There is currently a group claim proceeding through the Courts in relation to diesel emissions.
The Court recently had to look at the costs budgets. The costs being incurred were detailed in the judgment published publicly.
The Courts will generally try to limit the costs that can be recovered from another party in litigation although costs that a client pays its lawyers is generally a matter between the lawyer and the client.
it was said that the costs might exceed £1 billion for the Claimants alone. The Claimant’s Counsel were proposing to charge £440,000 per week for trial and the solicitors £1,000,000. Therefore I ask, is this the most expensive legal case in Uk history?
I also wonder, if they need a mediator I would act in this capacity and my fee would be a bargain at £1 million. Contact details below.
The purpose of this article is to highlight the level of costs incurred in this case which affects many drivers who purchased diesel vehicles.
The Court was critical of the Claimant’s lawyers calling the costs “absurd” and questioning why there was no provision for ADR in one phase of the litigation.
The Court looked at the overall costs incurred and estimated by the Claimants and Defendants for General Costs.
The Court judgment stated:
At a headline level, the Claimants seek a total of £60,048,849.51 against which the Defendants have collectively offered £11,408,080.20 against incurred costs said to be £132,466,008, the suggestion that in the next 21 months, the Claimants will incur a further £60m on matters which are not specific to the work to be carried out on Tranches 1 and 2 seems without proper foundation.
The vague and generalised assumptions and explanations for the sums are insufficient to come close to justifying the sums claimed. The approach taken in Tranches 1 and 2, in which enormously high lawyer hours are claimed, permeates this Tranche in equal measure. In general terms, we have effected significant reductions to reflect the extent to which it seems the Claimants have overestimated the extent of tasks needed (which do not fall into the other Tranches) or the time attributable to those tasks.
One specific aspect to comment on more generally, however, is the budgeting for the fortnightly progress meetings. These are meetings requested by the Managing Judges, which take place by Teams and generally last between 30 minutes and 1 hour every two weeks. The purpose is to apprise the Managing Judges of ongoing issues or difficulties with the progress of the litigation. The agenda is generally quite short, agreed through a pre-meeting between the parties. They appear (to the Managing Judges, at least), to help retain a focus and prevent issues dragging on without resolution (by agreement, or by decision-making) so as to jeopardise the trial timetable. They are useful. Nevertheless, the Court was surprised that they supposedly generated a budgeted cost for the Claimants of around £80,000 per progress meeting (at least: the precise number depends on how many such meetings it is assumed may take place between now and the end of Tranche 2); or the equivalent of 133 Grade A lawyer hours (at £600). This cannot possibly be justified.
We have determined that £15,000 per meeting for the Claimants is reasonable and proportionate. This equates to the equivalent of around a half-day for a small, key team of A and B Grade earners coordinating and in advance of the short meeting with the Defendants and within the Claimant team in order to be present at the session. We consider there should be an assumption of 30 such meetings – it is unlikely that they will take place, for example, during the hearings themselves. In respect of each ALGLO, we consider that £10,000 per meeting is appropriate, as there will be less co-ordination required.
We have included some (much reduced) sums in the Claimants’ general budget. The Court expressed its surprise during the hearing at the stance taken by the key Defendants that no sums should be included for ADR prior to the end of Tranche 2, because it was not readily conceivable that a concerted effort at commercial resolution of the dispute could or would take place prior to the end of Tranche 2. The Defendants will no doubt be aware of the costs risk that this sort of approach involves. It is not appropriate to say more at this stage. The figures that the Defendants have now included in the summary spreadsheet appear to be broadly reasonable.
As can be seen from Appendix 2, we have reduced the Claimants’ estimated costs for the Tranche 1, Tranche 2 and General budgets from £207,748,907.15 to £51,997,713.75. We have reduced the aggregate of the Defendants’ estimated costs from £211,766,177.07 to £113,973,384.37.
In relation to expert reports, the Claimants claim a total of nearly £13m, of which in broad terms, around £4m is said to be the cost by way of disbursements of the expert reports themselves. That means for every £1 spent on an (independent) expert providing the technical evidence itself, there will be £2 spent on lawyers. That does not seem to be, in general terms, an appropriate ratio, and suggests over-zealous involvement of the lawyers in curating the process of the production of independent technical evidence. This is further evidenced by the suggestion that over £1m of Counsel’s fees will be incurred in relation to (advising on; they are not writing) the expert reports. We have allowed broad equivalence between the costs allowed to the Claimants in respect of each ALGLO and vice versa. This recognises both the asymmetry in that the Claimants are dealing with all of the issues against all of the ALGLOs with the fact that there will be some efficiency through the use of a single expert team. We have also reduced a number of the sums allowed to a number of the Defendants, below that offered by the Claimants. Not least by reference to the co-Defendants, these appear obviously excessive.
