Hundreds of thousands of pounds could be knocked off the amount that OnTheMarket member agent Gascoigne Halman might be able to claim in any future costs order, as its legal battle with the portal’s owner, Agent’s Mutual, continues.

While the possible recoverable costs have not been limited, the costs budget has, making recovery of costs over and above the budget that Gascoigne Halman has told the courts it expects to spend improbable.

A costs hearing before Mr Justice Roth, president of the Competition Appeal Tribunal, has resulted in a number of cuts to Gascoigne Halman’s cost budget.

The published ruling says that the final outcome of the case is critical for the future of OnTheMarket – as Agents’ Mutual has itself contended.

The document lays bare the huge costs being run up.

The competition issues are to be examined by the Competition Appeal Tribunal in a trial that will take place over 12 days, including nine days in court, in February.

The latest round in the dispute over Agents’ Mutual’s ‘one other portal’ rule was a hearing into the amounts that could be claimed by the winning party.

Should Agents’ Mutual lose the case, it faces being hit with Gascoigne Halman’s costs – and vice versa.

Connells brand Gascoigne Halman had submitted a costs total some £1m more than Agents’ Mutual.

After a challenge by Agents’ Mutual, the Judge slashed Gascoigne Halman’s figure, but raised the possibility that Agents’ Mutual may not have budgeted enough for the actual hearing.

According to the ruling, Agents’ Mutual, the claimant, has a costs budget of £1.8m, of which “close to £560,000” has now been spent.

Gascoigne Halman, the defendant, has a budget of just over £2.8m, of which just over £1.2m has been incurred.

In his judgment, Mr Justice Roth remarked: “I accept that these are complex proceedings in that they involve a specialist area of law and therefore involve higher costs.

“Both sides are using City of London solicitors and I do not regard that as disproportionate.

“I accept also that the issues are of great importance for both parties although, it seems to me, they are still more important for the Claimant than for Gascoigne Halman: the Claimant contends that its future in the online portal market may depend on the determination of the competition issues.”

The document giving the latest ruling says that in a parallel but separate case, Welsh agent Moginie James and Agents’ Mutual have agreed each other’s costs budgets.

Gascoigne Halman has agreed Agents’ Mutual’s costs budget. However, Agents’ Mutual challenged why Gascoigne Halman’s figures are higher than its own. The Judge looked at a breakdown of these.

Witness statements have been budgeted by Gascoigne Halman at £299,819.

The ruling says: “That is based on the assumption that Gascoigne Halman will have 6-7 witnesses and also the task of reviewing the Claimant’s four witness statements and the evidence of Moginie James in the related action. The Claimant’s budget under this head is £147,650 and it is perhaps relevant to note that its budget is £19,575 for witness statements in the Moginie James action.”

The Judge goes on to say that he regards Gascoigne Halman’s total of almost £300,000 as “unreasonable and disproportionate”. He says a more proportionate sum would be £200,000.

Both Gascoigne Halman and Agents’ Mutual will have an economic expert, for which Gascoigne Halman has allowed a total of £348,000 and Agents’ Mutual put in for £257,763.

Again, the Judge says that Gascoigne Halman’s total is “unreasonable and wholly disproportionate”, revising the sum of £240,000.

A further budgeted cost by Gascoigne Halman, to do with PTR (pre-trial review), is knocked back from £105,725 to £40,000 – in line with Agents’ Mutual’s budget of £40,390.

Gascoigne Halman has budgeted £98,175 for trial preparation, while Agents’ Mutual has budgeted £122,975.

The judge said that he would expect Agents’ Mutual’s costs to be higher as it carries the burden of preparing the trial bundles. He reduced Gascoigne Halman’s budget for trial preparation to £80,000.

The budgets for the actual trial also came under scrutiny: Gascoigne Halman’s estimate of £842,195 against Agents’ Mutual’s £483,420.

The Judge says he would approve a revised figure of £550,000 for Gascoigne Halman.

Altogether the Judge knocked £922,634 off Gascoigne Halman’s figures, leaving Agents’ Mutual less exposed.

EYE wishes to make it clear that neither party in the case has made any comment on the ongoing judgment issued by the Competition Appeal Tribunal.

A spokesperson for OTM, in a specific response to a request for comment, told EYE: “When it was brought to our attention that after its acquisition by Connells, Gascoigne Halman was listing its properties on both Zoopla/PrimeLocation and Rightmove as well as at OnTheMarket.com, we initiated appropriate legal action to address the situation.

“As a founder Gold member, Gascoigne Halman had signed up voluntarily to list its properties with us and a maximum of one other competing portal. Gascoigne Halman had specified Rightmove as its ‘other portal’.

“As a result of the legal action, Gascoigne Halman continues to comply with its contractual agreements to pay a monthly subscription fee and to list its properties at OnTheMarket.com and a maximum of one other portal, which continues to be Rightmove.

“In its legal defence, Gascoigne Halman has challenged the legitimacy of the ‘one other portal rule’. This ‘one other portal rule’ has been, and remains, an essential element of the strategy of Agents’ Mutual to enter, and compete effectively in, a market so heavily dominated by two players.

“We understand that the Competition and Markets Authority has received requests to investigate but has chosen not to do so.

“In the interests of our members, all of whom have voluntarily committed contractually to list at OnTheMarket.com and with a maximum of one other portal, we are committed to defending the legitimacy and legality of the voluntary ‘one other portal rule’.

“The Board and management team of Agents’ Mutual have at every stage of the company’s inception and development taken appropriate legal advice.

“We remain satisfied that the company has operated within the law and we are pursuing appropriate action to ensure that agents meet their contractual obligations.”

EYE was told yesterday by a respected lawyer totally unconnected with the case: “The recoverable costs have not been limited. The costs budget has. This is not an absolute fetter on ultimately recoverable costs but certainly makes recovery of costs over and above the budget improbable.

“GH had already spent £1.2m and were limited to just under another £1m, making total costs approved £2.2m as against their ask of £2.8m.

‘What they get at the end will be up to the costs judge at the time, but certainly having their budget trimmed is a bad day out for them.”