Is your opponent’s tactically and unrealistically low agreed Costs Budget relevant to the Judge when setting your Costs Budget?
In Woolley v Ministry of Justice [2024] EWHC 304 (KB) Mr Justice Kerr permitted an appeal of a costs budgeting decision and remitted it for another Judge’s reconsideration where the original Judge ought to have allowed the Claimant to refer to the Defendant’s agreed Costs Budget.
Although a Judge is not required to give parity between an agreed and unagreed Budget where costs are decided to be disproportionate. A comparison between the Budgets can be informative and is relevant.
The claim relates to a prisoner assaulted by other prisoners after the prison ignored his requests for transfer to another wing. He had reported a prior threat of violence from one of the assailants. He also asserted that prison staff failed to protect him from attack on the actual occasion of the assault.
The Defendant argued the vagueness of the pleaded claim and of delay. They also denied that the Claimant was at any known risk of violence from anyone or had asked to be moved to a different wing. They alleged that the Claimant was the aggressor. But admitting that the Claimant, with the aid of 3 assailants, had a fall down a flight of stairs sustaining injury. Breach of the Defendant’s duty of care was denied. The Claimant was asked for “fuller and better particulars to support the claim”.
The Defendant’s Costs Budget that the Claimant believed to have been pitched “tactically and unrealistically low” was £58,984 including £37,727 estimated costs (agreed by the Claimant) to take the claim to a two-day Trial without obtaining any expert evidence of their own. The Claimant’s Costs Budget was £121,886 of which £71,181 were for future costs for obtaining further evidence towards the substantial liability burden following the Defendant’s denial and taking the claim to a 5-day hearing due to the amount of CCTV footage, submissions on liability and as to the Claimant’s vulnerability; to review, witness and expert evidence without any experts attending. Accounting for the increased cost and difficulty with communicating and taking instructions from an imprisoned Claimant.
At the outset the Judge had in her mind a proportionate range of £60k to £80k costs based upon the value of the claim. Which had been issued for up to £25k but proceeded on the basis it would be worth up to £80k. A figure disputed by the Defendant.
At the CMC the Judge considered that the Claimant’s Costs Budget was disproportionate to the value of the claim reducing the future costs element to £26,225 to take the claim to a 2-day Trial. From arguments as to each phase, however, the Judge had taken most figures offered by the Defendant and concluded them to be proportionate for the initial phases. However for the later phases.
Trial preparation and Trial phases combined:
Defendant’s agreed Budget: £5k plus £14k
Claimant’s Budget: Precedent R offer by the Defendant £9k plus £11k
Judge’s decision on Claimant’s budget: £8k plus £3,250
The Claimant had not been allowed to refer to the Defendant’s agreed Costs Budget at all and tried to make the point that the Defendant’s offer was less than what was included as necessary in its own Budget even though the Claimant had a greater evidentiary burden. Instead receiving a comment from the Judge of not knowing the proportionality rules before proportionality was used as the sole justification for setting the figure.
Whilst in the appeal decision of Mr Justice Kerr on the first ground of disregarding the Defendant’s Costs Budget, it was recognised that the value of a comparison between parties’ Budget figures was ‘limited and may in some case be nil, or virtually nil’. That was not the same as saying the other side’s budget was ‘intrinsically irrelevant’. The same case is being litigated on the same issues and so in the latter stages the tasks to be performed by each party are similar. The Judge had therefore disregarded a relevant consideration. It was procedurally unfair to refuse to allow the Claimant to make relevant submissions in support of his case.
The Judge closing her mind to relevant consideration and not entertaining it there had been a procedural irregularity within CPR 52.21(3). The language the Judge used when addressing the Claimant’s representative on three occasions including the suggestion, he was not familiar with the rules was a serious irregularity.
The second ground of appeal, failure to consider and ensure that the parties were on an equal footing. Not expecting any principle or parity the Claimant argued that restricting the Claimant to estimated costs of £26,225 even though he bears the burden of proving liability while the Defendant has estimated costs of £37,727 albeit agreed by the Claimant, is not keeping the parties on an equal footing. Mr Justice Kerr confirmed that the Judge should have been willing to hear the Claimant’s arguments for budgeting phases based upon a comparison with the Defendant’s Budget even if the comparison might be of only passing interest to the Court. The second ground of appeal had no merit independently of the first ground.
The remedy given was that although argued that the Claimant’s Budgeted costs of £76,930 fell within the range of the £60k to £80k envisaged to be the reasonably proportionate range by the Judge. The decision was marred by the serious and other procedural irregularity:
- ‘First, the irregularity occurred.
- Second, it was unusually serious because it occurred in court and violated the fundamental principle of equal treatment of the parties before the court.
- Third, it is an unattractive proposition to say that a person whose mind was closed to a particular line of argument would have made the same decision if her mind had been open to it.
- Fourth, the Justice was far from sure that the outcome would have been the same if the judge had heard the Claimant’s representative’s submissions in full.’ The amounts offered by the Defendant might have been taken for those phases or somewhere between.
- Fifth, the balance of incurred and estimated costs will have changed as was now 5 months to Trial with a period of 4 months uncertainty waiting for the Appeal hearing.
The just solution was to remit the whole of the Claimant’s Costs Budget back to the County Court for reconsideration by another Judge. In the spirit of CPR rule 3.15(2)(a) a Judge should be open to looking at what has been claimed in an agreed Budget and offered in the Precedent R. Upon which tasks your opponent seeks to spend their costs is relevant to the Judge when considering where to allow you to spend your proportionate costs, even if the information comes from an agreed Costs Budget. They should allow you the opportunity to make those arguments and potentially influence their decision on the final figures to allow.
How can PIC help?
At PIC our service is not just about meeting the restrictive Costs Budgeting turnaround timescales for our clients. It is also about advancing respectable arguments to get the best possible outcome at CCMC. But we don’t give up there, we can also provide updates to help you monitor how you are keeping to your Budget and with applying for amendments as unanticipated circumstances arise.
If like a lot of our clients, you are trying to give Access to Justice to vulnerable clients with any size of Multi-track claim, and you need an exceptional Costs Budget preparation and support service. Please contact us to discuss how we can help you to help your clients.
David Wilkinson, Costs Consultant
28.03.2024