Author: Bethany Collings

Reserved Judgments and timing of applications for costs

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The recent case of Preston v Beaumont [2022] EWHC 440 (Ch), is an example of the court adopting a strict approach to the mandatory requirements of a practice direction. In this case the court was concerned with the interpretation of paragraph 4.4 of Practice Direction 40E when faced with a late application for costs following a reserved judgment and a failure to seek relief from sanctions.

The court had dismissed an appeal against the Orders of DDJ Mackenzie dated 25 February 2021 and 5 March 2021. The First Judgement was provided to the parties in draft on 2 February 2022, and minor corrections were received on 4 February 2022. Neither party requested a further hearing, and no applications were made. The first judgement was handed down on 8 February 2022.

The parties sought to agree costs, however, they were unable to do so. This meant that the terms of the Order had not been agreed and no sealed Order had been issued. The Appellant’s position was that no application for costs was made ahead of the handing down on 8 February 2022 and, under the terms of paragraph 4.4 of Practice Direction 40E, it was too late to do so.

The Respondent relied on three arguments: (1) in the case of Re Barrell Enterprises [1973] 1 WLR 19, a judge remained seised of a case until the order disposing of it is drawn up and sealed, and so continues to have the power to make orders on consequential matters;(2) the Respondent also stated that when the court asked whether a hearing was required to address consequential matters, no time frame was specified for a response; and (3) the Respondent acknowledged that “an application for a consequential order should be made by 12 noon the day before judgement is to be handed down”. However, because the court retained jurisdiction, the Respondent’s failure to comply with the time limits in paragraph 4.4 of Practice Direction 40E in making his application for costs was not fatal and the court could still deal with his application.

None of the Respondent’s arguments found favour with the judge who ruled that paragraph 4.4 is not framed in terms on what parties “should” do, it addressed what parties “must” do. The judge agreed with the Appellant that this was properly a question for a relief from sanctions and the Respondent had failed to make an application.  

Moreover, the Judge clarified that if the Respondent wanted to seek his costs, then an application should have been made within time permitted. As he had not done so, relief from sanctions was required, and he needed to explain the failure to comply with the practice direction, which was not done.

You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilandCommercialCosts@clarionsolicitors.com.

Proposed increases to court fees to proceed

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Court and Tribunal Fees – The Government response to the consultation on ‘Increasing selected court fees and Help with Fees income thresholds by inflation’

Following a consultation process, the Government will be proceeding with proposed increases to Court fees. the changes are likely to come into force in early Autumn. The proposed fee increases reflect inflation and are not therefore real terms increases.

The proposed increases will effect the costs  of detailed assessment as set out below.

DescriptionCurrent FeeIncreaseFinal fee  
Assessment of costs (under Part 3, Solicitors Act 1974)  £55+£4£59
Where the party filing the request is legally aided  £220+£17£237
Costs up to £15000  £369+£29£398  
Costs £15000 – £50000  £743+£58£801  
Costs £50000 – £100000  £1,106+£86£1,192  
Costs £100000 – £150000  £1,480  +£115  £1,595  
Costs £150000 – £200000  £1,848  +£144  £1,992  
Costs £200000 – £300000  £2,772  +£216  £2,988  
Costs £300000 – £500000  £4,620  +£360  £4,980  
Costs Above £500000  £6,160  +£480  £6,640  
Issue of default costs certificate£66  +£5  £71  
Appeal (detailed assessment proceedings)£231  +£18  £249  
Request/application to set aside a default costs certificate  £121+£9£130  

There will also be an effect on the costs of assessment in Court of Protection cases:

On the filing of a request for detailed assessment for Court of Protection  £85£2£87  
Appeal against a Court of Protection costs assessment decision  £65£5£70  

Bethany Collings is an apprentice paralegal in our Costs and Litigation Funding team. If you have any questions, please contact her on 0113 227 3607 or at Bethany.Collings@clarionsolicitors.com

Footballers’ wives and their extraordinary budgets

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In the much-publicised libel claim of Rebekah Vardy v Coleen Rooney, each party was required to file a costs budget that detailed the costs incurred to date and the amount of costs they estimated would be incurred to trial.

The budgets were considered by Master Eastman at a brief preliminary hearing on Tuesday. Mrs Rooney’s sought estimated costs in the sum of £402,312 whilst Mrs Vardy’s budget sought estimated costs in the sum of £465,842. In addition, Mrs Vardy had incurred circa £431,000 in costs pursuing the claim to date.

