Tag: clarion costs blog

Partial strike out of the budget – Page v RGC Restaurants Ltd!

Andrew McAulayLeave a comment

Partial strike out of the budget in the case of Page v RGC Restaurants Ltd !

Be wary when preparing budgets, do NOT prepare a budget up until a particular stage, unless the court orders otherwise. In this case, the Claimant had decided to prepare their budget up until the PTR stage only, the Master found that they had not complied with the CPR and limited the budget to court fees only. The Claimant appealed the decision on the grounds that a budget had been filed, questioning the Master’s irrational approach of limiting the budget to court fees, claiming that CPR 3.15 (the fact that the parties had agreed the Claimant’s budget up to the PTR stage) trumps the sanctions imposed by CPR 3.14 and submitting that the default sanction should be dis-applied. 

On appeal, the Master found that this was partial non-compliance rather than full non-compliance. So rather than striking the full budget out, the court struck out those phases of the budget where forecast costs had not been provided.

It has to be said, the preparation of partial budgets makes assessing proportionality impossible, which is an essential part of costs management. 

In practical terms, this is important for split trials. My advice has always been NEVER to prepare a budget up to the first trial, unless the court orders otherwise as there is the risk that the court will deem this to be non-compliant and the budget may be reduced to court fees. We now have case law which provides guidance regarding the approach to be adopted, which is helpful.  

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

Good news for those that prepare an accurate costs budget

Joanne Chase1 Comment

Following on from the Court of Appeal decision in Jacqueline Dawn Harrison v University Hospitals Coventry & Warwickshire NHS Trust [2017] WECA Civ 792 where the Court of Appeal found that:

  • The budgeted costs will not be departed from in the absence of a “good reason”;
  • Incurred costs do not form part of the budgeted costs;
  • The good reason test does not apply to those incurred costs;
  • The proportionality test can be applied to the final claim for costs, despite the proportionality test having been applied when the costs budget was approved.

As predicted, we have seen that in practical terms this is good news for those that prepare accurate budgets, but not so for those that don’t. The practical implications of this Court of Appeal decision has an impact on the recovery of your legal fees, as follows:

If the budget has not been exceeded:

  • The budgeted costs will be allowed in full unless a good reason is demonstrated to depart from the budget;
  • A detailed assessment of the budgeted costs can be avoided.

If the budget has been exceeded:

  • The budgeted costs will be restricted to the amount of the budgeted costs that were approved, unless good reason can be demonstrated to depart from the budget.

Win win for those with well prepared budgets. In addition, following approval of the budget, further consideration should be given to the budget throughout the lifetime of the claim. Examples of which are as follows:

Q1. Is it necessary to consider the budget in preparation for the trial?

Answer – yes.

If you win and your budget has not been exceeded:

  • Ask the court to order that the budgeted costs claimed are allowed in full;
  • Only incurred costs will be assessed by way of detailed assessment;
  • If the trial is less than one day, ask the court to summary assess the incurred costs. The court may assess the budgeted costs, however if the costs fall within budget, these should be allowed in full. Present your budgeted costs in phases to demonstrate to the court that the budget has not been exceed on a phase by phase basis;
  • Assess any potential good reasons that your opponent may raise to depart downwards from your budget and be ready to defend those arguments;
  • Ask for a payment on account of the incurred costs, these remaining costs being subject to assessment.

If you win and your budget has been exceeded:

  • If no good reason can be demonstrated to depart from your budget, the court should limit your claim for costs to the approved budget amounts;
  • Therefore establish a good reason to depart from the budget so that the costs can be assessed by way of detailed assessment rather than being restricted to the approved amount of the budget. This will provide you more of an opportunity to justify your costs and overspends;
  • Request a payment of the approved costs, payable within 14 days;
  • Request a payment on account of the remaining incurred costs, payable within 14 days.

If you lose and your opponent’s budget has been exceeded, their budgeted costs should be limited to the budget:

  • The winner can obtain costs in excess of the budget if they can show a good reason to depart from the budget, so be ready so defend any good reasons that the winner may raise to depart from the budget.

If you lose and your opponent’s budget has not been exceeded, their budgeted costs should be limited to the budget:

  • A good reason is required to depart from the budget, therefore if you can identify a good reason to depart from the winner’s budget you can secure a reduction to the winner’s budgeted costs.

Q2. What are examples of a good reason?

