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.
HHJ Dight finds on appeal that the fact that the sum claimed on assessment in any given phase of a bill is lower than the budgeted figure for that phase, because the anticipated work had not been completed and/or by virtue of the indemnity principle, is itself capable of being a ‘good reason to depart’ under CPR 3.18(b). Once CPR 3.18(b) had been invoked it was then open to the paying party to challenge the figure which was then being claimed by the receiving party, and they did not have to assert a further good reason to enable the court to do so.
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]”
Extract from the SCCO Guide