Defending the level of costs stated within Mrs Vardy’s budget, Ms Mansoori, who is the barrister representing the Claimant, said that the budget “reflects the complexity, scope and scale of the legal and factual issues”.

Master Eastman commented that both budgets were “extraordinarily large”, and he urged the parties to try and reach an amicable agreement in the matter. He also ordered that revised costs budgets be filed in June.

90% Payment on Account where there is a costs budget “Still the Norm”

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Earlier this week, following the judgement in Puharic v Silverbond Enterprises Ltd [2021] the High Court confirmed that a 90% payment on account of costs was a reasonable sum for the claimant paying party to have to advance to the successful defendant receiving party. The Claimant had initially offered 50%.

Gavin Mansfield QC, sitting as Deputy Judge of the High Court, said: “the Claimant’s proposal fails to have regard to the developing body of law as to the relationship between costs management and detailed assessment“ and went on to comment that at detailed assessment, pursuant to CPR 3.18, the court will not depart from the approved or agreed budget unless there is a good reason to do so per MacInnes v Gross [2017]. In this case it was found that approved budgeted costs should only be reduced by a maximum of 10%.  Thomas Pink Ltd. v Victoria’s Secret UK Ltd [2014] was also referenced as an example of where 90% of the approved budgeted costs were awarded.

As no submissions were made by the Claimant in the Puharic case to suggest that there would be a good reason to depart from the approved budget, 90% of the approved budgeted costs were ordered to be paid as an interim.

In relation to incurred costs by the time of the CCMC, the Judge asserted that the same point was not applicable as these costs were not subject to the court’s approval. Guidance in accordance with the case of Excalibur Ventures LLC v Texas Keystone Inc [2015] was followed instead. The incurred costs related to the pre-action, issue/statement of case and CCMC phases. The Defendant’s incurred costs of £11,010 for the CCMC phase were recorded in the CMO as “a little high for that phase, but not significantly so” and £10,000 was deemed to be reasonable. There were no issues noted in relation to the pre-action or issue/statements of case phases and so 70% of the incurred costs were deemed a reasonable sum for the purposes of an interim payment.

In relation to the PTR phase, the Defendant sought only 50% of its budgeted costs, because even though work was carried out in this phase, the hearing was vacated.

The Claimant was ordered to make a payment on account of costs in the sum of £187,121.13.

Penalty for failing to serve a costs budget is variable

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The sanction for failing to file a costs budget is clear under CPR 3.14; court fees only, unless the court otherwise orders. The CPR is silent however on the penalty for failing to serve a costs budget.

An unreported case was referred to recently in the ACL Costs News bulletin which described how a claimant who failed to serve their budget had their CMC costs cut in half as a penalty. The result of the failure to serve the budget led to the opponent having a reduced timeframe to prepare the budget discussion report but it did not prevent the CMC from going ahead. In this instance the Claimant did not need to seek relief from sanctions as the requirement to do so, where the CPR is silent, is not automatic.

In Djurberg v London Borough of Richmond and Others [2019] EWHC 3342 (Ch) it was held that a party in breach does not need to apply for relief from sanctions where it is not expressly required. At paragraph 32 Chief Master Marsh stated:

“it would be wrong for the court to search out reasons for imposing sanctions that do not obviously arise out of the terms of the CPR or an order made by the court.”

The judgement in this case also explored the possibility of the order containing an implied sanction, a concept that R (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633 referred to in relation to filing an appeal in time. In circumstances where there is an implied sanction, a sanction where relief from sanctions is not necessary but where it has become common practice to impose the same sanction as if it were, the consequence would be the same.

To rely on submissions that the opponent was not prejudiced by any failure to serve a budget does not therefore come without risk, and so to avoid any penalty whatsoever, the best approach to take when filing a budget is to serve it too.

This does not preclude parties agreeing to the mutual exchange of budgets and for certain cases this can be the best strategy to adopt. If this approach is accepted by the parties then any agreement of mutual exchange should be made prior to the final date for filing to avoid facing any criticism.

Bethany Collings is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact her at Bethany.Collings@clarionsolicitors.com and 0113 227 3607, or the Clarion Costs Team on 0113 246 0622