Answer – examples of a good reason to depart down are:

  • Did the winner undertake all the work that was provided for in the budget?
  • Were there any adverse costs orders, amount needs to be excluded from the budget?
  • Proportionality test – does the proportionality test that was applied at the CCMC require revisiting?

Q3. Why raise those good reasons at the trial?

Answer

  • Defers the assessment of costs to detailed assessment, if deemed beneficial;
  • Minimises the amount of the payment on account;
  • Minimise the amount of budgeted costs payable.

Remember, incurred costs are subject to detailed assessment in the normal way – ensure that the court is aware that this is only applicable to budgeted costs.

Q4. What role does the budget have in securing a Payment on Account?

Answer – the court will scrutinise the amount that was approved in the budget when determining the amount of the payment on account.

  • If the court refuses to order the payment of your budgeted costs in full, and opts to order a payment on account instead, request the following amounts:
    • Thomas Pink Ltd v Victoria’s Secret UK Ltd [2014] EWHC 3258 (Ch) (31 July 2014) – POA of 90% of budget;
    • Cleveland Bridge UK Ltd v Sarens (UK) Ltd [2018] EWHC 827 (TCC) – POA of 70% incurred costs and 90% estimated costs.
  • Be ready to defend any good reason to depart from the budget that your opponent may raise, this will assist in securing the maximum payment on account, conversely remember to raise any good reason arguments to depart down if you are payer rather than payee.

Q5. What role does the budget have at the mediation or settlement meeting?

Answer – the budget enables parties to be fully aware of their costs exposure, so an informed decision can be made when determining whether to settle. Update the budget for the ADR meeting so that costs may be agreed at the same time and be ready with the same arguments in terms of departure from the budget that would be applied at the trial.

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

Points of Dispute and Replies: The Dos and Donts

Laura SugarmanLeave a comment

CPR 47 provides that Points of Dispute and Replies should follow “as closely as possible” the format of Precedent G. CPR 47.9 allows for the paying party to raise disputes to points in the Bill of Costs drafted by the receiving party.

Points of Dispute ‘must be short and to the point’; parties are expected to make their point in a succinct and concise way. In the recent case of Mead v British Airways PLC, the Defendant spent over seven pages setting out one point of dispute. The claimant’s reply was two pages. District Judge Moss accepted the Claimant’s position and the point was dismissed. This is a clear example that a point can be raised and dealt with concisely without the need for disproportionate and lengthy argument. Indeed, in our experience less is often more and judges can be put off and confused by excessive Points of Dispute or Replies. It is not uncommon to see assessing judges commenting to the effect that Points of Dispute were too long and whilst this may not directly affect the outcome, it may well make the judge less well-disposed to a party in the assessment.

Practitioners tempted to set out Points of Dispute or Reply at great length should bear in mind the cautionary tale of Mylward -v- Weldon [1595] EWHC Ch 1, in which the court held that the matters in dispute could have been set out in 16 pages, rather than the 120 page bundle which the claimant’s lawyer had filed. The court ordered that the claimant’s legal representative should be brought to court, and the warden “shall cut a whole in the myddest of the {bundle}, and put {the lawyer’s} head through the hole, so that it hangs about his shoulders; and then shall lead him bare headed and bare faced round about Westminster Hall whilst the Courts are sitting and shew him at the bar of every of the three Courts within the Hall, and shall then take him back again to the Fleet {prison} and keep him prisoner until he shall have paid £10 to Her Majesty for a fine, and 20 nobles to the defendant for his costs in respect of the aforesaid abuse”.

That said, it is imperative for parties to explaining the reasoning as to why they dispute an item in a Bill of Costs. It is not enough to merely state that an item is disputed; the reasons for the dispute must be disclosed. The onus is on the parties to find the correct balance of getting the point across and providing the required information to ensure the point/reply is agreed with by the DJ.

When filing Points and Replies, it is imperative all parties know the relevant dates they are required to adhere to. For context, when a formal Bill of Costs is served by the receiving party, with an N252 will be served. This gives the date for which Points of Dispute are required to be served, which in general is 21 clear days following the date of service. The paying party is permitted to request an extension of time for this, and it is at the discretion of the receiving party to grant or deny the same and there are consequences for failure to comply. Whilst the Rules state that replies to points of dispute must be filed within 21 days of receipt of the points of dispute, there is no sanction for failure to comply. Therefore there is less risk to a receiving party which serves its Replies out of time, however it is possible for the court to impose a sanction (though this is not automatic). CPR 47.13 stipulates that the receiving party may reply to the points of dispute and the receiving party may do so within 21 days. This was supported in Pipe v Electrothermal Engineering Limited where it was confirmed that the receiving party is not limited to 21 days to respond.

