Costs Management – The First Year

Rob Street

Rob Street, Costs Lawyer, takes a look over the first year of Costs Management and details his experiences.


In February 2014 the great and the good met in order to discuss what, in my opinion, is the shambolic state of the costs management process following its implementation in April 2013.  Those present, included, inter alios, Mr Justice Ramsey, His Honour Judge Simon Brown QC, District Judge Besford, Alex Hutton, and the Senior Costs Judge, Judge Hurst.  From the outset it would appear that there is a judicial reluctance to the process summed up by District Judge Besford :

“From having done a straw poll of some of my colleagues, there is, certainly in the regions, an element of hostility to costs budgeting and costs management.  They would prefer not to do it.  I am told that in certain areas, Judges have unilaterally decided that in each case it is not suitable for costs budgeting”.  Alex Hutton added “The clinical negligence masters are not particularly keen on it, partly because they do not think they have the resources.  There is certainly opposition in various different places”. 

Having now conducted a number of costs management hearings myself, District Judge Besford then, very nearly, addressed the crux of the issue “It is very difficult to say.  A lot of them see it as a wasted exercise.  They say in the provinces that we are not getting the significant multi-track cases.  They tend to be fairly bog standard PI cases.  They tend to think that the process of Detailed Assessment that used to be in place was more than sufficient.  Why mend something that, in their opinion, is not broken”.

Obviously, the District Judge is not entitled to budget costs to the date of the Hearing (PD2.4 of CPR Part 3) but only estimated projected costs and therefore a Detailed Assessment of the costs may be required in any event failing agreement of the costs to date.  There is also the distinct possibility of a case settling post-budgeting but well before the Trial.  Those at the coal face will tell you this effectively renders the approved budget worthless.

At present Alex Hutton is chairing a committee which will hopefully lead to a Bill of Costs compatible with the costs budgeting process; however, this can only beggar the question of why this issue was not addressed before April 2013?

On a slightly separate but intertwined note, in May 2014, Professor John Peysner, a former chair of the Civil Justice Council’s Costs Committee, published a report stating, inter alia “The biggest threat to the success of costs budgeting comes from the “inconsistency and lack of expertise” of the judges involved”.

Whilst I echo this sentiment, of far up more importance, in my opinion, is a Bill of Costs compatible with the budgeted process which hopefully will give rise to a position whereby costs in settled cases can be correlated with the approved budget.  Until then all of the tinkering in the world will be of little effect.  Also, there remains the existence of PD2.4 of Part 3 CPR.