Costs BUDGETING - The COURT’S TAKE ON IT Andrew Gordon-Saker Senior Costs Judge Costs BUDGETING - The COURT’S TAKE ON IT

“We view with trepidation and antipathy yet another area of out of court invigilation which it might be suggested the judiciary take on. Consideration of parties’ budgets would be a very significant and difficult exercise. It would also be very time consuming. If a judge is worrying his way through two rival litigation budgets, assuming he had somehow acquired the expertise to do so, he will not be trying cases. Judicial productivity would be likely to fall as fast as morale if we are required to do this work. It is work at which (whatever training may be provided) a judge is likely to be far less competent than the solicitors whose budgets are being managed....

...If the budget management was badly done it could cripple the proper presentation of a case. It would be likely to result in much ancillary litigation. We are not in favour of moving down this road, however beguilingly professors may argue for a quasi business approach to litigation ‘projects’. The best way to minimise costs is for skilled people to work briskly and economically because they want to, not because somebody is trying to control them.” Submission to Jackson LJ by the Council of Her Majesty’s Circuit Judges

“We consider that more costs education for the Bench is required “We consider that more costs education for the Bench is required. Enormous variations have been seen in what Judges think elements of litigation should cost (which will depend on the nature of their erstwhile practice) and this is unhelpful. Somehow some sort of consistency needs to be achieved.” The Costs Management Working Group

Budgeting is not prospective detailed assessment Budgeting is not prospective detailed assessment. The court’s approach should be macro, rather than micro. It is the bottom line which is important - an agreed or approved figure for each phase. The focus now is proportionality. Budgeting and case management are symbiotic.

PD 3E, para 7.3:    “If the budgets or parts of the budgets are agreed between all parties, the court will record the extent of such agreement. In so far as the budgets are not agreed, the court will review them and after making any appropriate revisions record its approval of those budgets. The court’s approval will relate only to the total figures for each phase of the proceedings although in the course of its review the court may have regard to the constituent elements of each total figure. When reviewing budgets the court will not undertake a detailed assessment in advance but rather will consider whether the budgeted costs fall within the range of reasonable and proportionate costs.”

PD 3E, para 7.4: “As part of the costs management process the court may not approve costs incurred before the date of any budget. The court may, however, record its comments on those costs and will take those costs into account when considering the reasonableness and proportionality of all subsequent costs.”

The court cannot approve the amount of incurred costs. The court can however record comments about the incurred costs. The court will take the incurred costs into account when approving or revising the budget.

Record its comment that £100,000 is sufficient for the whole case and allow nil for this phase in the budget. Record its comment that £100,000 is sufficient for the whole case and allow the reasonable and proportionate figure for the work that remains to be done under that phase in the budget.

CPR 3.18:   In any case where a costs management order has been made, when assessing costs on the standard basis, the court will – (a) have regard to the receiving party’s last approved or agreed budget for each phase of the proceedings; and (b) not depart from such approved or agreed budget unless satisfied that there is good reason to do so.

What is left for detailed assessment? The costs incurred before the budget. (2) The budgeted costs if there is a good reason to depart from them: Henry v News Group Newspapers [2013] EWCA Civ 19 (3) The budgeted costs if the phase has not been completed.