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Updates, Insight & Analysis


Costs Budgets – To agree or not to agree

Mar 30 2016

At a recent Cost Budget Hearing, Civil & Commercial have successfully had an updated Costs Budget served by the Defendant struck out.

The Case

The case in question was a high value personal injury matter, with liability being hotly contested by the Defendant. The notice provided under rule 26.3(1) ordered costs budgets to be filed in June 2015, and both the Claimant and Defendant complied with this order. Negotiations took place with regards to costs budgets with elements of the Defendant's budget being agreed by the Claimant, but an agreement could not be reached in respect of any phase of the Claimant's Precedent H.

Directions were subsequently agreed between the parties and the Court listed a Cost Budget Hearing to take place in February 2016. Both parties filed updated budgets in advance of the hearing.

At the hearing, Civil & Commercial submitted that the Defendant was not entitled to rely on their updated budget given the agreements reached in respect of the initial budget and that in order to revise their budget 'significant developments' in the litigation had to have occurred.

In addition, it was submitted that despite the fact that costs budgeting has now been with us for well over two years, the Defendant only filed their updated budget 4 days before the Budget Hearing - in direct contradiction with the rules which state, a budget must be filed at least 7 days before the first case management hearing.

The Decision

The Court did not grant the Defendant permission to rely upon their vastly increased updated budget in light of the agreement reached in respect of the initial budget filed. In addition and notwithstanding the Claimant's agreement, the Court found that the Defendant's updated budget had been filed out of time and permission would not have been granted in any event.

This decision will no doubt severely diminish the Defendant's capabilities of continuing to defend the claim with the robust approach taken to date and shows that the strategy of filing grossly inflated budgets a few days prior to costs management hearings will not always bear fruit.

Daniel Jones - Costs Draftsman, Civil & Commercial