The main differences between the paying and receiving party are as follows: should the paying party fail to serve points of dispute within the 21 days, there could be cost implications and the receiving party would be permitted to apply to the court for a Default Costs Certificate, which is an order that the costs claimed by the receiving party be paid in full (effectively a Default Judgment in costs). Whilst it may be possible to apply to set a Default Costs Certificate aside, there is inevitably a risk that the application will not be granted and it is likely that there will be a costs sanction to the receiving party even if it is.

In summary, parties should always follow Precedent G; always ensure points and replies are short and to the point. When undertaking costs proceedings, always be aware of the deadlines and dates to adhere to ensure you are not subjecting your client to unnecessary costs.

Are you J Code ready?

Joanne ChaseLeave a comment

The J-Codes are a set of electronic codes proposed by Jackson LJ, where time is recorded in phase, task and activity. These codes were first published in July 2014 and over 3 years later the MOJ have now included guidance in their 92nd update to the CPR regarding phase, task and activity time recording. The MOJ have decided not to adopt the full J-Code structure proposed by Jackson LJ and have published an alternative and apparently simpler version of the Phase, Task, Activity (PTA) approach. That said, J-Codes can still be adopted or the Phase, Task, Activity (PTA) method can be used, it is down to choice.

The electronic bill of costs is mandatory for all Part 7 multi-track claims from 6 April 2018 and therefore Phase, Task and Activity codes (PTA codes) are crucial.  J Codes/ PTA codes however are not mandatory, although it is expected that any additional costs associated with the drafting of the electronic bill of costs due to PTA code time recording not being adopted, may not be recoverable on an inter-partes basis.

This only applies to work undertaken from 6 April 2018.
Recording time in line with phase, task and activity will at last enable budgets to be monitored with ease.

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

Proportionality and budget comparisons

Joanne ChaseLeave a comment

Budgets were once again considered in the case of Red and White Services Ltd v Phil Anslow Ltd & Anor [2018] EWHC 1699 (Ch). This was a competitions claim about a bus company and its parking bays. In summary, the Claimant had the use of more parking bays than the Defendant, the Claimant sued the Defendant for trespass and the Defendant in turn brought, by way of a counterclaim, a competitions Act law claim against the Claimant and pursed a Part 20 Competitions Act claim against the Third Party.

All parties were ordered to prepare budgets with the Claimant’s and Third Party’s budgets being in similar amounts, each in the region of £1.5 million; and the Defendant’s budget coming in at just less than £300,000.00.

The Defendant not surprisingly submitted the Claimant’s and the Third Party’s budgets were seriously disproportionate, given that the damages in this claim were likely to be in the region of £80,000 to £120,000.

Mr Justice Birss commented that “It is essentially, although these are my words not counsel’s, an attempt to create figures for costs which are unrealistically low for the purpose of budgeting and to act as an unfavourable contrast to the figures from the claimant and the third party”

He considered proportionality and commented…

“I do not regard the budget costs figures in this case as proportionate or reasonable, particularly given the relatively limited nature of the disputes between the parties. The individual dispute which is worth the most is the overpayment/overvaluation claim. That will involve some quantity surveying evidence, although experience of such disputes leads me to suspect that this will not necessarily be extensive: the various valuation items in issue will probably fall into a handful of types or categories, so that once an expert has addressed the leading items in each category, there will be little left for the expert to do. The defects are a relatively modest element of this claim, so that even if they required both M and E and architectural experts, the involvement of such experts ought to be relatively limited.

He further commented that ..

“It is a matter for the defendant to have chosen to join both of those independent companies and therefore the fact that the two budgets together, each of £1.5 million, mean that the defendant could be bearing a cost risk of £3 million, does not seem to me to be a matter of great significance on the facts of this case. The individual budgets are the figures I need to consider, not the net risk to the defendant of aggregating the two.”

The judge, after applying the proportionality test and refusing to make comparisons with the Defendant’s budget, approved budgets for the Claimant and Third Party each in a sum not exceeding £800,000.00.

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

What role does the hourly rate play in the budget?

Joanne ChaseLeave a comment

This continues to spark debate. The rules states that the hourly rate cannot be set (CPR 3 PD 3E, para 7.10), but further explain that the constituent elements of the budget should be considered when assessing the amount to approved (CPR 3 PD 3E, para 7.3). So, with the hourly rate falling under the umbrella of a ‘constituent element’ the hourly rate can be taken into account, but importantly, not fixed. There will usually be a number of factors that contribute to a reduction of the budget and on occasions the level of the hourly rate may be one of those contributing factors.

