Tag: budgets

Should the courts be able to interfere with Costs Budgets which have been agreed between the parties?

Joanne Chase1 Comment

The rules state that the court will ‘record the extent to which the budgets are agreed between the parties’. Many of us have experienced the court’s refusal to approve those negotiated budgets and have been infuriated with their insistence on interfering with the budget. LJ Jackson, in his draft report, initially wanted the court to be able to alter agreed budgets, however the final report included the provision that the court ‘will record the extent to which the budgets are agreed’.

Lawyers should proceed with caution when attending a CMC where the budgets have been agreed. The sensible approach would be to assume that, once the budget has been agreed, then the budget can be ignored. Alas, this is not the case! The courts are indeed interfering with the budgets, clearly parties are surprised by this approach. I would advise that parties continue to undertake some preparatory work regarding the budget, albeit not to the same extent as would have been required if the costs were contested.

An interesting technical point – if the budgets have been agreed, are they technically ever approved? Note the reference in the CPR to ‘record’ rather than ‘approve’. More to ‘chew the fat’ over some mince pies; or ‘mull over’ some mulled wine.

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Incurred Costs – Shifting Change

Joanne ChaseLeave a comment

LJ Jackson has recognised there are problems surrounding incurred costs. As predicted by many, he is concerned that some parties will undertake as much work as possible before the case management conference, thereby putting large swathes of costs outside of the reach of costs budgeting. This tactic of “front loading” goes against the very essence of what costs budgeting stands for.  LJ Jackson in his lecture earlier this year referred to incurred costs, stating that “a residual power to set a global figure for both incurred and future costs for any phase is to be introduced”.

His suggested solutions are sensible ones – (1) the court should have the power to comment on the incurred costs and to summarily assess those costs at the case management conference, if necessary; or alternatively (2) the court should be able to set a global figure for any phase, to include both incurred and future costs. This would be a welcome development in the task of controlling costs via the costs budgeting regime. The clear benefit to parties is that at the conclusion of the case where costs have fallen within limits of the budget, then parties may start to experience their costs being allowed in full, including the incurred costs. At present, when a party has actively managed their case effectively and efficiently, the incurred costs continue to be subject to either detailed assessment or summary assessment. LJ Jackson’s proposal would avoid this expensive and costly assessment process.

If this proposal was to be encompassed into any future revisions to the rules, then the parties to the litigation would begin to encounter some additional benefits. LJ Jackson has also suggested an introduction of pre-action costs management principally for clinical negligence costs. It appears there is a shift towards applying more focus to the issue of incurred costs in the future.

LJ Jackson’s proposal to change the position regarding incurred costs is one of the many steps needed to make costs management work.

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

New deadlines for filing Costs Budgets

Joanne ChaseLeave a comment

The CPRC’s committee has agreed to amend the timeframe for the filing and service of budgets. Claims that are worth less than £50,000, budgets will need to be filed with the directions questionnaire.  Claims worth more than £50,000, budgets will need to be filed 21 days before the case management conference.  They have not released a date yet for the implementation of these changes.

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

Pre-budget costs are highly relevant – Redfern –v- Corby Borough Council (QBD 03.12.14)

Joanne ChaseLeave a comment

It is quite clear within the CPR that any costs which have been incurred should be considered when assessing future costs, however as we are all aware, these costs can neither be approved or disapproved, only comments can be recorded (CPR Part 3, para 7.4 of PD 3E). As part of the costs management process the court may not approve costs incurred before the date of any budget. The court may, however, record its comments on those costs and will take those costs into account when considering the reasonableness and proportionality of all subsequent costs.

In the case of Redfern –v- Corby Borough Council (QBD 03.12.14), the Judge applied this principle and relied upon the incurred costs in accordance with PD 3E when assessing the future costs.

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

When a Costs Budget is appealed – Havenga –v- Gateshead NHS Foundation Trust

Joanne Chase1 Comment

We now have some guidance regarding the approach which the Court may adopt regarding appealing the amount of an approved Costs Budget.

 In Havenga –v- Gateshead NHS Foundation Trust [2014] EWHC B25 (QB), the Court found that it was ‘not the role of the appellate Court to tinker with Costs Budgets’ and ‘the role of the appellate Court, in these circumstances, is to decide whether the Budget as revised by the District Judge was reasonable and proportionate. Only if I conclude that the revised Budget was outwith what can be described as reasonable and proportionate and that, therefore, the District Judge had exceeded his wide ambit of discretion can I interfere with the overall Budget’.

Although the Judge did feel that he may have been more generous in some areas of the Budget, he considered that as a whole, the Budget was both reasonable and proportionate and the appeal was dismissed.

Perhaps this approach will avoid unnecessary and unreasonable requests for appeals and will ensure a cost effective and pragmatic approach to Costs Budgeting, or will it result in increased costs?  This may encourage more Lawyers to have both Counsel and the Costs Lawyer at the costs management hearing, so that any risk of comprehensive arguments not being made is avoided.

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