The Claimants claim nearly £3m for the PTR alone. This is absurd. There are 3,000 solicitor hours claimed against ‘Pan-NOx’ and roughly the same again across the ALGLOs.
For the Trial Preparation phase, the majority of solicitor costs claimed by the Claimants are within each OEM line, and Counsel’s fees within the Pan-NOx line. We have assessed all these costs as falling, for the purposes of budgeting, most sensibly within Pan-NOx. The overall costs claimed by the Claimants are just under £20,000,000 for the 10-week evidentiary hearing, excluding the closing submissions hearing which will follow in Spring 2026. Of this, Counsel’s fees are in excess of £10m. Assuming the trial preparation period commences at the point at which the last expert evidence is filed, at the end of June 2025, this allows three months. In turn, this would suggest that the Counsel team are charging nearly £1m per week. These sorts of sums are neither reasonable nor proportionate even in the context of this litigation: either the Counsel team is too large, their time is being over-charged for, or both. Similarly, the number of solicitor hours budgeted to be spent in preparation (particularly given such heavy Counsel involvement) is absurdly high and unjustified. We have allowed to the Claimants double what is allowed to any single Defendant. This amply reflects the greater burden carried by the Claimants when compared to a single Defendant.
The same general remarks also apply to the trial itself: the Claimants’ Counsel team are charging £440,000 per week, and the solicitor team £1m a week. The latter equates to – at an average rate of £350 (taking into account the split of rates across a team) – a team of 34 lawyers working 12 hours (when the Court is sitting for 6 hours) a day for each sitting day plus the same at weekends. Even where it is accepted that in an evidentiary hearing when new evidential points inevitably arise unexpectedly there will be some ongoing work ‘behind the scenes’ to assist the Counsel team, it is obviously wholly incredible to consider that there may be any real value whatsoever added by such a fleet of lawyers. Again, we have allowed more to the Claimants than to any individual Defendant, which seems appropriate (although, in reality, once into the trial itself, the justification for any significant discrepancy is likely to reduce).
The same applies even more pointedly to the preparation for and attendance at the 3-week closing/legal submission hearing in March 2026, for which the Claimants propose incurring a further £18m+. The Defendants’ budgeted sums were also excessive, notwithstanding being met generally with offers to agree the amount budgeted. We have reduced the sums budgeted by both Claimants and Defendants substantially.
For disclosure, the Claimants’ budget of over £21.5m is absurd.
The overall costs incurred and estimated by the Claimants and Defendants for Tranche 2 are set out … above. At a headline level, the Claimants seek a total of £136,260,061 against which the Defendants have collectively offered £34,774,889.78. The aggregate of the Defendants’ costs estimated are £179,244,975 against which £124,876,791 has been offered. Mercedes’ estimated costs are £37,936,517 against which £28,751,775 has been offered
The sums claimed by both the Claimants and Defendants – but particularly the Claimants –are out of all proportion with the extent of work required, when carried out efficiently and minimising duplication.
By way of example, the total solicitor time claimed by the Claimants across all Claimant firms and all phases between now and Spring 2026 – around 21 months away – is over 263,600 hours. That equates to over 12,500 hours per month, or the equivalent of 50 solicitors consistently working 250 billable hours per month – in addition to the very significant counsel team involvement. This is far in excess of time reasonably demanded by this litigation and could only be explained by an approach redolent of inefficiency and duplication both within and between firms
We accept the Defendants’ submissions that there is generally insufficient reasonable justification for the Claimants’ inferred approach to resourcing the case. The sums incurred and estimated by the Claimants appear to the Court to demonstrate scant regard for carrying out work in an efficient, non-duplicative and cost-conscious manner. To coin Mr Justice Turner’s phrase in Maurice Hutson & Ors v Tata Steel UK Limited the Claimants’ approach to budgeting is redolent of financial incontinence. It may be that this approach is driven by the overall model of this group litigation in which the traditional downward pressure imposed by a client on their lawyers is lacking in the overall funding model (described to some degree in the context of the Defendants disclosure application. Whatever the reason, the staggering costs both incurred and estimated are in numerous individual respects and in the aggregate frankly absurd and – whether or not the Claimants still intend to incur and charge for work on such a basis – this Court will not sanction this wholly unreasonable expenditure of costs
£3.65m said to have been spent by the Claimants on the costs-budgeting exercise alone. The Claimants contend that the litigation is worth, conservatively calculated on the basis of £4,000 per Claimant, in excess of £6bn if the Claimants are successful. This is, of course, disputed by the Defendants. It is a matter of public record that (without admitting liability) VW paid £193m in settlement of around 91,000 claims following the preliminary issue judgment of Mr Justice Waksman referred to above, equating to just over £2,000 per Claimant.