Parties are often working blind in respect of the logic that the case management Judge applied. If the court did take the hourly rate into account when reducing the amount of estimated costs sought, and no evidence exists to support the Judge’s thought process, what happens when the costs are finally assessed?

At the moment there is conflicting case law in this regard.

In RNB v London Borough of Newham [2017] EWHC B15 (Costs) Deputy Master Campbell said “If (as it is the case) the hourly rate is a mandatory component in Precedent H which is not and cannot be subjected to the rigours of detailed assessment at the CCMC, it makes no sense if it is automatically left untouched when the rates for the incurred work are scrutinised at the ‘conventional’ assessment.”

“Such an approach would offend against the guidance given in Harrison at paragraph 44. Indeed, as [counsel for the defendant] points out, it is only on that occasion that a paying party has an opportunity to challenge the rate.”

This was therefore a “good reason” to depart from the costs allowed in the claimant’s last approved budget.”

However in  Nash v Ministry of Defence [2018] EWHC B4 (Costs) –  Master Nagalingam found that “a reduction in hourly rates of the incurred costs is not a good reason to depart from the budget in respect of the budgeted (future) costs”.

And finally, in Jallow v Ministry of Defence [2018] EWHC B7 (Costs) Master Rowley found “that there is no good reason to depart from the budget by virtue of the reduction to the hourly rates in this case”.

How can the legal profession employ the rules as currently drafted? Is it possible to gain clarity and a clearer view of the blind logic/working approach adopted by the Judges? If, during the course of the CMC, the Judge does comment on the hourly rate, ask him/her to record a note on the case management order that the hourly rate was considered when approving the budget and that it played a role in the reduction to the rates.

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

Make sure your costs budgets, statements of costs and bills of costs are prepared correctly!

Andrew McAulay1 Comment

The Court of Appeal recently handed down Judgment (Gempride -v- Jagrit Bamrah and Lawlords of London Limited [2018]) in a case which involved alleged misconduct in detailed assessment proceedings.

The underlying claim related to a claim by Ms Bamrah against Gempride for personal injuries. The claim settled by way of CPR 36 on 18 March 2013 for £50,000.00. Ms Bamrah initially dealt with the claim through her own law firm (Falcon Legal) before the claim was transferred to David Stinson & Co.

The case dates back to 2014 where Master Leonard in the Senior Courts Costs Office struck out Part 1 of the Claimant’s bill of costs (insofar as the costs exceeded the fixed hourly rate recoverable by litigants-in-person) due to mis-certification, on the basis that:

  1. the bill contained incorrect hourly rates; and
  2. mis-leading information in relation to Before-the-Event (BTE) insurance was provided in the Replies to Points of Dispute.

The Claimant successfully appealed that decision before His Honour Judge Mitchell in the Central London County Court. One of the most notable reasons for the reversal of the decision was that the judge found that the Claimant was not responsible for the acts and omissions of the costs consultants that were instructed (Lawlords of London Limited).

The Defendant (Gempride) appealed and was successful before the Court of Appeal. In respect of the instruction of Lawlords of London Limited, and the very important point about a Solicitor not being responsible for the acts of omissions of an agent, Lord Justice Hickinbottom said:

“At a time when new business practices mean that solicitors are more frequently subcontracting work out to the unauthorised, it seems to me to be an important matter of principle that solicitors on the record – and other authorised litigators and ‘legal representatives’ for the purposes of the CPR – understand that they remain ultimately responsible for the acts and omissions of those to whom they delegate parts of the conduct of litigation, particularly where those to whom such work is delegated are not authorised… it is only in that way that the supervisory jurisdiction of the court can be effectively maintained…”

“The reverse side of that coin is that, because the solicitor has responsibility for the conduct of those to whom he subcontracts work for which he as a solicitor has been retained, then he is able to charge for that work at an appropriate rate as profit costs (together with any success fee uplift under a CFA) and not simply as a disbursement.”

In respect of the bill of costs the Court of Appeal felt that there should be a penalty for the mis-certification, but that Master Leonard’s penalty was too severe; they disallowed 50% of Part 1 of the bill of costs. The Court did emphasise that the Claimant’s conduct in attempting to claim hourly rates which exceeded those in the retainer was not, in its judgment, dishonest. However, it found that on the best interpretation the Claimant had believed that as she was essentially acting for herself (albeit under the umbrella of Falcon Legal) and was entitled to modify the retainer “at will”, that this was fundamentally wrong, and that such conduct was “unreasonable or improper” to a level that could justify a sanction.

