A JUDGMENT ON THE RELATIONSHIP BETWEEN COSTS BUDGETING AND THE ASSESSMENT OF COSTS: MAPPING & SURVEYING THE TERRAIN
In a judgment given today in Merrix -v-Heart of England NHS Foundation Trust Regional Costs Judge District Judge Lumb (sitting in Birmingham) considered the extent to which the costs budgeting regime fettered the powers and discretion of the costs judge on detailed assessment. (A pdf copy of the judgment is available here merrix-final-approved-judgment)
“It is the duty of the parties to help the Court to further the overriding objective by narrowing the issues between them. By adopting an ADR like philosophy in negotiation and the preparation of budget discussion reports it should then be possible, in the majority of cases, to produce a proportionate budget that is so accurate when compared to the actual, yet still proportionate costs, incurred at the conclusion of the case that the difference between the parties should be so negligible that it would not be worth the time, trouble or risk to pursue a detailed assessment.”
- A costs budget does not, in itself, fetter the powers and discretion of a costs judge at a detailed assessment. (Save for the point that the budgeted figures should not be exceeded unless good reasons are shown).
- However the position of the costs budget is a nuanced one. There is a duty on the parties to litigation to co-operate and narrow the issues.
- The parties should produce costs budgets where the difference between the parties are so negligible that it would not be worth the time or trouble of a detailed assessment.
(I am told that permission to appeal was given. It is likely to be expedited and heard before Christmas).
The court had been asked to consider, as a preliminary issue,
“to what extent, if at all, does the costs budgeting regime under CPR Part 3 fetter the powers and discretion of the costs judge at a detailed assessment of costs under CPR part 47.”
The judge noted that there is an ongoing debate about the relationship between a budget and later assessment of costs:-
“Although aspects of costs budgeting have been considered in a number of authorities there appears to be no direct case authority on the relationship between costs budgeting and costs assessment. The debate in the legal profession concerning this issue reflects wide-ranging views and interpretations and the parties in the present case have taken entrenched positions which can only be described as polar opposites.”
- The claimant argued that if the sums claimed were more or less in line with the budget then they should be assessed as claimed.
- The defendant (paying party) argued that the Cost Judge’s powers are not fettered by the budgeted figure. The budget was one factor to be considered in determining reasonable and proportionate costs on assessment.
The judge reviewed the rules and the arguments put forward by the parties in detail the Judge found:-