Quantum Leap
If you have come here to reminisce about the adventures of Dr Sam Beckett in the science fiction television series, Quantum Leap, then “Oh Boy” you have come to the wrong place. Instead, we are here to review Master McCloud’s Judgment in the case of Thompson v NSL Ltd [2021] EWHC 679 (QB).
This was a personal injury claim which was commenced in the County Court with a value in the region of £150,000. The Claimant’s budget was part-approved in relation to the Issue, CMC, Disclosure, Witness Statements, Expert Reports, PTR and ADR/Settlement phases. However, between filing the initial budget and its approval at the CCMC, the Claimant’s claim increased in value to £3.9 million. The case was transferred to the High Court and the Claimant applied to revise their costs budget upwards.
It was the Claimant’s position that medical evidence received between the time for filing the budget and the CCMC had increased the value of the claim. The impact of the new medical evidence was not clear at the CCMC in February 2019 and as such an application to vary the budget was later filed in September 2019 once the full picture had developed. The upwards variation was based on the argument that the case had turned out to be more complex and demanding of legal time and costs than was reasonably anticipated when the budget was prepared, rather than on the increase in value alone. The key significant developments for variation of the budget were (i) a significant delay to the eventual trial date (ii) more significant disclosure than originally anticipated (iii) significantly more future time and resource as well as cost of expert fees owing to increased expert evidence.
It was the Defendant’s position that the Claimant should have revised their budget between the period of filing and the CCMC when the new medical evidence was received. It was averred that at no point up to or during the CCMC did the Claimant apply to vary the budget, ask for an increase to the budget or request that the budget could be updated later.
In Judgment, the Master questioned the concept of ‘a development’ and whether this had to point to a specific event to establish. It was highlighted that there will be cases “where the nature of the claim evolves and a time comes when it is reasonably appreciated that it is a different type of beast from the claim which was initially pursued, and that one may not be able to point to one specific event which led to that so much as a collection of factors”. The Master believed that this was one of those cases and stated that “I do not think it can fairly be said that the Solicitors for the Claimant ought reasonably to have foreseen the fact that the value of the claim would increase as much as it did”. To anticipate such a development depending on expert medical evidence not yet seen would “set the bar too high and to encourage inflated, precautionary budgets”.
This case differed from previous decisions in that the significant development occurred between the filing of the budget and the CCMC and the timing was presumably relatively rare and unlikely to be found in most cases. The Master opined that “if a development requiring a revised budget takes place before the date by which the budget has to be filed and served then it must be taken into account in the budget”. In this case, the Master found that there was insufficient time and resource to competently draft a revised costs budget before the CCMC and furthermore the impact of the new medical evidence and increased value was still ‘bedding in’. The Claimant’s application to vary the budget was made without undue delay after the transfer to the High Court and it would have been unwise for the Claimant’s Counsel to guess at suitable figures on the day at the CCMC.
It was concluded by the Master that “In my judgment the Claimant’s side acted reasonably in making this application when it did, and the developments which had taken place prior to the CCMC likely made it fairly obvious that one or other side would be likely to consider a revision thereafter, promptly”. This case being reviewed is a QOCS case. The Claimant’s budget was varied and increased by £96,500 across five of the budgeted phases. The Defendant did not seek to revise their budget.
In exercising discretion, the Master considered earlier reported decisions in the following cases:
- BDW Trading v Lantoom Ltd [2020] EWHC Civ. 2744 (TCC).
- Al-Najar v The Cumberland Hotel (London) Limited [2018] EWHC Civ. 3532 (QB).
- Sharp v Blank and Others [2017] 3390 (Ch.D.).
The Master restated the principle from Al-Najar ‘that as a matter of policy the bar for what constitutes a significant development should not be set too high because otherwise parties would always err on the side of caution by making over-generous assessments of what was to be anticipated’. It was also confirmed that CPR 3.15A did not change the principle in BDW Trading that ‘the thrust of the previous case law under rule 3.7 (the predecessor to that rule) and that once the ‘threshold’ of a significant development is met the court is entitled to acknowledge that may have knock-on developments to subsequent phases in the case’.
I must confess to having never seen the show, Quantum Leap, but felt it was a good title for this e-shot and, upon seeking inspiration for some useful and witty quotes, I stumbled across this one: “If we knew the unknown, the unknown wouldn’t be unknown”. This quote resonates with the cost management exercise generally. As legal practitioners and costs specialists we can only use our experience and knowledge to foresee the likely path of the litigation as it is presented at that stage. Of course, there are going to be cases where unforeseeable significant developments arise which change the course of litigation and warrant budget variation.
If you require any advice or assistance with the cost management process at CPR 3.12 to 3.18 including the revision and variation rule at 3.15A then please get in touch.
Mathew Lawton, Costs Lawyer
17.06.21