A Complete Chronological guide to budgeting case law

August 30, 2019June 28, 2019 annaramli1 Comment

There are many case authorities in relation to budgeting since the process was implemented, it is hard to keep track of them all. Here is a complete list of cases.

2014

Appeals

Havenga -v- Gateshead NHS Foundation Trust [2014] EWHC B25(QB)

General guidance

A & B (Court of Protection: Delay & Costs) [2014] EWCOP 8)

Hegglin -v- Persons Unknown & Google Inc [2014] EWHC 3793 (QB)

Thomas Pink Ltd -v-Victoria’s Secret UK Limited [2014]

Yeo-v-Times Newspapers Ltd [2014] EWHC 2853 (QB)

2015

General guidance

BP -v- Cardiff & Vale University Local Health Board [2015] EWHC B13 (Costs)

(GSK Project Management Ltd -v- QPR Holdings Ltd [2015] EWHC 2274 (TCC)

Stocker -v- Stocker [2015] EWHC 1634 (QB))

Tim Yeo MP -v- Times Newspapers Limited [2015] EWHC 209 (QB))

Various Claimants -v- Sir Robert McAlpine & others [2015] EWHC 3543 (QB)

Judicial guidance cases

GSK Project Management Ltd -v- QPR Holdings Ltd [2015] EWHC 2274 (TCC)

Tim Yeo MP -v- Times Newspapers Limited [2015] EWHC 209 (QB)

Late filing of a budget

Simpson -v- MGN Limited [2015] EWHC 126 (QB)

Overspending on the budget

CIP Properties (AIPT) Limited -v- Galliford Try Infrastructure Ltd [2015] EWHC 481 (TCC)

Excelerate Technology Ltd -v- Cumberbatch [2015] EWHC B1 Mercantile)

Parish -v- The Danwood Group Ltd [2015] EWHC 940(QB)

Simpson -v- MGN Limited [2015] EWHC 126 (QB)

Proportionality in budgeting

(BP -v- Cardiff & Vale University Local Health Board [2015] EWHC B13 (Costs)

Various Claimants -v- Sir Robert McAlpine & others [2015] EWHC 3543 (QB)

2016

General guidance

Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Campbell -v- Campbell [2016] EWHC 2237 (Ch)

Group Seven Limited -v- Nasir [2016] EWHC 629 (Ch)

Merrix -v- Heart of England NHS Foundation Trust [2016] EWHC B28 (QB)

Signia Wealth Limited -v- Marlborough Trust Company Limited [2016] EWHC 2141 (Ch) –

Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Late filing of a budget

Jamadar -v- Bradford Teaching Hospitals NHS Trust [2016] EWCA Civ 1001

Murray -v-BAE Systems PLC (Liverpool County Court, 1st April 2016)

Outcome of budgets and costs of assessment

Sony Communications International AB -v- SSH Communications Security Corporation [2016] EWHC 2985 (Pat)

Proportionality in budgeting

(Considers Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Group Seven Limited -v- Nasir [2016] EWHC 629 (Ch)

Revising the budget

Warner -v- The Pennine Acute Hospital NHS Trust (Manchester County Court 23rd September 2016)

The budgeting procedure

Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Merrix -v- Heart of England NHS Foundation Trust [2016] EWHC B28 (QB)

2017

Departing from the budget on detailed assessment

RNB v London Borough of Newham [2017] EWHC B15 (Costs)

General guidance

Harrison -v- University Hospitals Coventry & Warwickshire Hospital NHS Trust [2017] EWCA Civ 792

MacInnes -v- Gross [2017] EWHC 127 (QB)

Napp Pharmaceutical Holdings Ltd v Dr Reddy’s Laboratories (UK) Ltd & Ors [2017] EWHC 1433 (Pat)

Judicial Guidance cases

Findcharm Ltd -v- Churchill Group Ltd [2017] EWHC 1109 (TCC)

Woodburn v Thomas (Costs budgeting) [2017] EWHC B16 (Costs)

Late filing of a budget

Asghar -v- Bhatti [ 2017] EWHC 1702 (QB)

Mott & Anor v Long & Anor [2017] EWHC 2130 (TCC)

