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summary assessments on costs budgets

6 September 2013

One of the criticisms of the new rules on costs budgeting has been the additional time spent at the commencement of a case in fixing the budget. It was also ways argued that this time should be repaid at conclusion of a case, when costs came to be settled or assessed. That should certainly be the case if judges are willing to summarily assess costs at trial, where a case has been costs-managed. In two cases under the TCC costs budgeting pilot, HHJ Simon Browne QC has pioneered this approach.

The Cases

In 2012, His Honour Judge Simon Brown QC (a proponent and keen advocate of costs budgeting) presided over the case of Safetynet Security LTD v Coppage ((2012) EWHC B11). Having given judgment for the Claimant, he stated that since their costs were within the budget approved by the court, a detailed assessment would be an unnecessary and expensive course of action to take. Costs were awarded in the Claimant’s favour for the amount of the budget.

Fast forward to Monday 13 May 2013 and the case of Slick Seating systems (1) GL Events SA (2) v Adams (1) Leamark Ltd (2) LA Structures (3) Jones (4) -another matter which made it to Trial before HHJ Brown QC and in which the same approach was adopted.

Costs were again ordered as per the budget without further argument, either in front of the Judge or at a future detailed assessment hearing.

In making his decision the Judge relied on 5 key points:

  1. He had already approved the budget of £359,710.35 for the case through to trial;
  2. The budget was proportionate to what was at stake (that being the £4.4m awarded);
  3. The Claimants had kept within that budget and exercised due control over their activities and expenditure in an “exemplary fashion”;
  4. The statement of costs presented to him at Trial compared favourably with the costs estimate of 22 May 2012; and
  5. The form was signed by the partner of the solicitors and a member of the client company.

All of the above is in addition to the fact that HHJ Brown QC had managed the case throughout and thus considered himself to be in a better position than any other judge, whether on detailed assessment or otherwise, to determine the ‘right’ amount of costs to be awarded.

Interestingly, notwithstanding the budget, the costs were awarded on the indemnity basis – and the judge had the following to say on the point:

the costs budgeting, even if the claimants had exceeded their budget, would not have come into play as far as this is concerned because it would be upon the defendant to show that the costs they had incurred, whether within or above the budget, were unreasonable”.

A rather surprising comment from a judge it has to be said – and one which we can only hope was as a result of his disdain for the way the Defendants had acted in this particular case and not to set a precedent for frivolous conduct arguments in future cases where a budget has been exceeded.

A note from our Costs Manager:

The approval of the budget by the trial judge is not wholly surprising, even if the judge’s comments on exceeding the budget are.

However, despite opening the ‘conduct’ door, there are a number of strategic considerations practioners should be starting to take into account:

  1. Budgets need to be challenged early – and certainly before the parties find themselves at Trial.
  2. Where a budget has previously been approved but where a party wishes to have a detailed assessment of the costs, a decision may have to be made as to whether or not the Trial is to be avoided to retain such a right.
  3. Never agree to pay costs on the indemnity basis where this can otherwise be avoided. One could find oneself landed with a bill of costs in excess of the budget in the event that you do!
  4. As a matter of good practice, notwithstanding the judge’s comments on indemnity costs, we cannot rely on this being granted at the end of the case. Always return to Court to get budget approval (where possible) before the additional costs are incurred.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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