This was a decision regarding alleged mis-certification of a costs budget. The case bore similarities to the facts in Tucker v Griffiths and Hampshire University Hospitals NHS Trust, another decision of Master Rowley. Both parties were critical of Master Rowley’s decision in Tucker, the defendant complaining that it was too lenient and the claimant contending that it had been too harsh as a finding of misconduct under CPR 44.11 had not been warranted on the facts.
The was an application by the defendant in a business dispute to upwardly revise his costs budget under PD3E s7.6 by reason of various ‘significant developments’ in the litigation including additional costs involved in answering a request for further information and an increase in the number of documents that had been required to review. The application was unsuccessful primarily due to the fact that the increased costs had, it was held, arisen due to the defendant’s own actions in failing to properly clarify his case, despite two court orders to do so. Furthermore, the extent to which his legal team were required to review disclosure documentation was something which should reasonably have been anticipated.
Mr Justice Warby comments on hourly rates and the appropriate use of partner time in the course of setting costs budgets
Master Davison approves the majority of a 78% increase in the disclosure phase of the claimant’s costs budget following disclosure “of a scale and complexity that [was] much larger than was actually budgeted for” commenting that “the bar for what constitutes a significant development should not be set too high”
In another case involving the late filing of a costs budget the High Court refused the defendant relief from the sanction of CPR 3.14, thus deeming them to have filed a budget comprising applicable court fees only. The defendant had filed their budget two weeks after the deadline and did not apply for relief from sanctions until the morning of the costs and case management conference. The Hon. Mr Justice Bryan found that the breach was both serious and significant, there was no good reason for it and the application for relief had not been made promptly.
Master Nagalingam directs a claimant to redraw his bill of costs of almost £1m in phases to comply with the requirements of CPR 47 PD 5.8(8). The claimant had argued that due to considerable developments in the case, the case managing court had accepted that updated costs budgets were necessary and these had duly been prepared and served. However, the revised budgets did not reach the stage of a costs management hearing and were never approved. Notwithstanding, the claimant argued, as the revised budgets were ordered by the Court the initial approved budget was deemed to be superseded, there was therefore no approved budget in place and CPR 47 PD 5.8(8) did not apply. Thus a phased bill of costs was not required. The Master disagreed.
Mr Justice Jacobs held that a Master was wrong to approve specific hours in a costs budget, subject to later argument on hourly rates, rather than overall figures for each phase, finding that “[this had] the effect of removing the flexibility of the party in deciding how to spend the budget in the light of the way the case develop[ed]”
Mr Justice Walker allowed an appeal in part against the imposition of a sanction under CPR 3.14 which limited the claimant’s costs budget to applicable court fees only following the filing of a costs budget which failed to deal with the trial and trial preparation phases. The parties had agreed all other phases up to and including a proposed second CMC or PTR and it was proposed that subsequent directions and costs budget figures be left over to be dealt with at that point. Master Thornett did not accept the parties’ proposed course and determined that in failing to file a complete budget the claimant had failed to comply with CPR 3.13, thus invoking CPR 3.14. The consequence of Walker J’s decision on appeal was to disapply the sanction in respect of those parts of the budget which had been completed and agreed but to leave in place the CPR 3.14 sanction in respect of both the trial and trial preparation phases, thus depriving the claimant of the ability to recover any costs in relation to those phases.
Picken J refuses permission to appeal an order rejecting an application to revise a costs budget under s7.6 PD3E, finding that a doubling in value of the claim did not amount to a significant development
Chief Master Marsh considers an application to revise a defendants’ costs budget under Para 7.6 of Practice Direction 3E (PD3E) in light of seven “significant developments” and examines the practicalities of such an application, in particular the treatment of costs already incurred since the original budget, as well as applications made under Para 7.9 PD3E