16 February 2017Print This Post

Budget does not replace detailed assessment, says another regional costs judge

Budget: guidance needed

A second regional costs judge has ruled that an approved budget does not hinder a detailed assessment, but also called on the higher courts or the rule committee to give a definitive view.

District Judge Hale in Nottingham explicitly agreed with the ruling of his Birmingham-based colleague, District Judge Lumb, in Merrix v Heart of England NHS Foundation Trust.

In Bhojani v University Hospitals of Leicester NHS Trust, DJ Hale said: “Like Judge Lumb I think the answer… has to be more nuanced than the claimant’s contention for a fixed figure and the defendant’s contention for an entirely unfettered entitlement to attack a bill on detailed assessment.

“The budget will be a strong guide to what will be allowed on a detailed assessment and because the receiving party’s costs have already passed scrutiny once, the scope for further reduction might prove to be limited.”

Describing the budgeting stage as involving “a consideration of the landscape and assessment as a more detailed survey of the terrain” he said budgeting was not intended to replace detailed assessment.

“Had that been the intention of the rule committee, they would have made the appropriate and specific changes to CPR parts 44 and 47 and they did not.”

He added that whether or not the case management judge recorded an opinion that incurred costs were disproportionate, those costs must always be subject to a line-by-line detailed assessment.

DJ Hale said: “It seems clear to me that without an authoritative and binding ruling from the higher courts or a clear and unequivocal change to the Civil Procedure Rules, parties and judges alike will continue to operate in an atmosphere of uncertainty.

“Clarification and guidance is required urgently and whilst I have reached a conclusion, I have not done so without significant hesitation. For those reasons I have indicated to counsel that I shall readily grant permission to appeal and would hope that any appeal would be dealt with as speedily as possible.”

In December, the rule committee heard that this was a difficult issue that needed to be put out to consultation.

The judge did not accept that his decision was inconsistent with Lord Justice Jackson’s intentions. “At a detailed assessment the budget will still be an important factor in the judge’s mind. In particular he is likely to be reluctant to reduce the receiving party’s costs on grounds of proportionality when the budget has already been approved as being proportionate.

“In fact I would go as far as to say that in most cases there will be little if any scope for a further reduction on the ground of proportionality alone in the absence of a significant change of circumstances since the approval of the budget.”

But he did acknowledge that this approach would not do much to reduce the number of detailed assessments. “So far there is much anecdotal evidence that budgeting has done little if anything to reduce the number of detailed assessments taking place and the points of dispute are no shorter than they ever have been.

“However, this was not the primary objective of costs budgeting. Costs budgeting does bring with it a degree of certainty in the sense that the parties will know at the outset what the upper limit of recoverable costs will be at the end of the case unless there is a significant change of circumstances.

“It is true to say that a party cannot be certain that his recoverable costs will not be further reduced at a detailed assessment but it seems to me that certainty can never be achieved except where a fixed costs regime is put in place.”

The decision of the Court of Appeal last year in SARPD Oil has also caused confusion, and in light of that, rule 3.15 is to be amended on 6 April to make it clear that the case management hearing is not the forum to debate incurred costs, although the judge will be able to record comments on them to be taken into account at a later assessment.

Christopher Perry, instructed by Shakespeare Martineau, acted for the claimant. Robin Dunne, instructed by Acumension, the costs firm which also worked on Merrix, represented the defendant.

By Neil Rose


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