This is a very important decision for Solicitors who instruct costs lawyers and other costs professionals. It is fundamentally important that costs budgets, statements of costs and bills of costs are prepared correctly and the hourly rates claimed do not breach the indemnity principle – the Solicitor has the overall responsibility to make sure the costs document is correct as they certify it. It is also important to make sure that information in Points of Dispute and Replies to Points of Dispute is accurate. Failure to do so can result in costs penalties, but more importantly, allegations of misconduct and associated legal reporting which would be damaging for any law firms’ or legal costs firms’ reputation.

This blog was prepared by Andrew McAulay, who is a Partner and the Head of the Costs & Litigation Funding team at Clarion. Andrew can be contacted on 0113 336 3334 or at andrew.McAulay@clarionsolicitors.com.

 

INDEMNITY COSTS FOLLOWING DISCONTINUANCE OF PROCEEDINGS

Andrew McAulayLeave a comment

CPR 38.3 provides that a Claimant may discontinue a claim by filing and serving a Notice of Discontinuance on the other parties. Under CPR 38.6(1) it states the following:

“Unless the court orders otherwise, a Claimant who discontinues is liable for the costs which a Defendant against whom the Claimant discontinues incurred on or before the date on which the Notice of Discontinuance was served…”.

Under CPR 44.9(1), such an order is a deemed order for costs and the basis of assessment is the standard basis.

The case of Two Right Feet Limited (in liquidation) -v- National Westminster Bank PLC and others is a case where the Claimant discontinued proceedings against the Defendants and the Defendants made an application for costs to be awarded on the indemnity basis due to the following issues:

  1. failure to engage pre-action;
  2. improper and unjustified allegations;
  3. an exaggerated claim;
  4. a case which was speculative (both in facts and law);
  5. a claim which was brought without proper investigation;
  6. concerns as to the approach to disclosure; and
  7. delayed discontinuance, other delays and more minor points.

Background

On 3 March 2015, the Claimant commenced proceedings against the Defendants.  In the claim form, the Claimant alleged that the Defendants were liable for deceit and conspiracy.  The claim was first notified to the First and Second Defendants on 9 June 2015 and the claim form was served on 3 July 2015. The amounts claimed amounted to £20 million. The claims were strenuously denied by the Defendants.  On 7 October 2016 there was a case management conference where directions were set and the case was transferred into the Mercantile Court.  Disclosure followed in January 2017, but on 22 February 2017 the Claimant discontinued its claim. 

Indemnity Basis Costs Order

The Judgment provides very useful information for any party considering an application for an indemnity basis costs order as it cites the leading authorities (paragraph 36 is very useful to read in this regard).

The Judge concluded that an order for indemnity costs was appropriate and determined that the way in which the case had been advanced by the Claimant (and conducted) carried the case out of the norm, which is of course an important consideration for any court when deciding whether to award indemnity costs.

The case also highlights the importance of the receiving party (Defendants in this case) making an application. Notice of Discontinuance creates a deemed order for costs on the standard basis. Should a receiving party feel that they are entitled to indemnity basis costs then they should seek agreement with the paying party (Claimant in this case) or make an application to Court. A receiving party should not leave the matter for detailed assessment – the detailed assessment hearing is a forum to determine the quantum of costs, not to determine the basis of assessment.

This blog was prepared by Andrew McAulay who is a Partner at Clarion and the Head of the Costs and Litigation Funding team.  He can be contacted on 0113 336 3334 or at andrew.mcaulay@clarionsolicitors.com

 

The format of the precedent H budget and precedent R are working well, claims Mr Justice Birss

Joanne ChaseLeave a comment

At February’s Civil Procedure Rules Committee meeting Mr Justice Birss reported that “work was ongoing to make certain that the new bill costs, Precedent H and Precedent H Guidance are consistent and accurate and that N260 the summary costs statement follows the same format. The content of Precedent H itself would not be changing. The Chair added that in his experience having settled down, Precedent H and R are working very well“. Therefore no changes are expected to the precedent H budget or the precedent R budget discussion report, the remaining changes relate to the bill of costs and statements of costs.

