Page 22 - PIC Magazine Spring Issue 15
P. 22

   ARTICLE
Budget
Variation
CIVIL COSTS
 Dominic Woodhouse, Advocate and National Training Manager at PIC, reports.
   22
     n the words of the great Sam Cooke, ‘A change is gonna come’, and no doubt it augurs well that the Civil Procedure Rules Committee (“CPRC”) is taking its time over the
further refinement of the costs management process in relation to variation of a costs management order.
Variation of a budget is an issue that has given rise to no little difficulty for practitioners; the perilous path to the first CCMC was trodden, resulting in a budget you grudgingly accepted was possibly almost adequate, but some event having taken the matter (at least in your view) off course, you have the dual quandary of whether the Court will agree that it amounts to a significant development, and (assuming you’re willing to run the judicial gauntlet on the point) how exactly to go about engaging other parties and the court on the issue and the procedural byways to be navigated.
There is a limited amount of caselaw dealing with what amounts to a significant development, and to compound the difficulty of the situation for those that
find themselves in it, each tends to studiously avoid giving any form of general guidance as to what might constitute a significant development. This is quite possibly the only way it can be; similarly to Master Gordon-Saker’s reservations as to the expansion of what may be meant within the rules by ‘good reason’ to depart from a budget (as per the minutes of the December 2019 CPRC meeting), what amounts to a ‘significant development’ will vary from case to case, and what is significant in one may not be in another. The most useful for practical guidance is likely Ohoud al-Najar & Ors – v – The Cumberland Hotel (London) Ltd [2018] EWHC 3532, which derives broad principles from PD 3E and the earlier case of Sharp & Ors – v – Blank & Ors [2017] EWHC 3390 (Ch).
In keeping with those principles is the note offered in the White Book (at paragraph 3.15.4) that while the term ‘significant development’ is not defined, it appears to include ‘any event, circumstances or step which is of such a size and nature as to
go beyond the events, circumstances and steps which were taken into account, expressly or impliedly, in the budget previously approved or agreed.’ There is a stark warning therein by the suggestion that a ‘development is taken into account impliedly if it is something that was, or should reasonably have been, anticipated by the applicant for revision with regard to the previously approved or agreed budget’.
When ‘should’ something have been reasonably anticipated? Per, Master Davison’s comments in Al-Najar, the bar for significant development should not be set too high because, ‘otherwise, parties preparing a budget would always err on the side of caution by making over-generous assessments of what was to be anticipated.’ In relation to contingencies, Mr Justice Warby in Yeo – v – Times Newspapers
Ltd [2015] EWHC 209 (QB) considered that they should only be provided for if the relevant matters are ‘foreseen as more likely than not to be required’. On the face of it, this offers some comfort for work previously contemplated as possible but unlikely and excluded from the budget on that basis, such as to support later revision if such matters in the event transpired.
   The proposed Budget Variation Notice
is parked for the time being, in order to allow proposed changes to the budgeting rules
(which we await with bated breath until the minutes
of the February 2020 meeting are published) to bed-in.
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