When a court reduces a costs budget from £3.3 million to £850,000 and signals that further reductions are coming, it is worth paying attention to the wider implications.

That is precisely what happened in Various Claimants v Mercedes-Benz Group AG [2025] EWCH 2307 (KB), the latest chapter in the Dieselgate group litigation. Cockerill J’s judgment did not just produce eye-catching figures. It introduced a term that is fast becoming shorthand for a growing judicial attitude towards excessive team deployment in litigation: Overlawering.

What Happened in the Dieselgate Case?

The Dieselgate proceedings have been running for several years and involve thousands of claimants bringing claims against Mercedes-Benz in relation to alleged emissions manipulation. The September 2025 judgment dealt with Tranche 3 costs budgets, covering causation and quantum issues for an eight-week quantum trial.

The headline numbers tell their own story. The claimants submitted budgets totalling £55.7 million. The defendants came in at £75.8 million. Cockerill J approved £21 million for the claimants and £55 million for the defendants, representing reductions of over 60% and 27% respectively.

Those figures alone would have made the judgment significant. But it was the court’s reasoning around team composition that is likely to have the most lasting impact on how costs are managed in complex litigation.

What is “Overlawering”?

The court found that during the costs and case management conferences, the deployment of legal teams had been excessive. Nine in-person attendees, the court held, were ample. The additional “remote monitoring” by a further 20 individuals was not justified, and those costs would not be recoverable between the parties.

Beyond the hearing room, the judgment also addressed the position of non-lead firms in the group action. Their recoverable involvement was confirmed to narrow circumstances. Routine activity described as simply keeping abreast of the litigation, staying informed of progress and developments without actively contributing, was treated as a solicitor-client matter. It was not recoverable as an inter partes cost.

Overlawering, as the court framed it, is not just about having too many people in the room. It is a broader criticism of deploying legal resources in ways that cannot be justified as proportionate and necessary for the actual conduct of the litigation.

And the court made clear that this was not simply a retrospective observation. Heavy reductions would be made, Cockerill J warned, should overlawering be detected when budgets were fixed at the next case management conference for expert evidence and ADR. The message to litigators was unambiguous.

Why This Matters Beyond Group Litigation

It would be tempting to view the Dieselgate judgment as something that only affects large-scale group actions with multi-firm structures. That would be a mistake.

The principle underlying the court’s approach – that legal costs must be proportionate, necessary, and properly attributable to recoverable work – applies across all civil litigation. What the Dieselgate case does is illustrate, in unusually stark financial terms, what happens when that principle is not applied rigorously from the outset.

Several questions flow from this judgment that are relevant to any firm involved in contested litigation:

Are you able to justify every fee earner charged to the file? Courts are increasingly willing to scrutinise not just rates and time but whether the individual involved was necessary at all. A senior partner attending routine interlocutory hearings alongside a full team is the kind of deployment that faces growing judicial scepticism.

Are you distinguishing clearly between recoverable work and management work? The distinction the court drew between active conduct of litigation and keeping abreast of proceedings is important. Internal liaison, team briefing, and general supervision may well be billable to the client – but they are increasingly unlikely to be recoverable from the other side.

Is your costs budget built to withstand scrutiny, or built on optimism? The Dieselgate reductions suggest that courts are not simply trimming at the margins. Where a budget is not properly supported by proportionate, defensible figures, the reductions can be severe.

The Proportionality Dimension

The overlawering criticism does not exist in isolation. It sits within the broader framework of proportionality that has been reshaping costs recovery since the introduction of the revised CPR Part 44 in 2013 and continues to evolve through the courts.

A costs order or approved budget that might once have sailed through assessment is now routinely subjected to scrutiny on proportionality grounds. Where team size is excessive, and the work claimed cannot be justified by reference to the demands of the litigation, courts have the tools – and, as the Dieselgate judgment demonstrates, the willingness – to make substantial reductions.

For law firms, this means that the decisions made about team composition and task allocation at the start of a matter have direct consequences for what can ultimately be recovered. Those decisions are increasingly difficult to undo at the costs stage.

The Practical Takeaway

The Dieselgate judgment is a timely reminder that costs management is not a box-ticking exercise. Building and maintaining a defensible costs position requires active thought throughout the life of a matter – not just when a budget is submitted, or a bill is drawn.

Specifically, firms should be considering:

• Whether the team structure on any given matter is proportionate to its complexity and value
• How clearly recoverable inter partes work is distinguished from internal management activity in time recording
• Whether attendance at hearings is genuinely necessary for each individual present, in person or remotely
• How team changes, and significant developments are captured and addressed within the costs budget before they become points of dispute at assessment

Getting specialist costs advice early, particularly in higher-value or multi-party matters, allows these issues to be identified before they become costly problems.

How Greener Costs Can Help

At Greener Costs, we work with law firms at every stage of the costs process, from budget drafting and costs management through to detailed assessment and points of dispute. Our team of qualified costs lawyers and costs draftsmen understands how courts are approaching proportionality and what it takes to build and defend a robust costs position.

Whether you are managing a complex group action or a significant single-claimant matter, engagement with a specialist single-claimant matter, early engagement with a specialist cost team is one of the most effective ways to protect your recovery.

Get in touch today via info@greenercosts.co.uk or by calling 01204 263047 to find out how we can help.