Costs budgeting is not “inevitable” in high-value injury cases and lawyers should consider whether the best approach may be to dispense with it altogether, a leading practitioner has suggested.
Charles Cory-Wright QC of 39 Essex recounted a case he is currently involved in where the master acceded to a join request from the parties not to budget after they had produced budgets for consideration.
He said he wanted “to explode what seems to me a common assumption: that we have no choice but to budget our cases because there is quite simply no alternative to budgeting”.
CPR 3.15(2) provides that, where costs budgets have been filed and exchanged, the court will make a costs management order unless it is satisfied that the litigation can be “conducted justly and at proportionate cost in accordance with the overriding objective without such an order being made”.
Writing on the Human Rights Blog, Mr Cory-Wright – a former chair of the Personal Injuries Bar Association – said that, while there were many lawyers who navigated the costs budgeting rules “quite happily”, for many others, they still felt like “an inflexible and inscrutable monolith for which we have to relearn all we know every time we approach it”.
The case was a high-value injury claim – the claimant suffered catastrophic injuries, including severe brain damage, as a result of a road accident abroad – with quantum only in dispute.
He said that, aside from the complication of the case being tried in England but in accordance with the law of the country where the accident occurred, it was not an inherently more unpredictable case than others of its sort.
The court had already ordered the parties to prepare alternative budgets: one to trial two years down the line, and one to a further case management conference 15 months later, at which further directions could be given.
This was the result of both sides agreeing that there were real questions as to the stage at which it would be possible to identify with precision what further expert evidence would be needed.
At the costs budgeting hearing, Mr Cory-Wright said it became clear that the Queen’s Bench master’s appetite for budgeting at all at that stage “was not great”.
He explained: “This was essentially due to a recognition that there was genuine continued uncertainty as to a number of expert disciplines required, and that it was much more likely that certainty as to how that would be achieved by the time of a further CCMC.”
Further, it “gradually also became clear that, for similar reasons, there was an argument for not budgeting this case at all”.
With a large amount of profit costs and disbursements already incurred – which would have to be assessed come what may – any further delay in budgeting may mean that a majority of the costs would be then by incurred.
The master decided that costs budgeting – and the possibility of dispensing with it altogether – should be deferred to the further CCMC.
Mr Cory-Wright recounted: “After the hearing, both parties realised that preparation for a further CCMC with draft budgets was a potentially very expensive and fruitless exercise.”
They made a joint submission to the master – which he ultimately accepted – that this was a case where budgeting should be dispensed with, on the grounds that it was not possible sensibly to budget at this stage and that, by the time the budgeting could be done, most of the costs would already have been incurred.
The barrister said: “If it was appropriate (as it clearly was) for costs budgeting to be dispensed with in this case, there must be many other cases of which they same could be said, that is, where the parties can satisfy the requirement of CPR 3.15(2)…
“High-value, complex, catastrophic injury cases, particularly those involving capacity issues and therefore the Court of Protection, those where a large amount of the expert evidence has already been obtained by the time the case comes to the CCMC, and those where there remains significant uncertainty as to the extent of the further evidence necessary, may very well be more sensibly and proportionately dealt with by the old assessment regime rather than by budgeting.
“It seems more likely (albeit not certain) that the court will adopt this line if the parties are agreed as to it, although technically there is no need for such agreement.”
Mr Cory-Wright concluded that dispensing with costs budgeting may not mean more costs will be allowed – “indeed, it may sometimes mean the opposite”.
“However, it does seem likely to make the case concerned easier to litigate properly.”