Page 12 - PIC-Magazine-Issue23-Autumn-Winter-24

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CIVIL COSTS ARTICLE
Budget Guidance
A View From The KBD
hen costs budgeting was introduced for most multi-track claims in April 2013, a large part
of the profession could have been forgiven for taking an ‘everything
but the kitchen sink’ approach to budgeting; we’d just been told that
the Courts would be setting a budget soon after issue of proceedings, at a point in time when the future conduct of the litigation was uncertain, the budget would almost invariably limit what could be recovered inter partes, and if something was missed from it, then tough luck, we had our chance. There was some vague idea that the parties might later be able to ask the Court to look at the budget again,
and the suggestion of a further test that might permit departure from the budget come detailed assessment, but which was pitched against one of the key underlying principles of budgeting; parties should know in advance what they were in for if they lost the case, and to too readily permit parties to change or escape the budget would be corrosive of that fundamental aim.
Times have moved on to some extent. October 2020 saw various changes to costs management under section II of
CPR 3 and substantial revision of PD 3E (as
then was, now PD 3D), one point being to take the existing provisions
requiring that
the parties ‘shall’ seek to revise budgets where significant developments in
the litigation warranted it, and make explicit that parties ‘must’ take such steps. Judges at conferences around the country indicated a view that the Courts were expecting to deal with, and positively invited, such applications, seeing them as key to a workable costs management process, not cast in
stone but fluid as the needs of a case dictated. Yes, even pre-October 2020, per Al-Najar and Ors v The Cumberland Hotel (London) Ltd [2018] EWHC 3532 (QB), the bar for what constituted
a significant development was not supposed to be too high as otherwise parties might be overly pessimistic about how efficiently and cost- effectively claims could be pursued, but anecdotally, we hear that in the event Courts have not been inundated with such applications.
Last year, in Reid v Wye Valley NHS Trust & Anor [2023] EWHC 2843 (KB), Master Brown, dealing with costs management at a separate hearing after the Court had already set directions at a previous CMC, found elements of the Claimant’s budget to be unrealistically high and outside the bracket of realistic contention, and in so doing decided it was appropriate to modify what was taken to be the usual order of costs in the case, instead ordering that in the event the Claimant recovered costs at the end of the case, there would be a reduction of 25% to the costs of the budgeting hearing.
The Claimant must have taken a ‘kitchen-sink’ approach then? That is not clear from the judgment, nor is exactly what allowances and reductions were made, save to say that the budget, in a case accepted to be reasonably and realistically valued in excess of £1 million, was reduced ‘substantially’.
We can however glean various points Master Brown was unhappy with and which presumably prompted that reduction. A Manchester firm claiming £425 per hour for a grade A fee earner was worthy of comment, but most particularly in the context of very limited delegation of work to more junior fee earners, where a fee earner charging
at such a rate might be expected to
take a back seat for much of the more mechanical aspects of the claim, instead providing a guiding mind behind the litigation and in overall direction of junior fee earners undertaking the bulk of work. That was not the case however, with the budget demonstrating almost all work being done at a grade A level (for instance in expert reports the grade A fee earner anticipated spending 226 hours versus 2 hours by grade Ds), with the grade A attending the entirety of trial with counsel, on the assumption
of an average of 12 hours per day. Beyond some more limited concern
as to aspects of counsel’s fees and
the experts’ fees for trial, the essence
of the Court’s concerns then appear
to stem from a failure to provide for downward delegation of work and an overgenerous or pessimistic (depending on how we look at it) approach to the amount of future time required.
A note published recently by Master Brown highlights the Court’s discretion as to costs, in order to assist parties in advance of cost management hearings in the King’s Bench Division involving high value personal injury claims.
Dominic Woodhouse is the National Training Manager – Advocate at PIC.
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