The judgment of H.H. Judge Simon Brown Q.C in Excelerate Technology Ltd -v- Cumberbatch  EWHC B1 Mercantile addresses the issue and the Court’s approach to any out of scope work in respect of Precedent H Costs Budgets.
In the case, areas of the Claimant’s costs fell outside of the scope of their approved budget and the Claimant made a claim for those additional costs. HHJ Simon Brown accepted that the claim for out of scope costs could be assessed independently of the budget and allowed a further £12,330.00. These costs related to 2 interim hearings, an application and the costs of the First Defendant’s IVA.
HHJ Simon Brown demonstrated how PD 3E (para 7.9) to CPR Part 3 can be applied (para 7.9 of PD 3E – If interim applications are made which, reasonably, were not included in a budget, then the costs of such interim applications shall be treated as additional to the approved budgets.
The importance of detailed assumptions has now been seen in practice. Without these detailed assumptions, establishing and formulating an argument to support any out of scope work would have been a challenging and perhaps impossible task.
Focusing on the scope of the budget is, as we are all aware, essential. However, the continual analysis of the case plan is paramount. Yet again we see a further instance of the new wave of legal project management. As a result of efficient project management, the Claimant was able to persuade the Court that a further £12k could be claimed in addition to the amount of the budget, resulting in an increased recovery of costs.
Interestingly, the court allowed a substantial payment on account of costs in the sum of £155,409.66, despite the fact that this was disproportionate to the judgment debt of £158,243.00 in assessing a reasonable percentage for an interim payment. This is a further instance of a budget being the determining factor when quantifying the level of the payment on account of costs, adding weight to the decision in the case of Thomas Pink v Victoria Secrets UK Ltd  EWHC 3258 (ch) where a payment on account of costs of 90% of the budget was awarded.