The wholesale changes to costs that we have encountered over the last 5 years were made as a result of Sir Rupert Jackson’s report whereby he likened the current bill of costs to a “Victorian style account book” making it “relatively easy for a receiving party to disguise or even hide what has gone on”. His purpose was to create transparency and unison with time recording systems and costs related documents, hence the need for the new electronic bill of costs, which is the final piece of Jackson’s jigsaw.

If the legal profession were to embrace time recording as Jackson intended, i.e. recording time in phase, task and activity, then astonishingly some 5 years after the publication of his legendary reforms, Sir Rupert Jackson may achieve his aim. However, Sir Rupert narrowly missed having his vision fully formalised and embedded into the rules during his working lifetime, his retirement has pipped him to the post.  He can now sit back and watch from afar, how his intended co-ordinated approach to costs will work in reality!

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

Sharp v Blank and Ors – What development in litigation is deemed significant enough to warrant a revision to the precedent H costs budget?

Joanne ChaseLeave a comment

The case of Sharp v Blank and Ors addresses the difficult question – what development in litigation is deemed significant enough to warrant a revision to the precedent H costs budget?

The key points of the claim relate to the approach to be taken when applying to revise a budget and are as follows:

  • Future costs – The court found that the language used in paragraph 7.6 is of critical importance and that it is explicit – the revision is in respect of future costs.
  • Range of reasonable and proportionate costs – The court is only required to set figures that are within a range of reasonable and proportionate costs. A range suggests that the process is designed to produce figures for each budget phase in a way that is not a slave to arithmetical calculation. The court is approving, or the parties are agreeing, figures that are not ‘right’ as such, but rather figures that are within a range of acceptability.
  • Interim applications – The costs of interim applications may fall outside the budget, however the incidental costs are a significant development and a revision to the budget is required for those costs. However, interim applications may also be significant developments in addition to the consequences that flow from an interim application.
  •  Modest increases – A significant development must be understood in light of the claim – its size, complexity and the manner in which the litigation has unfolded – and also from the likely additional costs that have been, or are expected to be, incurred. The amount of the additional expense is not determinative, but it is difficult to conceive that a development leading to modest additional legal expenditure, that is modest in proportion to the amount in the relevant budget phase or phases, is likely to be significant development.
  • A development in litigation may not be immediately obvious – In some cases it may not be immediately obvious that a development in the litigation is significant development; a development which appeared at first sight not to be significant may change character.
  • Mistakes in the preparation of the budget – A mistake in the preparation of a budget, or a failure to appreciate what the litigation actually entailed, will not usually permit a party to claim later there has been a significant development because the word “development” connotes a change to the status quo that has happened since the budget was prepared. If the mistake could have been avoided, or the proper nature of the claim understood at the time the budget was prepared, there has been no change or development in the litigation. By contrast, if the claim develops into more complex and costly litigation than could reasonably have been envisaged, that may well be the result of one or more significant developments.
  • Retrospectivity – Some degree of retrospectivity is inevitable if the costs management regime is to be made to work – parties cannot be expected to down tools until a decision is made regarding the revision, however any request for a revision should be made asap.
  • Claiming additional costs at detailed assessment – If there have been significant developments, the budgets must be revised. A claim for additional costs should not be left until a detailed assessment because the parties need to know what is their exposure to costs and the costs of detailed assessment should be minimised.

Following application of the above the court found as follows:

Extension to the trial timetable – yes, it was found that the court had to ask itself at a relatively high level the essential question, namely is this a significant development. Costs management has to be, at least in part, an impressionistic exercise. It seems to me that is the right approach when considering whether there have been significant developments.

Change in number of documents for disclosure – yes under the circumstances of this case.

Application for permission to rely on additional expert and the incidental costs – yes.

Cs 3rd party disclosure application – no – The application was part of the claimants’ task in preparing the case of a trial and it did not lead to work that can properly be characterised as giving the court jurisdiction to revise the defendants’ budget

Questions to three of the Defendants’ experts – Allowance has to be made for future events and, as they unfold, there will be pluses and minuses; some items are more expensive and some lead to savings. It is not appropriate only to take work which has cost more than was originally anticipated and to say that there has been a significant development. There must be something more than merely a modest increase in the anticipated cost of the work to amount to a significant development.

Response to Mr Ellerton – Mr Ellerton sought to include additional evidence, consequently the Defendant had to produce additional witness evidence and supplemental notes form 2 experts. The court found that this was a development, but that in the context of the claim and the modest additional sums claimed that this was not a significant development.

A significant development will depend on the impact that change has on that case and will be case specific.

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