Tag: head of costs budgeting

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

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

Failure to update the Budget and failure to serve the Statement of Costs – Simpson v MGN Limited & Anor [2015] EWHC 126 (QB)

Joanne Chase1 Comment

In Simpson v MGN Limited & Anor [2015] EWHC 126 (QB), the Claimant failed to submit a revised costs budget to include the costs of a preliminary issue trial and failed to serve a costs statement on the Defendant.

The budget, which the Claimant had filed at the first cmc, included a contingency for a preliminary issue trial. This was not agreed between the parties and the Judge neither agreed nor approved this, simply marking the phase with N/A. The Defendant had also included a contingent phase for the preliminary issue, however the parties had managed to agree the amount, which the court recorded.

The Defendant argued that the costs relating to the preliminary issue trial should not be allowed on the basis that the Claimant had failed to seek a revision. The Judge considered the sequence of events, which included the Claimant providing the Defendant with an updated budget to include the preliminary issue phase. Despite the Claimant failing to request a revision from the court, the Judge found that disallowing the costs would be an unjustly disproportionate sanction, not sufficiently justified by the overriding objective.

The Judge commented as follows:

“The application of the wording of CPR 3.18(b) is not so straightforward in the circumstances of this case, where (a) the receiving party has put forward a budget for this phase of the litigation but one that is not agreed or approved, or disapproved but considered inapplicable; and (b) the paying party has prepared a budget for this phase which has been agreed. I am inclined to think that the wording of CPR 3.18 was not aimed at such a situation, but rather at ensuring that once the court has reached a decision on what it is reasonable for a party to spend on a given phase that conclusion should be final in the absence of some good reason. However, that was not a point addressed in argument and I reach no conclusion on it. Assuming that I am wrong in this it seems to me that on the facts of this case there is good reason to depart from the budget approved by Master Yoxall for this phase of the litigation, by allowing recovery of some costs by the Claimant”.

The Judge also applied the principles in the CPR regarding failure to serve a statement of costs and used his discretion to reduce the statement of costs by 10%.

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