceive how such advice could reasonably be incurred between the parties and have disallowed it as a result.

Whilst all parties were confident that the 40 sample cases would involve 40 statements from the claimants, there was much more uncertainty in respect of the defendants’ witnesses. The claimants appeared dubious that the defendants would have any relevant witnesses to call. The defendants thought that they would probably call evidence but it depended on the claimants’ evidence as to how many witnesses and from whom the evidence might be obtained. Therefore, the budgets were particularly speculative in this phase and a broad brush was required.

We think there is less merit in distinguishing between those defendants who are faced with five Sample Claimants and those who have ten than in some of the other phases. Much of the work will relate to the defendants’ own evidence, and that of the other defendants. As such, the difference in the number of claimants is only one factor.

It has to be said that none of the defendants appear to expect to produce more than three or four witness statements themselves. Even allowing for the evidence to include some comments upon the expert evidence, the figures claimed seem particularly high. Unusually this includes Ford, who suggested that its figures were higher because it was expecting their Sample Claimants to include large fleet claims. Whilst this does not entirely explain the figure of £707,854 for ostensibly three witness statements and consideration of the claimants’ statements and those of other defendants, we recognise that fleet claimants are likely to raise discrete issues which will increase the work involved. We have allowed Ford £400,000 compared with the £350,000 allowed for the other ALGLO defendants (save for Nissan Authorised Dealerships where we have allowed the £20,000 offered by the claimants).

There is less scope for the budgets of the Non-ALGLO defendants to be speculative since their work is no more than to consider the witness statements produced by others. This may account for the range of the ten defendants being between £35,720 and £62,531.16 with almost all being between £40,000 and £50,000. Six defendants have accepted the claimants’ offer of £35,000. For the remainder, we consider a 20% increase on this sum to £42,000 allows a reasonable and proportionate sum under this phase.

As discussed above, the Pan NOx budget for this phase is allowed at £300,000.

For the reasons discussed above regarding the weight of the PTR compared with the Tranche 2 PTR, we have reduced some of the otherwise agreed figures regarding the Lead and ALGLO defendants so that the ceiling is £275,000. The Nissan Authorised Dealership figure we have allowed as claimed. Adding it to the other Nissan claim still allows for a figure considerably below the other ALGLOs without any compelling reason for the further reduction sought by the claimants.

In respect of the Non-ALGLO defendants, we have allowed the sums offered by the claimants in relation to Vauxhall and FCA. The Vauxhall budget suggested far too much involvement from a Non-ALGLO defendant to be reasonable. The FCA budget, whilst lower than Vauxhall, was still too high where the assumption was that no skeleton would be produced nor any submissions made.

This phase is agreed in respect of the claimants in a sum based, on our understanding, of an equivalent Tranche 2 allowance calculated by reference to the expected length of the trial.

The defendants’ accepted offer to the claimants amounted to £1 million per week of trial. The equivalent figures for Tranche 2 for the Lead and ALGLO defendants was an allowance of either £4 million or £5 million. The claimants have offered £4 million and three of the four defendants whose fees remain in dispute have counter proposed £4.5 million. In our view there is an appropriateness to the claimants’ budget being twice that of any individual defendant’s budget and so we prefer the claimants’ offer of £4 million. We do not agree that the Nissan Authorised Dealerships are in an equivalent position to the Non-ALGLO defendants given their larger role. We have allowed the sum claimed (and which is therefore similar to the sum allowed for the trial phase).

Uniquely, the claimants’ offer of £65,000 for this phase has been rejected by all of the Non-ALGLO defendants. It became clear during the oral submissions that at least part of this rejection resulted from the expected cost of the Opus 2 services taking a considerable sum from the budget. This was not a consistent figure but more than one defendant recorded a disbursement of over £11,000 for this item, or 17% of the offered budget.

