Do not reheat the Nachos! – How filing an inaccurate, copied and dishonest Costs Budget with the Court could damage your reputation.
The recent judgment of Hunt v Oceania Capital Reserves Ltd & Ors highlights the importance of filing an accurate Costs Budget and the consequences of submitting an incoherent or copied Costs Budget, even if the filing is late. If you are a litigator in costs budgeting, this case is essential reading for future cost budget filings.
The Claimant, Mr Hunt, brought a case against Oceania Capital Reserves Ltd, IPS Law LLP and Mr Farnell (the First, Second and Third Defendants respectively) for alleging he had been defrauded by the Defendants. The First Defendant had defaulted in the proceedings.
The Second and Third Defendants filed their Costs Budget (Precedent H) 59 minutes after the court deadline. Upon review of the Defendants’ Precedent H, the figures were near identical to the Claimant’s Costs Budget and appeared to have been copied without any consideration, lacked consistency and was deemed to be dishonest. The court found this breach to be serious as the Statement of Truth was signed which compromised the integrity of the Costs Budget and the costs budgeting process.
The Defendants then applied for a relief from sanctions under CPR 3.9, which would otherwise deem them to have filed a budget limited to court fees only under CPR 3.14.
Master Brightwell reviewed the Defendants’ application for relief from sanction and refused it on the following grounds:
- Whilst there was the issue of the late filing of the Costs Budget, this may have been deemed as a less serious breach had the Precedent H been accurate and correctly completed. Instead, an inaccurate and incorrectly completed document was filed.
- The figures in the Defendants’ Precedent H were copied or closely matched to the Claimant’s budget without any proper explanation. For example, the Pre-Action phase for the Claimant’s budget was £34,310.00 and the Defendants’ budget was £34,510.00.
- The Second Defendant’s witness statements did not address the more pertinent points concerning the inaccuracies and similarity of the figures in the parties’ budgets.
- Signing a statement of truth on such a document was described as a “very serious breach” that compromised the integrity of the justice system.
Master Brightwell also found that even the revised budget, which was filed later, was unreliable and lacked transparency. The application for relief from sanctions was therefore dismissed and, as a result, the Defendants were left bound by the default rule: their recoverable costs were limited to court fees only.
This judgment is a reminder that simply meeting court deadlines is not enough. Costs Budgets should be compliant, honest, consistent, properly considered and reflects the wording within the Statement of Truth.
How can PIC assist?
PIC are experts in costs budgeting and can help firms avoid the pitfalls experienced in this case. Specifically, we can:-
- Ensure that Precedent H budgets are accurate and justified to ensure they meet the standard required to safely be signed with a statement of truth —not rushed or replicated.
- Provide guidance on the correct preparation and timing of both Precedent H and Precedent R documents.
- Support fee earners in producing realistic assumptions and contingency justifications.
- Review and monitor costs budgets.
- Prevent reputational and procedural damage by ensuring full compliance with the budgeting provisions of the CPR.
Get in touch today to see how we can help you to help your clients.
Rebekkah Haughton, Costs Consultant
22.05.2025