COSTS INCURRED PRE-BUDGET ARE HIGHLY RELEVANT: FUTURE COSTS COULD BE DRASTICALLY REDUCED
In Redfern -v- Corby Borough Council (QBD 03/12/2014)* Judge Seymour QC upheld the decision of a deputy master that the amount of costs already incurred had a major impact upon the future costs budget.
The claimant was brining an action alleging psychiatric injury due to stress, harassment and bullying at work. The trial was to be for 7 days and each side to call two expert witnesses. The claim was valued at £700,000.
THE COSTS BUDGETING HEARING
At the hearing the master observed:
- That it was worrying that the claimant’s cost budget was equal to the value of the claim.
- That the costs incurred were excessive and disproportional.
- That the approved budget was therefore much lower.
The judge found:
- The master had not sought to approve or disapprove costs already incurred.
- The master had recorded his decision on those costs and taken them into account when considering the reasonableness and proportionality of subsequent costs.
- This was something that the master had to de by Practice Direction 3E (costs management).
- It was sensible to attempt to fix a figure that was reasonable and proportionate for the entire action.
- The practice direction was applied correctly.
- The only way to take into account excessive costs already incurred was to approve subsequent costs at a lower level than they would otherwise be approved.
SO INCURRED COSTS ARE HIGHLY RELEVANT TO FUTURE COSTS BUDGETING
The court cannot “budget” past costs. However it is clear that the past costs are highly relevant to the costs budgeting process. High, or excessive costs incurred prior to the costs budget could lead to the future budget being curtailed.
* Reported on Lawtel. This post is based on the Lawtel note.