Julian Thirsk & Anor v Berkeley Homes (North East London) Limited & Anor
| Judge | Mr Roger ter Haar KC |
| Judgment | 5 February 2026 |
| Jurisdiction | England & Wales |
| Claimant | Julian Thirsk & Anor |
| Defendant | Berkeley Homes (North East London) Limited & Anor |
Summary
Two flat owners sued a developer over defects in their Finsbury Park flat, claiming breach of contract, breach of statutory duty under the Defective Premises Act 1972 and negligence. With costs budgets unable to be agreed, the court had to set the defendants' budget under the costs management regime.
The claimants' budget had been agreed at just over £1.15 million. The defendants put forward a budget of some £2.13 million. The claimants said that figure was disproportionate; the defendants sought to justify it, including provision for leading and junior counsel across several phases.
Mr Roger ter Haar KC held the defendants' budget prima facie disproportionate, at nearly twice the sum claimed and nearly twice the claimants' agreed budget. He examined each phase and cut the estimated costs substantially, largely by reducing counsel and solicitor allowances to proportionate levels.
Background and facts
The claimants owned a flat in Finsbury Park. The defendants had carried out the original construction in 2012 and remediation works in 2014 to 2015. The claimants alleged the works were defective and brought claims in breach of contract, breach of statutory duty under the Defective Premises Act 1972 and negligence.
The sum claimed had risen after service of a Scott Schedule to about £1.2 million exclusive of VAT, with a trial estimated at eight days. A costs and case management conference had been held, but costs budgeting was adjourned and, when agreement could not be reached, the disputed budget was dealt with on the papers.
The issue
The court had to decide what figures to approve for the estimated costs in each phase of the defendants' budget. Under the costs management rules the court does not conduct a detailed assessment in advance, but asks whether the budgeted costs for each phase fall within the range of reasonable and proportionate costs.
The decision
Mr Roger ter Haar KC found the overall figure prima facie disproportionate before turning to the individual phases:
"I have no doubt that the overall amount put forward is prima facie disproportionate."Mr Roger ter Haar KC, paragraph 11
He noted that most costs budgeting can be done quickly and with a broad brush, and that only exceptionally should a Precedent H be examined with a fine tooth-comb, citing GSK Project Management Ltd v QPR Holdings Ltd [2015] EWHC 2274 (TCC). Because the defendants' figure was so far out of line, a closer look at each phase was justified.
Going through the phases, he cut the largest items. Trial preparation was reduced from about £548,850 to £404,250, expert reports from £276,625 to £220,000, and the trial phase from £435,750 to £285,000, in each case chiefly by trimming counsel and solicitor allowances he regarded as excessive for a case he did not consider particularly complicated. Smaller phases were adjusted on the same approach, some figures being accepted where they matched or bettered the claimants' equivalent.
The result was a set of phase totals for the defendants' estimated costs well below the amounts claimed, reflecting what the judge considered reasonable and proportionate rather than a line-by-line assessment of hourly rates, which is not the court's role at the budgeting stage.
Practical implications
A budget far above the sum at stake invites close scrutiny. Where a party's budget is roughly double the amount claimed and roughly double the opponent's agreed budget, the court is likely to treat it as prima facie disproportionate and examine each phase, rather than applying the usual broad brush.
Counsel provision is a common target for reduction. Much of the reduction here came from allowances for leading and junior counsel across witness statements, experts, the pre-trial review, trial preparation and trial. Budgets that load several phases with substantial counsel fees should be able to justify that involvement.
Budgeting fixes phase totals, not hourly rates. The court sets the total allowed for each phase; the underlying breakdown is only a reference tool, and the court does not fix or approve the hourly rates claimed. Parties should focus their submissions on the proportionality of phase totals.
The opponent's own budget is a useful yardstick. Phases were repeatedly measured against the claimants' equivalent figures and offers. A budget that sits far above the other side's comparable phase, without a clear reason, is exposed to reduction toward the proportionate range.
Practice points
- A budget close to twice the sum claimed, or twice the opponent's agreed budget, risks being treated as prima facie disproportionate and examined phase by phase rather than with a broad brush.
- Provision for leading and junior counsel across multiple phases must be justified; unexplained counsel-heavy phases are a frequent source of reduction.
- Costs management fixes the total for each phase, not the hourly rates; direct submissions to the proportionality of phase totals, not the underlying rate breakdown.
- Expect each phase to be compared with the opponent's equivalent figure; a large unexplained gap will usually be closed toward the proportionate range.