In Simpson v MGN Limited & Anor  EWHC 126 (QB), the Claimant failed to submit a revised costs budget to include the costs of a preliminary issue trial and failed to serve a costs statement on the Defendant.
The budget, which the Claimant had filed at the first cmc, included a contingency for a preliminary issue trial. This was not agreed between the parties and the Judge neither agreed nor approved this, simply marking the phase with N/A. The Defendant had also included a contingent phase for the preliminary issue, however the parties had managed to agree the amount, which the court recorded.
The Defendant argued that the costs relating to the preliminary issue trial should not be allowed on the basis that the Claimant had failed to seek a revision. The Judge considered the sequence of events, which included the Claimant providing the Defendant with an updated budget to include the preliminary issue phase. Despite the Claimant failing to request a revision from the court, the Judge found that disallowing the costs would be an unjustly disproportionate sanction, not sufficiently justified by the overriding objective.
The Judge commented as follows:
“The application of the wording of CPR 3.18(b) is not so straightforward in the circumstances of this case, where (a) the receiving party has put forward a budget for this phase of the litigation but one that is not agreed or approved, or disapproved but considered inapplicable; and (b) the paying party has prepared a budget for this phase which has been agreed. I am inclined to think that the wording of CPR 3.18 was not aimed at such a situation, but rather at ensuring that once the court has reached a decision on what it is reasonable for a party to spend on a given phase that conclusion should be final in the absence of some good reason. However, that was not a point addressed in argument and I reach no conclusion on it. Assuming that I am wrong in this it seems to me that on the facts of this case there is good reason to depart from the budget approved by Master Yoxall for this phase of the litigation, by allowing recovery of some costs by the Claimant”.
The Judge also applied the principles in the CPR regarding failure to serve a statement of costs and used his discretion to reduce the statement of costs by 10%.