The Benefit of Variation in Costs Budgets
If ever there was good reason to vary a Costs Budget, this is it.
If ever there was a good reason to vary a costs budget, this recent clinical negligence case is a prime example.
The case, which stood out for PIC Costs Lawyer Luke Reeve, saw improbable events occur and in turn meant that there was a significant development in the litigation.
In order for the costs budgeting process to work to maximum effect, it is essential that any possible overspends, or any unplanned and significant developments are identified at the very earliest opportunity, and notification is provided to the other party for agreement; a process many are familiar with to ensure costs associated with the application are recovered.
Here, Luke, who has dealt with a plethora of clinical negligence cases over the years, explores the costs process for this case in which something out of the ordinary occurs.
In a recent clinical negligence case, which arose from a negligent delivery of an infant, it was seen necessary for the claimant to revise the costs budget following a Case Management Order. This was due to significant events in the litigation.
In accordance with rule 3.13, Costs Budgets were filed and exchanged and a Case and Costs Management Conference (CCMC) was listed before the Royal Courts of Justice where a Costs Management Order was made under rule 3.15.
Following the CCMC the Claimant’s Neuro-Radiology expert unexpectedly passed away. At the point of the unfortunate death of the Claimant’s expert there had been significant work undertaken in respect of the experts including a joint meeting of the Neuro-Radiology experts. Following this joint meeting it became apparent that the experts were not in agreement in relation to their respective reports and it therefore became necessary for the Claimant to instruct a second Neuro-Radiology expert.
In light of these significant developments, it was the Claimant’s case that the death of the Neuro-Radiologist expert constituted a significant development in the litigation as to warrant a revision to the budget.
Prior to the application, the Claimant invited the Defendant to agree with the Claimant’s Neuro-Radiology expert evidence and thereby eliminating the need to proceed to trial with a new Neuro-Radiology expert. However, this could not be agreed.
Rule 7.6 provides that where a Costs Management Order has already been made and the costs are exceeding, or likely to exceed, the costs permitted under the Costs Management Order each party shall revise its budget in respect of future costs upwards or downwards, if significant developments in the litigation warrant such revisions. Such amended budgets shall be submitted to the other parties for agreement.
In these circumstances the Claimant made an application for leave to rely upon a second Neuro-Radiology expert who would be able to give evidence at trial. It was the Claimant’s case that without oral evidence being available at trial the Claimant would be placed at significant disadvantage if the Defendant was able to call upon their Neuro-Radiology, whilst the Claimant could only rely upon one who was deceased. The application and amended Costs Budget of the Claimant was submitted to the other party for agreement.
Both the application to reply upon the expert evidence of a second Neuro-Radiologist and the Claimant’s amended Costs Budget was disputed by the Defendant, despite the Claimant’s contention that there have been significant developments in the litigation.
Once the offer had been made and refused, it was contended that that the Defendant ought to have conceded that the Claimant was required to instruct a second Neuro-Radiologist.
In light of the Defendant’s stance and in default of agreement the Claimant’s amended budget was submitted to the Court, together with a note of;
(a) The changes made and the reasons for those changes and
(b) The objections of any other party. Rule 7.6 further provides that the court may approve, vary or disapprove the revisions, noting to any significant developments which have occurred since the date when the previous budget was approved or agreed.
Given the stance of the Defendant it was necessary to proceed to an application hearing. At the hearing the Court found in favor of the Claimant that there had been significant developments in the litigation and that if there was ever good reason for a Costs Budget to be revised, this was it. Permission was granted for the Claimant to have leave to rely upon a second Neuro-Radiologist and the Claimant’s budget was revised upwards to reflect the work necessary in identifying and instructing a suitable alternative expert and the costs associated with the same.
The Claimant also contended that the costs associated with the application should be met by the Defendant since the application to rely upon the second Neuro-Radiology expert was necessitated by the unreasonable approach adopted by the Defendant. Rule 7.9 provides that, if interim applications are made which, reasonably, were not included in a budget, then the costs of such interim applications shall be treated as additional to the approved budgets. The Defendant was therefore ordered to pay the Claimant’s costs of the application.
The more important aspect is recognising when something unplanned is happening and what was previously improbable, now occurs. This should be immediately recognisable. On this basis, if you are aware of the foundation upon which your budget was initially prepared or set, (and you know therefore what you did not envisage happening), it will immediately prompt you to seek to amend your budget by agreement with the Defendant or an application to the court.
If it is not possible to identify any unplanned or significant developments at the earliest opportunity and thus provide notification for the other party in order to agree, it will then be necessary to make an application to the Court to demonstrate that there have been significant developments in the litigation, to warrant the Costs Management Order to be revised.
In order to ensure that the costs associated with the application are recovered on a forthwith basis it is also essential that an N260 Statement of Costs it served and filed well prior to the hearing, or at least 24 hours, in advance of the application hearing.
On hand to provide advice on all aspects of clinical negligence costs claims, case efficiency and management, Luke, who has vast experience in this area, can be contacted by calling 03458 72 76 78 or emailing firstname.lastname@example.org.