Tag: budgets

Revising your budget – what is a ‘significant development in the litigation’?

Joanne ChaseLeave a comment

Budgets can only be revised if there has been a ‘significant development in the litigation’.  Unfortunately the CPR is devoid of any comment or explanation regarding what a ‘significant development in the litigation’ is.  In the recent case of Churchill -v- Boot (22/04/16) the court determined that the budget could not be revised because no such development had occurred.

The value of the claim had doubled since the original budget had been approved, the trial had been delayed and there had been additional disclosure.  The Judge found that there had not been any significant developments since the date that the previous budget was approved and refused to vary the budget.  The Claimant appealed to the judge who held that:

  • He was not satisfied that there had been significant developments
  • The increased value of the claim did not mean that there would be higher costs. The parties already had permission to call the relevant experts.
  • The additional disclosure was clearly foreseeable when the costs budget was set.
  • An adjournment could potentially be a significant development. However on the facts of this case it was not.
  • The master had exercised his discretion appropriately there were no grounds to interfere with the exercise of that discretion.

This demonstrates the need to interpret the case and accurately formulate the case plan prior to preparing the budget.  The judge gave consideration to what the parties should have known when the budget was prepared, rather than simply relying on the assumptions to support the revision of the budget.  Accurate assumptions are essential despite the recent amendment to the rules which encourage condensed assumptions.

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

Negotiate, negotiate, negotiate

Andrew McAulayLeave a comment

The court has awarded costs against a party who has claimed unreasonable amounts in their budget.  In the case of King & Anor v Thipthorp & Ors [2016] EWHC 3859 (COP) the court reduced areas of the budget due to unreasonable claims and disproportionate amounts.  Although the budgets appeared overall not to be excessive, the budget was still reduced in relation to particular items.  This is contrary to the intended approach of the court, which is to adopt a global approach when considering reasonableness.  Furthermore the CPR is to be amended with regards to this global approach, confirming that hourly rates within budgets should not be set – here is a link to my previous blog regarding the yet to be implemented changes Least worse option.

The court ordered that the costs of the challenge could be recovered by the party objecting to those items.

Negotiations are key to successful costs management, avoiding the litigation risk associated with any hearing is certainly beneficial.  Furthermore, in view of the amendments to be made to the CPR regarding parties having to file “an agreed budget discussion report which sets out the agreed and disputed areas for each phase and a brief summary of the grounds of dispute schedules of agreed/disputed areas with the budgets”, negotiations have never been so important.

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

The expense of foreign witnesses attending trial

Joanne ChaseLeave a comment

Kimathi -v- Foreign and Commonwealth Office

This is an interesting case which has an impact on both bills and budgets.  There have been discussions in the past about whether witnesses could perhaps, in this technological era, attend court via video link rather than in person, thus avoiding the associated expenses of travel.

This case involved a dispute regarding whether certain Claimants were able to travel.  It was held that those Claimants that were capable of travel to England should travel and attend at the trial.  For those where there was a dispute regarding fitness levels and whether they could travel, it was held that they could give evidence by video link if they preferred.  Finally those witnesses that simply didn’t want to travel and were medically fit to travel, they should travel to England.

This case has quashed the video link argument, it can assist with any counter arguments against any issues raised regarding the expenses associated with foreign witnesses travelling to attend court.  Furthermore, foreign travel should ALWAYS be included in budgets and arguments should be raised to justify the same at any CMC, particularly reliance on the above case.

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

The CPRC least worst option! How to resolve the position regarding negotiating budgets

Andrew McAulayLeave a comment

Negotiations

The Civil Procedure Rules Committee has amended the rules to include a new rule 3.13(2), in the event that a party files and exchanges a budget, all other parties will have to file an agreed budget discussion report which set out the agreed and disputed areas for each phase and a brief summary of the grounds of dispute – something many courts have been ordering for some time.  The CPRC have described this as their “least worst option”!

The debate over hourly rates!

The Practice Direction is to be amended regarding hourly rates, it is confirmed that they will not be set and puts an end to this much debated area – “The making of a costs management order under part 3.15 concerns the totals allowed for each phase of the budget. It is not the role of the court in the cost management hearing to fix or approve the hourly rates claimed in the budget. The underlying detail in the budget for each phase used by the party to calculate the totals claimed is provided for reference purposes only to assist the court in fixing a budget.”

That said, consideration will have to be given to the hourly rate, how can the claim be quantified without an hourly rate? I agree with not setting the hourly rate and when I negotiate I don’t agree to the setting of the hourly rate, however, I may agree to the hourly rate for quantification purposes.  My aim is not to have the rate set for the purposes of detailed assessment, unless of course there is no reason for the hourly rate to be disputed.

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

Five Gold Rings!

Joanne ChaseLeave a comment

I have been preparing budgets for over 5 years, during the pilot scheme and onwards. I have prepared budgets in all areas of law and I have drafted well in excess of 1,000 budgets, so I would like to share with you my 5 Gold Rings!

  1. File your budget well in advance of the hearing, this allows parties to negotiate properly.
  2. Mutual exchange.  Agreeing to mutually exchange the budgets may be beneficial, it may assist your case if neither party is aware of the opponent’s budget. This may help strategically and stop parties adapting their budget, following consideration of the opponent’s budget.
  3. Only include foreseeable contingent costs, the rules are clear regarding this. Do not include every eventuality, consider how you think your case will proceed and only include the relevant contingencies.
  4. Filing v service. This is a cute point. The court sanction only relates to failing to file rather than failing to serve. If you are experiencing a tight deadline then file your budget first rather than serve. Obviously I am not condoning a lackadaisical approach to service, however it is something to bear in mind if time is of the essence.
  5. The rules provide for downward revisions of budgets. This is a good point to remember. Defendants often consider budgeting to be a waste of time, simply a box ticking exercise, this is usually defendant insurers or defendants that will be subject to QOCS. However, if there are material changes to the case, then it may be appropriate to seek a revision downwards. This is a good tactic for the defendant because it may reduce their costs liability – so defendants, please do not ignore the budgets.