12 September 2013Print This Post

Master more than halves £1m budget

Harman: hourly rates should impact budget

A High Court master last week more than halved a proposed budget in a quantum-only cerebral palsey case, it has emerged.

Leading costs lawyer Matthew Harman told this week’s PI Futures seminar in Manchester that the master also refused to hear any argument on hourly rates.

He said Master Cook reduced the proposed budget of just under £1m to just over £430,000, in the first significant budget hearing of which he was aware.

While on the face of it “that’s a very substantial cut”, Mr Harman suggested that though such a case would cost a lot of money, “I don’t think it would cost £1m and perhaps the solicitors were making sure they had every possible eventuality put into their budget”.

He continued that Master Cook refused to hear any argument on hourly rates on the basis that his role was to set an appropriate figure for the work that was required, rather than to micro manage the case.

“It’s actually very difficult to see how hourly rates don’t have some impact on budgets,” said Mr Harman. Whether a firm is city centre, city outskirts or in the countryside would “skew” a budget, he said, “so I’m not quite sure how they’re going to square not looking at hourly rates when dealing with the budget”.

Also “slightly alarming” from his perspective of a mainly claimant costs specialist was that the master marked the budget as ‘without prejudice save as to costs of detailed assessment’.

Mr Harman, a partner at Harmans, said: “Now that can only mean one thing to me – and that is, sure as eggs is eggs, if a matter goes to detailed assessment after a budget has been set, the master or the costs judge is very unlikely to increase the costs without very good reason. But it gives paying parties another bite of the cherry and it might well be that that is the point at which proportionality becomes a bit of an issue.”

He said it was still unclear how proportionality would be dealt with in context of budgets.

Looking to the future, Mr Harman speculated that while at the moment everyone is getting “bogged down” by phases when setting a budget, it could be that the next level of detail down – tasks – becomes “the thing on which we are all judged”.

He advised claimants to maximise the figures in their budgets in anticipation of both defendants and judges looking to reduce them.

Mr Harman also touched on how provisional assessment (PA) is working and said, to his slight surprise, the news from the London courts was that it is not proving too bad. There is a heavy emphasis on short-form points of dispute and replies, he advised.

But he said paying parties are likely to run cases to a PA hearing given that they are only risking £1,500 in claimant costs and the court fee. As a result, negotiations over cases worth up to £75,000 – the PA limit – may disappear, Mr Harman predicted.

By Neil Rose

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