Outcome of budgets and costs of assessment

Harrison -v- University Hospitals Coventry & Warwickshire Hospital NHS Trust [2017] EWCA Civ 792)

Merrix -v- Heart of England NHS Foundation Trust [2017] EWHC 346 (QB)

Part 36 in budgeting

Car Giant Limited -v- the Mayor and Burgesses of the London Borough of Hammersmith [2017] EWHC 197 (TCC)

Proportionality in budgeting

Rezek-Clarke -v- Moorfields Eye Hospital NHS Foundation Trust [2017] EWHC B5 (Costs)

Revising the budget

Asghar -v- Bhatti [2017] EWHC 1702 (QB)

Sharp v Blank & Ors [2017] EWHC 3390 (Ch)

Sir Cliff Richard OBE -v- The BBC & Chief Constable of South Yorkshire Police [2017] EWHC 1666

2018

Departing from the budget on detailed assessment

Jallow v Ministry of Defence [2018] EWHC B7 (Costs)

Nash v Ministry of Defence [2018] EWHC B4 (Costs)

General guidance

Yirenki v Ministry of Defence, [2018] 5 Costs LR 1177

MacInnes v Gross – the budget is not a one stop shop

February 28, 2017March 9, 2017 Sue FoxLeave a comment

MacInnes v Gross [January 2017] EWHC 127 (QB) – the court looked at payments on account, indemnity awards, departure from the budget and proportionality!

Indemnity awards

In the case MacInnes v Gross [2017]EWHC 127 (QB), the honourable Mr Justice Coulson refused to award indemnity costs despite the claimant refusing to engage in negotiating a settlement. The judge comment that:

“More importantly, they also have to be considered against the background of the solicitors’ correspondence, which made plain that, on at least two separate occasions, the first defendant, through his solicitors, refused to engage in mediation. Again, that was doubtless because he genuinely believed in the rightness of his defence. But I consider that that failure tempers any criticism that might otherwise be made of the claimant’s rejection of the first defendant’s offers and his failure to make anything like a realistic offer in return”.

The Judge considered the criticism regarding negotiation collectively with the allegations regarding conduct and resolved that conduct had not been an issue. He refused to grant an indemnity award.

Proportionality

The court commented on proportionality, commending the claimant as follows:

“The claimant litigated his claim in a reasonable and proportionate manner. In my view, the fact that the claimant’s approved costs budget was around £234,000, when set against a claim for €13.5 million, demonstrates the proportionate way in which the litigation was conducted”.

Payments on account/departure from the budget

HHJ Coulson stated that “the days of the educated guesswork are now gone”, the court found that the budget can be used to determine the level of the payment on account.

The defendant requested a payment on account, the request was not in dispute, however the level of the payment was. The claimant proposed a payment on account in the sum of £375k, primarily on the basis that the defendant would not necessarily recover the amount of his costs budget at detailed assessment stage. This was the principle that was laid down in the first instance decision in the Merrix case, however the court did not adopt that approach and the court found that:

“The first defendant’s approved costs budget was in the sum of £570,000. He originally sought an interim payment of £605,000, being 95% of the approved costs budget (£540,000) together with an additional £65,000 to reflect the fluctuations in exchange rate and interest. During the oral submissions, the latter figure was reduced to £30,000 to reflect interest only, so that the first defendant asked for the sum of £570,000 as an interim payment on account of costs”

The court referred to the cases of Silvia Henry v News Group Newspapers Ltd and Full Circle Ltd v AMEC Earth & Environmental (UK) Ltd (No 2) and stated:

“CPR 3.18 makes plain that, where there is an approved or agreed costs budget, when costs are assessed on a standard basis at the end of the case, “the court will…not depart from such approved or agreed budget unless satisfied that there is good reason to do so. The significance of this rule cannot be understated. It means that, when costs are assessed, the costs judge will start with the figure in the approved costs budget. If there is no good reason to depart from that figure, he or she is likely to conclude the assessment at the same figure”.

