Articles
SIGNIFICANT DEVELOPMENTS IN A CASE AND A REMINDER CONCERNING THE IMPORTANCE OF COSTS BUDGET REVISION
Friday 20th May 2022
Daniel Jones
Costs Budgeting is now a familiar part of the legal landscape. Having taken a prominent role in Multi-Track Litigation since April 2013, however, an important aspect of the process is still frequently overlooked by many practitioners - jeopardising costs and their recovery.
Variations to approved Costs Budgets have been an ever-evolving aspect of the Costs Management process since its inception, however it remains surprising how infrequently practitioners seek to revise a Costs Budget once the initial costs Case Management Conference has taken place.
CPR 3.15A tells us that: -
"(1) A party ("the revising party") must revise its budgeted costs upwards or downwards if significant developments in the litigation warrant such revisions.
(2) Any budgets revised in accordance with paragraph (1) must be submitted promptly by the revising party to the other parties for agreement, and subsequently to the court.........."
Taking into account the specific use of mandatory language "must"; it should remain of paramount importance to ensure that Costs Budgets are frequently monitored, and variations are sought in a prompt manner. Any failure to seek permission to vary Costs Budget promptly, following a significant development in the Litigation being identified, is likely to result in Budget overspend and complications recovering any additional costs incurred at Detailed Assessment.
There remains ample of scope for argument as to what constitutes a significant development, however, in the writer's opinion, the case of Al-Najar v The Cumberland Hotel [2018] EWHC 3532 (QB) remains good law.
Recent success has been achieved concerning the significant development test by virtue of relatively common developments in the Litigation, such as:
• a deterioration in a Claimant's condition resulting in the need for additional expert evidence,
• the disclosure of covert surveillance evidence,
• additional witnesses being identified and
• the length of trial being increased.
Once a significant development has been recognised, the issue of promptness should take precedence - with steps being taken to complete, or instruct costs professionals to prepare, the requisite Precedent T.
All may not be lost, however, should you fail to seek variation of the Costs Budget during the Litigation. The door has been left slightly ajar via means of CPR 3.18(b): -
"3.18 In any case where a costs management order has been made, when assessing costs on the standard basis, the court will -
(b) not depart from such approved or agreed budgeted costs unless satisfied that there is good reason to do so; and"
However, the utilisation and application of CPR 3.18, at Detailed Assessment, is an uncertain endeavor, when mandatory provisions have already been made within the rules for Budget variations.
An astute Litigator should closely monitor developments taking place within the Litigation in conjunction with the court's Costs Management Orders, and seek a prompt variation to their Precedent H as soon as issues are identified to ensure maximum recovery of Profit Costs.
Smart Legal Costs are extremely experienced in dealing with all types of costs issues. For more information on how we can help, please find out more please feel free to contact me or use the chat box. We have a range of service, such as preparing Bills of Costs and Costs Budgets .