How much??! They agreed their Budgets…you won’t believe what happened next!

Brown v BCA Trading

Despite the parties in this action having agreed budgets, the Court decided that the fees for the Petitioner’s lead Counsel were excessive and could not be approved without requesting the Petitioner ‘reconsider’ their budget. Alex Taylor, Advocate, PIC, reports. 

Alex Taylorfor webAfter turning to consider budgets, Mr Registrar Jones found himself unable to approve the budgets, despite them having been agreed between the parties. Referring to CPR 3.15, Mr Registrar Jones found that he was only required to record the extent to which budgets are agreed within the parties, thus having no jurisdiction to do anything else in respect of the parts that are agreed.

However, he further referred to the white book notes to CPR 3.15(2), which contains the provision that: ‘Accordingly, the court should decline to make a CMO for the time being if it wishes to urge the parties to reconsider their budgets, whether or not those budgets are agreed’.

There is further reference to Coulson J’s decision in Willis v NRJ Rundell & Associates Ltd wherein he declined to approve costs budgets, finding the figures to be disproportionate and unreasonable. He observed that circumstances may arise in which the court approves a budget in part only and neither approves or comments upon the rest of it.

The Registrar commented that he accepted the parties agreed budgets, although both high, reflected the seriousness of the matter to them. He did not however extend his acknowledgment of this agreement to the difference between the parties Counsel’s fees for trial.

There was a significant disparity between the two parties’ budgeted Counsel fees for trial, with the Respondent estimating £287,000.00 and the Petitioner £445,000.00. The Registrar noted:

“… This is a substantial difference. I understand why both sides have decided to go to eminent leading counsel. I obviously recognise that the Petitioner has decided to instruct very experienced senior leading counsel. But I cannot at the moment understand how, on a reasonable and proportionate basis, there can be a difference of £150,000-odd between the two sets of fees. It seems to me that I cannot possibly approve fees totalling £445,000 for a trial of ten days applying the test which I am required to apply.”

“In those circumstances, taking into account the guidance in the notes, I will decline to approve those fees, at least at this stage. I will urge the Petitioner to reconsider their budget in that regard.”

With this case we see a very clear example of a refusal by the Court to approve an agreed budget. Parties should therefore be aware that agreeing a budget will not necessarily preclude the Court from deciding your budget, or elements of it, is too high. This case of course does beg the question, what the Petitioner is supposed to do? Obviously it is a matter for consideration between counsel and client. The petitioner is subject to market forces as all of us are. Should counsel be forced to negotiate their fees? Or should the client seek less costly representation?

Furthermore, what is the point in the CPR encouraging parties seek to negotiate and agree budgets, whilst on the other hand interfering with a bargain freely struck?

Alex Taylor is an Advocate at at Partners in Costs (PIC). To contact him on any matters raised in the article or on other costs matters, please click here.