‘Significant development’ need not be specific for budget revision

McCloud: Relatively rare situation

A ‘significant development’ in litigation requiring a budget to be revised need not be a specific event at a specific time, a Queen’s Bench master has ruled.

Master McCloud said there would 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”.

She said a change of value may not alone be enough and it had to be clear what the impact of the development would be or else lawyers would end up preparing “inflated, precautionary budgets”.

She was ruling in Thompson v NSL Ltd [2021] EWHC 679 (QB), where a personal injury claim started life in the county court valued at about £150,000 but then jumped to £3.9m because of evidence received shortly after the budget was filed and served.

The budget was not amended for the budgeting hearing – when the case was transferred to the High Court – because the impact of the new medical evidence, other than on value, was not yet clear, the claimant’s solicitors, Bond Turner, said.

Master McCloud said that, in the “presumably relatively rare” situation of the claim changing like this between filing the budget and the case and costs management conference (CCMC), “parties can only do their best in their professional judgment, keeping the relevant court informed, and that requiring something too close to perfection would turn the budget revision rules into a snare for the unwary”.

She continued: “None of this is by way of discouragement to parties to try to vary a budget if it is feasible just before CCMC to avoid a later variation, by agreement, or to deal with modest points of variation ‘on the hoof’ if the judge is willing and able but in a case where the nature of the claim changed along with its value, as here, justifying transfer up to the High Court, that would have been too much to expect either from parties or judge.

“It is far better in my judgment that a ‘proper job’ of budgeting is done on the basis of properly drafted and served budgets at a CCMC with clear assumptions served in time for the strict CPR deadline.”

Budgeting should then either be deferred or done in the knowledge it would likely be revised.

She said that where a significant development took place before the budget was filed, it should be dealt with then, with the party applying for an extension of time if necessary.

The revision here was sought on the basis that the case had turned out to be more complex and more demanding of legal time and cost than was reasonably anticipated when the budget was drafted.

Master McCloud concluded that it would have been “unwise” to try and deal with the changed situation at the county court CCMC – the claimant’s solicitors “acted reasonably” in applying for the revision without undue delay after the case was transferred to the High Court.

She went on to decide the revised figures for various phases.

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