B e f o r e :
sitting as a DEPUTY COSTS JUDGE
|Miss Sarah Woodburn||Claimant/Receiving Party|
|Mr Desmond Thomas||Defendant/Paying Party|
Ms Andrea Barnes, Counsel instructed by Ellisons solicitors on behalf of the Defendant/Paying Party
Crown Copyright ©
Costs budgeting – detailed assessment – costs guidance – Practice Direction 3E – practice and procedure – drafting of bills – Precedent H Guidance Note – costs lawyers
Practice Direction 3E B(6)(b)
The Precedent H Guidance Note
The Table annexed to the Precedent H Guidance Note (2017 White Book)
a. In the row of guidance relating to the CMC phase it is stated that (among other matters) the following must be included within the costs budget for the CMC phase:
- Reviewing opponent's budget
- Correspondence with opponent to agree … budgets, where possible
Specifically the following must (among other matters) be excluded from the CMC phase:
- Preparation of costs budget for first CMC (this will be inserted in the approved budget)
b. In the row of guidance relating to the PTR phase it is stated that (among other matters) the following must be included within the costs budget for the PTR phase:
- Preparation of updated costs budgets and reviewing opponent's budget
- Correspondence with opponent to agree … costs budgets, if possible
(there are no relevant exclusions from the budget for the purposes of this judgment).
Practice Direction 3E 7.2 and 7.3
(a) The recoverable costs of initially completing Precedent H shall not exceed the higher of £1000 or 1% of the approved or agreed budget; and
(b) All other recoverable costs of the budgeting and costs management process shall not exceed 2% of the approved or agreed budget."
Steps in this case
a. Costs were budgeted by DJ Avent by an order dated 18 May 2016 at Central London County Court.
b. 'Assumptions' in the budget for the CMC phase were set out as follows insofar as relevant in a table attached to the Claimant's budget as approved:
- Work to date: Instructing Costs Draftsmen to prepare Costs Budget.
- Assumptions (sic):
- Reviewing Budget and liaising with Costs Draftsmen
- Attempting to agree budget
- Reviewing Defendant's Budget […]
- Preparing for further CMC … and updating and revising Costs Budget.
c. 'Assumptions' for the PTR phase (no work was done on this phase but I include for illustration):
- Liaising with Costs Draftsmen in order to update Budget
- Reviewing opponents Budget and correspondence with opponents to agree … Budgets.
d. I need not go into detail, but a further CMC was listed on 6 December 2016 before DJ Avent (there was an issue between the parties as to whether this was a CMC or, properly, a CCMC) but Central London County Court lost (or did not provide the judge with) the file and the hearing was aborted on the day with no substantive progress or revised or agreed budget.
e. In the period between the budget of May 2016 and the abortive hearing of December 2016 some costs (principally of an expert) were incurred by the Claimant which exceeded the budget. (I declined to find that there was a good reason for allowing them outwith the budget on detailed assessment).
f. The matter settled soon after the abortive hearing before DJ Avent.
g. The case went to detailed assessment before me.
The Bill of Costs in this case
The costs lawyer set out in the CMC Phase of the Bill all the CMC costs which did not relate to costs budgeting.
The costs lawyer provided a separate 'non phase' part of the Bill in which all the costs relating to costs budgeting and costs management were set out. This comprised:
(i) Costs under PD 3E 7.2(a), ie the costs for drafting the first Precedent H (ie those capped at the higher of £1000 or 1% of the approved or agreed budget).
(ii) Costs of budgeting which did not fall within the scope of (i), and therefore arguably fell within the 2% cap in PD 3E 7.2(b).
The objection on detailed assessment, and my decision.
- The Assumptions in the Precedent H are the starting point. Those evidence the basis on which the judge has made his or her budgeting decision or on which the parties agreed the budget. Here the Assumptions included in the CMC phase (and PTR phase) included some costs referable to budgeting and costs management, which is as the Guidance requires.
- The costs lawyer drafting the Precedent H must, unless the Guidance changes, follow the Guidance as to which costs of costs budgeting he or she includes in the CMC (and PTR) phases and which he or she includes in the non-phase elements as being the 'other' costs of costs budgeting.
- In my judgment (whether or not the Guidance has been followed, albeit it was in this case), where a budget is approved or agreed then the assumptions on which it was approved or agreed are the best guide as to how the relevant budgeting costs should be treated in the Bill, so as to avoid the difficulty of argument over the extent to which those budgeting costs may be subject to the CMC phase's budget limit (thereby requiring 'good reason' if in excess of budget) as opposed to or as well as the "2%" cap imposed by PD 3E 7.2(b).
- Ensuring that the Bill phases include (wholly and exclusively) the costs which were budgeted in the corresponding identical Precedent H phases could avoid the confusion as to 'what goes where and how to treat it' which was encountered here and took some time in court to resolve item by item in the 'non phase' part of the Bill.
- I therefore directed that the items in the 'non phase' part of the Bill which fell within the CMC phase assumptions of the approved Precedent H (and Guidance) should be treated as if they had been pleaded in the CMC phase of the Bill, and that all other costs of costs budgeting and costs management should remain in the non-phase part of the Bill and be subject to the 2% (and 1%, as appropriate) caps.
- In the result, the costs claimed in the CMC phase exceeded the budget for that phase by a somewhat greater amount than they already did in any event.
MASTER VICTORIA MCCLOUD sitting as a Deputy Costs Judge.
11 August 2017.