How inaccurate anticipated costs could lead to upward Costs Budget revision rejection

Lee Doore – Senior Costs Consultant – PIC

The Case of Seekings & Ors v Moores & Ors [2019] EWHC 1476 (Comm) dealt primarily with a dispute over the running of a company.

In July 2018, the Claimant filed a request for further information. The Defendant’s failure to address the same adequately led to two successful applications by the Claimant, ordering the Defendant to disclose the requested information.

A month following the request, the Defendant’s Solicitor filed a signed Precedent H (costs budget) for the sum of £396,32.00, with the Claimant’s Precedent H amounting to £510,493.00.

Following negotiations, each party’s’ estimated costs (Defendant £254,167.00 & Claimant £329,795.00) were agreed. At the CMC in front of his Honour, Judge Worster, a costs management order was approved in those terms.

In March 2019, the Defendant made an application seeking to revise their budget, outlining additional costs incurred as a result of the Claimant’s request for further information, along with increased documentation that was required to be reviewed as part of that disclosure process.

The Defendant’s revised estimated costs now totalled £383,977 (against the approved estimated costs of £254,167.00), with the majority of the additional claimed costs having already been incurred.

Upon attendance at the application hearing, again before HHJ Worster, the Judge raised the question of whether or not the Court had jurisdiction to revise a budget under PD 3E paragraph 7.6, when that involved approving costs which have in fact been incurred following the date of the last approved budget? HHJ Worster also highlighted that the said question did indeed raise elements of some controversy.

That said, HHJ Worster concluded that as the Defendant had not proven that there had been a significant development, he did not have to rule on that issue.

In respect of disclosure, arguments raised by the Defendant to justify the increase sought, stating amongst other things, the number of documents they had to review, were elements of the costs that should have been anticipated, as adjudged by HHJ Worster.

Furthermore, HHJ Worster noted that in relation to the request for further information, that they were made prior to the Defendant preparing their original Precedent H, and the same being agreed.

The Claimant’s argument stated that the Defendant should not be entitled to any additional increase to their Precedent H given that they had failed to adequately outline their claim or provide further requested information when ordered to do so.

The Claimant’s argument was upheld, with HHJ Worster outlining that the court would only approve costs which were reasonable and proportionate. The increase in the Defendant’s costs was of their own making when they failed to answer the requests for further information properly which would not warrant an upwards revision to their budget.

The above case outlines the importance of running your case within the confines of the anticipated costs, accounting for every aspect of the same at the time of preparing a Precedent H and complying with any requests/orders in as speedy and economical way as possible. Thought must also be given as to whether any revision/increase in costs sought amounts to a valid “significant development”.

For further details as to how Partners in Costs Ltd can assist with any Cost Budgeting needs please contact us for a free and impartial discussion.

 

Lee Doore – Senior Costs Consultant – Partners in Costs

24.10.19

 

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