Seven of the Non-ALGLO defendants have budgeted between roughly £80,000 and £95,000. In our view, these sums are in the correct area to allow for suitable brief fees, the Opus 2 charges and the solicitors’ time for preparing for the limited involvement in the Quantum Trial. The other three defendants have claimed approximately £145,000, £155,000 or £225,000 which cannot be reasonable in our view. The common thread in these three budgets is the extensive use of leading and junior counsel estimated at £95,000 to £150,000. Many of the other defendants have budgeted for the input of both leading and junior counsel but at a much more proportionate expense. It is a matter for these defendants as to how they cut their legal cloth but the difference between the total cost of doing so is currently stark.

The claimants’ offer of £65,000 is based on the Tranche 2 allowance of £50,000. We do not think that offer is sufficient; regardless of the figure arrived at for Tranche 2. Adding a sum for the Opus 2 charges brings us to a figure of £80,000 and we have therefore decided that proposed budgets between £80,000 and 20% above that sum (£96,000) should be allowed and budgets in excess of that top figure should be restricted to it.

Given the agreement of the budget for the Trial Preparation phase, we are not directly concerned with the brief fees of counsel because they have effectively been agreed. However, we are left with the refresher and similar fees which are claimed based on assumptions made in the Trial Preparation phase, in particular the composition of the team of 4 leading counsel, 4 senior juniors and 2 junior junior counsel. We do not consider that we are bound by the effect of the agreed phase, a view expressly set out in the first CMH judgment, given the many novel issues thrown up by these proceedings.

Furthermore, we have noted that the fourth leading counsel, whilst commanding the same brief fee, is not expected to work on the Fridays or weekends, nor between the trial and the consequentials hearing. We are not entirely convinced that this participation ought to lead to refresher fees and nor are we convinced about the need for more than two leading counsel to be leading the team of barristers for the claimants in the Quantum Trial in any event.

We are in no doubt at all that the number of attendees from the solicitors’ firms is not reasonable either, for the reasons discussed earlier. We note that the budgets also make provision for attendances by fee earners from various other firms beside the two leading firms. For the purposes of budgeting we have taken the view that virtually all of the fee earners from the lead firms who are likely to be attending in person should be allowed, but no-one else. This would amount to a team of 4 fee earners from each lead firm. Assuming one fee earner at each of Grades A to D would equate to a combined hourly rate of £3,250.00. If that figure were multiplied by 33 days at 8 hours per day, this would give a figure of £858,000.

There are experts’ attendance fees claimed at just over £0.5m for the trial on the basis that each one would be booked to attend for four weeks. There was some discussion about the reasonableness of that period; and we are very sceptical about it (inter alia based on experience of other litigation and the issues as to timetabling for the attendance of experts at Tranche 2). In our view there also ought to have been some concern at the rates sought for their attendance by the experts. One way or another we think that a figure of half the sum currently claimed might be reasonable.

Adding the figures discussed for counsel, solicitors and experts and adding the sizeable sum payable for the transcription services, we would reach a sum that is less than the amount offered by the defendants for this phase of £3.7m. Given the relative proximity of that figure to the offered sum and the uncertainties of the parameters of the trial viewed from so far ahead, we have decided simply to allow the sum offered by the defendants.

The submissions from counsel for various defendants was that thought had been put into the extent of the representation reasonably required. Those submissions demonstrated the myriad ways in which the representation could be dealt with - particularly by the Non-ALGLO defendants whose role is limited largely to making submissions. Our role is to allow a sum for the phase which is reasonable and proportionate and the parties can allocate that money as they and their clients see fit. It may indeed differ from the approach set out currently in the budget.

The Lead and ALGLO defendants, fees have largely been agreed at or around £2.5 million for this phase. We have not seen or heard anything which causes us to think that this sum is insufficient for PCD as well and so we have allowed £2.5 million. In relation to the Nissan Authorised Dealerships, we accept that there is a need for separate representation and that their position is not the same as for the Non-ALGLO defendants in this respect. We have allowed £200,000 for selected attendance by this defendant.

