SENIOR COURTS COSTS OFFICE
Royal Courts of Justice
London, WC2A 2LL
B e f o r e :
| Abdoulie Jallow
|- and -
|Ministry of Defence
Michelle Walton (instructed by Jessica Wilson, Costs Lawyer) for the Defendant
Hearing date: 12 April 2018
Crown Copyright ©
The valuation issue
"5. The Claimant's Budget was approved based on a valuation of £300,000:
i. The figures as approved were only approved as they were deemed proportionate to the value given by the Claimant of £300,000;
ii. The Defendant did not accept this valuation at the time, and as the claim settled for £90,000 gross it is clear that the valuation was far too optimistic;
iii. If the true value of the Claim had been known at the time of Budgeting, the Defendant submits the approved figures would be much lower;
iv. To allow the approved figures would result in the costs being disproportionate, therefore under CPR 1.1 and 44.3(2) must be reduced."
"The rationale for this approach is that a claimant should be allowed to incur the cost necessary to pursue a reasonable claim but not allowed to recover costs increased or incurred by putting forward an exaggerated claim and a defendant should not be prejudiced if he assumes the claim which was made was one which was reasonable and incurs costs in contesting the claim on this assumption."
The hourly rates issue
"Fundamentally, this conclusion reflects what is in my judgment the clear intention of costs management as set out in CPR 3.18(b), namely to reduce the cost of the detailed assessment process by the treatment of agreed or approved cost budgets as binding, absent good reason to proceed otherwise. If this approach be right, the scope and cost of detailed assessment of costs on a standard basis will indeed be reduced materially. Jackson LJ's view was that the burden of costs management, if done properly, would save substantially more costs than it generates, even if he reached no final conclusions and made no final recommendations in the Final Report as to how that would be achieved. It is achieved if there is a saving in the time and costs needed for detailed assessment, rather than duplication of time and expense in an unfettered landscape (even if the budget is seen as a strong guide)."
"As the notes to CPR 3.18 in the White Book reflect, the fact that hourly rates at the detailed assessment stage may be different to those used for the budget may be a good reason for allowing less, or more, than some of the phase totals in the budget."
"the allowances in the costs budget were made by reference to phases without the court having commented upon the hourly rates, either in respect of the incurred or budgeted costs. At the assessment hearing, I made reductions to the hourly rates claimed for the incurred costs to a level which has meant that the overall recovery by the claimant the period of work before the CMO has been reduced by significant amounts. Were that not to be reflected in the budgeted costs, that would mean that the Claimant will appear to recover an hourly rate as set out in Precedent H for the budgeted stage at a level that significantly exceeds the figure I consider to be reasonable and proportionate for the pre-budget stage." [italics added]