1 February 2013Print This Post

Henry solicitor: CA ruling does not undermine Jackson’s costs management reforms

Budgets: ignore the new rules at your peril, says Daniel Taylor

The Court of Appeal’s ruling on costs budgets earlier this week has not undermined the Jackson reforms, the claimant solicitor from the case has argued.

In Henry v NGN, the Court of Appeal found that in the circumstances of the case, there was “good reason” to depart from the approved budget, leading to criticism that it did not send a clear message on the importance of costs management and would spark satellite litigation.

However in response, Daniel Taylor, the partner at London firm Taylor Hampton who ran the case, said the ruling was not a licence for parties to flout the rules on budgets and still get all their costs.

“The Court of Appeal pointed out that the new rules coming in to effect for all multi-track claims on 1 April are different from the defamation costs management pilot scheme [under which Henry was run],” he said.

“The new rules impose greater responsibility on the court for management of costs and impose greater responsibility on the parties for keeping budgets under review. They lay greater emphasis on the importance of the approved or agreed budget as providing a prima facie limit on the amount of recoverable costs.”

Mr Taylor cited the comments of Lord Justice Moore-Bick in Henry, when he said: “In these circumstances, although the court will still have the power to depart from the approved or agreed budget if it is satisfied that there is good reason to do so… I should expect it to place particular emphasis on the function of the budget as imposing a limit on recoverable costs.”

Mr Taylor said: “The warning is stark – ignore the new rules at your peril. As with any substantive change to law or procedure, there will inevitably be a certain amount of satellite litigation where a receiving party has fallen foul of the new rules.

“What is clear, however, is that it will be a particularly brave litigant who would seek to gamble on the court finding ‘good reason’ in order to incur costs outside of its approved budget. Multi-track litigators would be well advised to study the new rules carefully and make sure that procedures are in place to ensure compliance. This judgment makes it clear: Jackson is alive and well and here to stay.”

By Neil Rose

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