As far as the Non-ALGLO defendants are concerned, we consider the sums claimed by those who have not accepted the claimants’ offer of £65,000 to be overstated. A figure of £50,000 was allowed for such defendants for each of the PDD trial periods. The Tranche 3 hearing requires more in the way of submissions than the October 2025 hearing and is longer than the Spring 2026 hearing. Nevertheless, they give an indication of the sort of sum which is reasonable and proportionate for Non-ALGLO defendants to incur in respect of their limited role. We have allowed the £65,000 as offered by the claimants as reflective of this approach.

The claimants’ attempts to provide more detail to justify a more generous approach has, in fact, only served to demonstrate the “wildly inefficient” approach criticised in the first CMH judgment. We say this having made allowance for the fact that the claimants’ management costs will inevitably be higher than those of the individual defendants.

The work here runs from April 2026 until December 2026, a period of nine months and during which the Group Registers are closed and the case runs up to the Quantum Trial. The defendants have assumed that there will be very little GLO management work, given the closure of the Registers; that there will be no GLO hearings and there will be very little correspondence between claimants and defendants. We think these are reasonable assumptions which apply to both sides. In particular, we did not think that updating the Group Registers during this period should cause any significant amount of work.

However, the claimants’ assumptions expect there to be monthly updates, often both in writing and in meetings from the Lead Solicitors, to a panoply of other lawyers and non-lawyers – the Steering Committees, the Claimant Solicitors’ Committee, the Claimant Committee – who, at least as far as the lawyers are concerned, have inevitably also claimed their time for attending meetings and dealing with these updates. The attempt to estimate amounts for each element identified has resulted in an approach where overlapping elements are taken entirely separately, with a consequent inflation of costs. The composite results are frankly staggering. The purpose of having Lead Solicitors is for them to carry out the legal work in an efficient and cost effective manner to bring the issues before the court. Here there are forty or fifty Sample Claimants out of 1.8 million claimants. Yet the impression is given that all 1.8 million needed to be updated on a monthly basis in relation to (necessarily fairly granular) issues that have arisen during the previous month.

If this level of communication between solicitors at the various levels on the claimants’ side (as well as their clients) is considered necessary by them, then they will need to make a contribution to those communications. They are far beyond what is reasonable and proportionate in this litigation. There appears to be no attempt to provide an update that could be used by all in some cost effective manner. We have made some allowance for communications with the Steering Committee in the three affected GLOs, given their involvement under the terms of the GLOs, and notwithstanding time also allowed in the non-phase specific co-ordination costs in the Tranche 3 budget. But otherwise, we have only allowed sums for a modest updating of the Group Registers and updating of the wider claimant community, including the lawyers.

As far as the defendants are concerned, all but PCD and Vauxhall’s budgets have been agreed. All of the defendants’ budgets are considerably below the sums allowed to them in Tranche 2.

PCD have assumed that there will be significant co-ordination in their assumptions. We do not agree with that categorisation and as such think that even the counter proposal of £180,000 – which is twice the agreed figures of any other ALGLO – is too high. Indeed, the Lead and ALGLO defendants, other than PCD, have coalesced around similar figures and we consider PCD’s reasonable budget for this phase should be in line with them, particularly as much of the work that is required appears to involve inter defendant co-ordination.

In respect of Vauxhall, we reiterate the point made above concerning the Steering Committee in its GLO. We note that BMW (who also have a Steering Committee) have an agreed overall figure of £53,704.00 (including the Dealerships). That suggests Vauxhall’s counter proposal of £55,000 is a reasonable and proportionate figure and we have allowed it as such.

The Tranche 2 budget allowed for a sum of £15,000 per meeting and which, on the basis of an expected 30 such meetings, allowed for a budget of £450,000. In Tranche 3, the claimants have sought £39,967.50 for each meeting and therefore a total sum of £399,675.00 for what are expected to be 10 meetings. In other words, a similar sum to Tranche 2 is claimed for only a third of the meetings.

In order to achieve this, the claimants provided further information about how the fortnightly meetings had turned out in terms of work to be done. The process was forensically broken down into an eye watering eight stages, ranging from preparing for the pre-progress meeting, to the “post progress meeting de-brief”. The Court has taken well to heart the submissions made about the usefulness of the structure which has emerged during Tranche 2 – indeed the Pre-Progress meetings between the parties (mandated when it became apparent that the parties had not spoken to each other, merely fired hostile letters off at each other) have been one of the drivers of the greatly improved working atmosphere on the case.