A view that was mirrored in the recent appeal decision in the Merrix case. HHJ Coulson went on to comment:

“One of the main benefits to be gained from the increased work for the parties (and the court) in undertaking the detailed costs management exercise at the outset of the case is the fact that, at its conclusion, there will be a large amount of certainty as to what the likely costs recovery will be. One consequence is that, for the purposes of calculating the interim payment on account of costs, the starting point will almost always be the payee’s approved costs budget”

He concluded that:

“So when making an interim payment on account of costs in a case with an approved costs budget, the days of the educated guesswork identified by Jacob J in Mars UK Limited v Teknowledge Limited [1999] 2 Costs LR 44 are now gone. Instead the court can be confident that there is a figure for costs which, because it has already been approved, is both reasonable and proportionate”.

Accordingly, the court granted an interim payment on account of costs of £528,000.

The budget remains to be the essential tool to be used throughout the litigation and will be used for many purposes in addition to controlling legal spend.

Sue Fox is the Head of Costs Budgeting in the Costs and Litigation Funding department at Clarion Solicitors. You can contact her at sue.fox@clarionsolicitors.com and 0113 336 3389, or the Clarion Costs Team on 0113 246 0622.

Costs Budgeting – claims over £10m

August 22, 2016September 3, 2018 Sue FoxLeave a comment

In Signia Wealth Limited -v- Marlborough Trust Company Limited [2016] EWHC 2141 the court considered whether costs budgeting was appropriate.

Practical points

If there is no value on the claim form, then despite the amount of the claim – costs management applies.
The combined value of the claim for costs was considered when deciding whether the proportionality test was engaged.
Will an inequality of arms be a determining fact when deciding if costs management applies? If making submissions regarding the same, then evidence to support the financial circumstances should be provided.

This was a high value claim and the court was asked to consider whether the claim should be taken out of the costs management regime.

The claimant identified that because neither the claim nor the additional claim had specified a monetary value in excess of the £10m limit, the claim was not automatically taken out of the costs management regime by virtue of CPR 3.12 (1)(b).

Costs budgets were filed and both parties’ claims for costs totalled £4.14m, the value of the claim was in the region of £13m. Consequently, the court found that the proportionality argument was engaged.

The court considered whether CPR 3.15(2) applied -“Where costs budgets have been filed and exchanged the court will make a costs management order unless it is satisfied that the litigation can be conducted justly and at proportionate cost in accordance with the overriding objective without such an order being made.

The court commented:

“13. It is not in doubt now that this claim is within the costs management regime. That is so because neither the claim form nor the additional claim mentioned the value of £13 million, which is said to be the value of the shares which were held by the first defendant. Had the figure been mentioned in the additional claim form, then the costs management regime would not have applied.

14. It seems to me that, given that this claim is within the regime, the proper approach for the court to adopt is to apply the test set out at CPR 3.15(2), namely the court must be satisfied, if this case is to be taken outside the regime, that the claim can be conducted justly and at proportionate cost in accordance with the overriding objective without a costs management order being made. If the court is not so satisfied, then the claim must stay within the costs management regime.”

The court further commented that the incurred costs as against the future costs needed to be considered. “If a point had been reached at which point future costs were to be de minimus, there was little point it requesting parties to undertake the expense of costs management. Although costs management was occurring later than desirable, there were significant future costs to be incurred and therefore this was a case to make observations about costs which have been incurred”..

The defendant argued that there was an inequality of arms, the second defendant was an individual. However, no evidence was provided to support her financial circumstances and therefore the court found that it would not be right to make a decision in relation to the costs management.

The court considered that the claim fell within the costs management regime and therefore the proper approach for the court to adopt was to apply the test set out in CPR3.15(2).

Because there were issues of proportionality which needed to be considered and there were real benefits for the parties if there was a costs management order, the court ordered that there be a costs management hearing.

The good, the bad and the awkward

January 4, 2016September 3, 2018 Sue FoxLeave a comment

Please find attached my most recent article which has been published in the Litigation Funding magazine december-litigation-funding

If you have any questions or queries in relation this blog please contact Sue Fox (sue.fox@clarionsolicitors.com and 0113 3363389) or the Clarion Costs Team on 0113 2460622.

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

December 8, 2015September 3, 2018 Sue Fox1 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.

If you have any questions or queries in relation this blog please contact Sue Fox (sue.fox@clarionsolicitors.com and 0113 3363389) or the Clarion Costs Team on 0113 2460622.