The Patents Court’s costs budgeting decision examines how courts should treat premium-rate solicitors’ fees on an inter partes basis, rejects general assertions that AI should reduce litigation costs, and confirms that high hourly rates do not of themselves render budgeted costs disproportionate.
When conducting a costs budgeting exercise, the court’s task is to determine whether the budgeted costs for each phase fall within a range of reasonable and proportionate costs, not to undertake a detailed assessment in advance or to identify the absolute lowest possible figure. [3(v), 8]
The reasonableness and proportionality of budgeted costs must be assessed from an inter partes perspective, which may differ from what a party considers to be in its own best interests or commercially justifiable when instructing its chosen legal team. [6, 44]
A comparison between the parties’ respective budgets may be informative but is not determinative, as differences may legitimately arise from asymmetrical litigation burdens, divergent case strategies, or one party’s underestimation of required work. [3(vii), 5(iii), 38]
The fact that a party instructs a firm with high headline hourly rates does not, of itself, render the resulting costs unreasonable or disproportionate; the court will consider whether the task was completed efficiently and whether the total cost for the phase is justified, rather than focusing solely on the arithmetic of the rates applied. [5(ii), 34]
Incurred costs can and should be considered when assessing the reasonableness and proportionality of future budgeted costs, but the court will generally be reluctant to make definitive findings on the reasonableness of incurred costs at the budgeting stage, as this is better suited to a detailed assessment. [5(iv), 16-17]