However, it cannot be reasonable for the Lead Solicitors to be regularly working for 84 hours per 45 minute meeting. The telling summary provided by the defendants is worth reproducing:

This summary illustrates the collision between over analysis of process and over lawyering. Preparation will be organic – the meetings largely involve dealing with the latest correspondence spats or logistical pinch points. The idea that there is a need for 7 hours of partner time in preparing to talk to the other side about what has happened in the last week or so simply cannot be right. At the meetings there is not a huge variety of speaking parties – the claimants’ Lead Solicitors will each have a single speaking partner; it is hard to imagine that each needs a “supporting cast” of up to 5 people. We would, on reflection, and bearing in mind the way these meetings do progress matters and the value of the Pre-Progress meeting, be minded to allow very slightly more than was originally envisaged, but no more than £17,000 per meeting.

Regarding the defendants’ budgets, the only one which has not been agreed concerns BMW. Their Tranche 2 allowance for dealing with these meetings is £3,300 per meeting (£100,000 in total) and consequently ten times that figure in this phase has been counter proposed after the slightly higher original calculation was rejected. The claimants offer £20,000 representing £2,000 per fortnightly meeting.

Despite the worthwhile nature of these meetings, it is clear that (if the estimates genuinely represent reality) they have become over engineered. The allowed budget for the claimants requires them to look at how they are dealing with these meetings and to scale the process back. The same applies to the defendants and, as such, we think the reduced figure of £2,000 per meeting satisfies that approach rather than remaining with the figure from Tranche 2.

We have decided that these two phases would be better considered for budgeting purposes at a later point in this litigation. The reasons for so doing differ between the two phases.

The question of expert evidence is to be considered at the CMC in January 2026 and it is plainly the case that there is a fundamental dispute as to whether there should be the expert evidence currently contemplated. In particular, the unusual specialism of consumer behaviour is challenged and we were not entirely clear from the explanations of counsel as to the utility of such evidence. Since the extent of the expert evidence still needs to be determined, we think it would be better to budget that phase once the court has ruled further.

In respect of the ADR / Settlement phase, the claimants have estimated £11 million to be spent between April 2026 and the end of 2026: the defendants have estimated a combined sum of £1.8m. In the first CMH judgment, the court recorded its surprise at the lack of any engagement by the defendants with the possibility of incurring costs in attempting settlement. After some judicial encouragement, sums were allowed and it is hard not to see the figures put forward for Tranche 3, and the very modest assumptions set out, as being the least the defendants considered would avoid further judicial opprobrium.

The concept of budgeting is meant to afford a measure of protection to parties to ensure that their opponents are not going to incur unreasonable and disproportionate costs. In order to achieve this, however, the parties need to coalesce around assumptions for the litigation, even if there is a range of views. Where the parties are so far apart as to what, if anything, may occur next year, we take the view that there is no sensible way of budgeting this phase at this point. If the claimants are right that work in this phase is required, it will result in more incurred than estimated costs if a CMO regarding this phase is agreed or approved at a later date. If the defendants are right that little if any negotiating will take place before the end of the Quantum Trial, then there should be no harm in this phase being left unbudgeted. But if settlements do occur, then the costs will have to be assessed without the protection of a CMO. We propose to re-consider the budgeting of this phase in January alongside the expert reports phase in the Tranche 3 budgets.

In conclusion we have, like Constable J and Senior Costs Judge Gordon-Saker, often considered that the defendants’ offered figures for the claimants’ costs are broadly correct. Though on some occasions we have considered both the defendants’ offered figures, and their own budgeted figures still to stray considerably on the side of generosity. In respect of the claimants’ budgets, it is plain that the largest reductions stem from the layers of representation leading to, for example, claims for individual, non-lead firms to audit or replicate work already being done by the Lead firms.

In summary, we have allowed the following amounts for the phases we have approved: