CAN MR MITCHELL STILL GET HIS COSTS? A PROFESSOR'S OPINION

The comments section is at the bottom right hand side of this blog and a comment from Professor Hibbert made earlier this week may have been missed by many. I set it out below. No doubt this will give rise to some discussion and debate.

On the 2nd December Professor Hibbert wrote:-

“As a matter of interest, the wording of CPR 3.14 is that a failure to file a budget is that the defaulting party is deemed to have filed a budget limited to court fees – the sanction is not that the overall costs after trial will be limited to court fees. Is it not possible for Mr. Mitchell’s solicitors to apply to vary their “costs budget” under PD3E 2.6:
“Each party shall revise its budget in respect of future costs upwards or downwards, if significant developments in the litigation warrant such revisions. Such amended budgets shall be submitted to the other parties for agreement. In default of agreement, the amended budgets shall be submitted to the court, together with a note of (a) the changes made and the reasons for those changes and (b) the objections of any other party. The court may approve, vary or disapprove the revisions, having regard to any significant developments which have occurred since the date
when the previous budget was approved or agreed.”

Would not the listing of the case for trial constitute a significant development warranting the increase in budget from merely “court fees” to full trial costs” ?”

Professor Peter Hibbert
University of Law

FURTHER DISCUSSION

And see “Domthedrafty’s” comment below:

“I thought this would be an argument in this case – but I also wonder whether there is the potential for a Sylvia Henry v News Group Newspapers Ltd conduct argument i.e. Mr Mitchell should be allowed to exceed his filed budget (even one which has been deemed filed), if NGN become rather aggressive litigants in light of the inequality of arms?”

MARK HARVEY  GIVES A CONTRARY VIEW

“No; In my humble opinion, “significant development” in the budgeting context means an unforeseen event; not in the contemplation of the party when budget filed.”

OWAIN RHYS JAMES COMMENTS

An interesting argument though I cannot see how there mere listing of a trial can be a “significant development” in the litigation: a trial is the inevitable result of litigation. However, there may be an argument that changes to the anticipated trial procedure may give be a basis for revising the budget: for example a significantly longer trial than expected, splitting liability and quantum trials, increase in expert evidence or, specifically in relation to defamation claims, the court exercising its discretion to provide for trial by jury. It is unlikely that an opposing party would ever agree to a revised cost budget where a party is deemed to have served a budget limited to fees. Therefore any revised budget will almost certainly require the court’s approval. At risk of putting a Jackson-shaped spanner in the works it seems to me that a fundamental question which the Court will need to answer in due course is whether any change to the budget which allows for a budget of more than the court fees (after the imposition of a sanction deeming that to be the limit of the budget) is to be viewed as relief from sanctions. In practical terms that is what the revision would appear to achieve. As such would an applicant seeking to revise a budget on that basis have to satisfy the requirements of CPR 3.9 in order to revise his budget in any event.