And Incurred Costs | To Comment Or Not To Comment

Kings Security Systems Ltd v King & Anor

In Richard v The British Broadcasting Corporation (BBC) & Anor [2017] EWHC 1666 Chief Master Marsh urged a “degree of caution” when considering whether to make a comment about incurred costs at a costs management hearing, saying:

“To my mind there is little or no value in the court recording a general comment about incurred costs along the lines that the incurred costs are “substantial” or they are “too high”. If the court wishes to record a comment that the incurred costs are “excessive” or they are “unreasonable and disproportionate” it will wish to be sure that the comment is made on a sound footing, rather than impression, because commenting is quite unlike the exercise of approving a figure per phase for future costs. The court will also wish to consider the utility of making a comment unless it is specific and well-founded.”

These sentiments have been echoed by Master Kaye in a decision handed down last November, but only recently published.

Whilst raising clear concerns about the proportionality of both parties’ costs, incurred and budgeted, the Master declined to accept the defendant’s invitation to record a comment on the claimant’s budget under PD3E para 7.4.

“I cannot see any value in a comment that simply repeats for the costs judge a general view that costs incurred to date are excessive or disproportionate but without being able to provide some express guidance as to what it is about the costs that is considered to be disproportionate or excessive. There is little or no value in the court recording a general comment about incurred costs when the court is not in a position to make a specific and well founded comment about any specific element of the costs which might be of assistance to the costs judge.”

“A costs judge on will have a detailed bill of costs and far more information about how the costs were incurred and why they were incurred and will have the opportunity to look at the costs at a granular level, should that be necessary. There is no value in a comment at this stage which might be seen as a fetter on the discretion on the costs judge. So whilst on the basis of the figures I have seen it appears to me that the costs to date for both parties are wholly disproportionate, I will leave it to the costs judge to form his own view in due course in relation to incurred costs.”

The Master also made some observations on the value of comparing parties’ respective budgets.

“What is reasonable and proportionate is an objective exercise based on the court’s perception of the factors such as complexity and value, not the parties’ perceptions. Simply comparing one budget to another is not the correct approach. Just because the claimant’s proposed costs are higher than the defendant’s proposed costs does not automatically make them either unreasonable or disproportionate. The court has to take into account that there are many reasons why figures will be different. The parties are likely in most cases to have a different view on the approach to the evidence on the legal issues and the significance of certain aspects of the case. That is why there is a range of what is reasonable and proportionate.”

KINGS SECURITY SYSTEMS LTD V KING & ANOR [2019] EWHC 3620 (CH)