As indicated above, at the conclusion of Tranche 2, the litigation may be in the region (were every issue to be fought to the end) of about one-third of the way through.
The Claimants’ incurred and estimated costs of approximately £350m therefore – at least on a linear basis – suggest that their total common costs would exceed £1bn. Moreover, it may be thought that it is in consideration of causation and loss that the burden on the Claimants in terms of evidence and disclosure will increase, such that the number of Claimants is much more relevant than in relation to liability issues. Applying the same to the Defendants’ budgeted costs, the aggregate spend across all the parties would be around two thirds of the sums at stake, assuming the lower of the figures above, and would on this analysis be well within the foothills of disproportionality.
It is important to recognise two things. First, that these costs take us only to the end of Tranche 2. There will be further common costs in respect of causation and loss and, possibly, other issues in relation to liability. Secondly, that in respect of the Claimants, these are only the common costs, that is the costs common to all of the Claimants in bringing the claims and the costs common to the groups of Claimants in respect of the individual Defendants. As Mr Williams KC acknowledged, the Claimants’ budgets do not include their individual costs, that is, the costs referable only to each particular claimant and which would be recoverable only by that claimant. While the selection of lead Claimants, for the purposes of causation and loss, would avoid each claimant incurring the costs of every phase, there will still be individual costs for each claimant, such as the costs of taking initial instructions and, if the Claimants are successful, distributing any award. For every hour at the Grade D guideline hourly rate spent on each of the Claimants, the total for all Claimants would be about £300m.
In respect of Tranche 2, the Claimants say they have incurred at least £2,202,909.21 (although, again, the true figure is higher than this, as the Claimants have taken 5 May 2024 as the cut-off between incurred and estimated costs for the purposes of budgeting). The Claimants’ estimated future costs for Tranche 2, across its ‘Pan-NOx’, Lead/ALGLO category and individual GLO headings, total £136,260,061.46
The main Defendant participant in Tranche 2 is, again, Mercedes: there are more sample vehicles being investigated in the Mercedes claim than in the others. Their incurred costs are £1,791,768.75 and they are budgeted to spend £36,144,748.90. The ALGLO Defendants’ future costs range between £891,650 (the PCD Defendant Dealerships) and £27,086,058.00 (Nissan). The aggregate of the ALGLO Defendants’ costs claimed in respect of Tranche 2 is £136,128,826.30 (almost identical to the Claimants’ budgeted costs). The aggregate of the Non-ALGLOs’ costs claimed in respect of Tranche 2 is <strong £43,116,148.83 The total, therefore, budgeted to be spent by the Defendant parties on Tranche 2 is £179,244,975.13. The total budgeted costs to be spent altogether by all parties in relation to Tranche 2 alone also therefore exceed £315,000,000
<li><a>There is also a ‘General’ category of costs not attributable directly either to Tranche 1 or Tranche 2, but nevertheless to be spent in the period between now and the conclusion of Tranche 2. This includes generic or outline statements of case (the latter against Non-ALGLOs), and other general case and GLO management costs and other general liaison and/or co-ordination between the parties. The Claimants’ total for incurred costs is an incredible £132,466,008.68 and estimated costs are £60,048,849.51. The aggregate of the Defendants’ incurred costs in the general category is £90,807,891.03 and estimated costs are £25,647,011.09.
The total incurred and estimated costs sought within the cost budgets is therefore £342,642,342.80 for the Claimants and, in the aggregate,£306,835,723.14 for the Defendants: nearly £650m combined.
Against the total future costs budgeted across the 3 tranches by the Claimants of £207,748,907.15, the aggregate of the Defendants’ offer is £49,288,969.98. Against the total future costs budgeted in the aggregate by all Defendants of £211,766,177, the Claimants’ offer is £148,178,828.
In respect of Tranche 1, the Claimants have incurred at least £224,517.76 (although the true figure is higher than this, as the Claimants have taken 5 May 2024 as the cut-off between incurred and estimated for the purposes of budgeting, inexplicably in light of CPR 3.17(3)(a)). The Claimants’ estimated future costs for Tranche 1, across their ‘Pan-NOx’ and individual GLO headings, total £11,439,996.18.
The main Defendant participant in Tranche 1 is Mercedes. Their incurred costs are £511,798.98 (adopting the correct cut-off date of the costs budgeting hearing) and they are budgeted to spend £3,603,284. The other Defendants involved are Ford, Nissan, and VW2, claiming £1,190,903, £915,242.50 and £1,164,761.35 for future costs respectively. Whether the aggregation of these sums represents any useful comparator to the sums claimed by the Claimants is considered further below, but in any event the aggregate is £6,874,190.85
Conclusion
The Court remarked that the Claimants’ collective costs could amount to one billion pounds! The question we have is, is this the most costly litigation in history and are the parties considering mediation or ADR?