COST BITES 173: VARYING A COSTS BUDGET “AFTER THE EVENT”: IF THE APPLICATION WAS NOT “PROMPT” THE BUDGET WILL NOT BE VARIED
We are looking again at the decision in Khokan v Nirjhor (Re Costs) [2024] EWHC 1873 (KB), this time on the issue of costs budgeting. The judge considered the defendant’s budget in unusual circumstances. The claimant’s case had been struck out, the application to vary was taking place very much after the event. Some elements of the budget were allowed to be varied, however where the applications were not “prompt” a variation was not allowed.
“… Master Kaye reiterated that before revisions to a costs budget can be considered, there has to be a significant development warranting a revision and there has to be promptness. It is only if both those mandatory requirements are met that the threshold test is satisfied, such that the court will go on to consider whether as an exercise of discretion it should approve, vary or disallow the proposed variations pursuant to CPR 3.15A(5).”
THE CASE
The claimant’s case had been struck out and he was ordered to pay the defendant’s costs. The defendant applied for a variation of the costs budget.
THE JUDGMENT ON THE VARIATION OF THE BUDGET
The judge held that some of the elements of the budget would be varied. However some things did not fall within the appropriate test for variation, in particular the application to vary was not made promptly.
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- In my order from the PTR, I made provision for the parties to file proposed revisions to their costs budgets in the form of Precedent T’s by 21 June 2024. The Defendant did not do this because by this point the claim had been struck out. He did not serve his Precedent T until 8 July 2024. I am satisfied that he was entitled to wait until the hearing to determine consequential matters before serving the Precedent T.
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- The Defendant seeks to increase the budgeted figure for the issue/statements of case, disclosure, witness statements and PTR phases. These are said to reflect, respectively, (i) the need for counsel to provide further voluntary particulars of the claim and a detailed Advice engaging with the alleged SLAPP element of the claim, and recent overseas authority on the same; (ii) additional work to consider a further 222 pages of material disclosed by the Defendant during the process of preparing witness statements and some 47 hours to transcribe and translate some audio/visual material; (iii) preparing witness statements for two further witnesses whose existence emerged after the Case Management Conference where the original budget was approved; (iv) the fact that the PTR went ahead; and (v) the fact that the Defendant had already had to pay for the flights, accommodation and a visa for his witnesses to attend trial as well as the foreign process service fee, given that the claim was only struck out three weeks before trial.
“(1) A party (“the revising party”) must revise its budgeted costs upwards or downwards if significant developments in the litigation warrant such revisions.
(2) Any budgets revised in accordance with paragraph (1) must be submitted promptly by the revising party to the other parties for agreement, and subsequently to the court, in accordance with paragraphs (3) to (5)”.
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- Mr Ahmed contended that the revisions to the Defendant’s budget should not be permitted because the applications to revise the budget had not been made promptly, as required by CPR 3.15A(2). He cited Persimmon Homes Ltd v Osborne Clarke LLP [2021] EWHC 831 (Ch). At [99]-[101] thereof, Master Kaye reiterated that before revisions to a costs budget can be considered, there has to be a significant development warranting a revision and there has to be promptness. It is only if both those mandatory requirements are met that the threshold test is satisfied, such that the court will go on to consider whether as an exercise of discretion it should approve, vary or disallow the proposed variations pursuant to CPR 3.15A(5).
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- Applying those principles, I am satisfied that the revisions to the disclosure, witness statements, trial and PTR phases should be permitted. The same is true of the addition of Contingency A insofar as it reflects the Defendant’s applications for an unless order and security for costs which came before me on 7 June 2024 and the addition of Contingency B. In my judgment these all reflect significant developments in the litigation that were raised at the PTR or which relate to the process of determining consequential matters and which it is appropriate should be reflected in the costs budget.
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- However I take a different view in respect of the other elements of the Defendant’s application to vary the costs budget. I obviously do not know the date of counsel’s Advice but the voluntary further particulars were signed on 3 April 2024. I have no record of the need to vary the budget to reflect these developments being raised at the PTR. It is not clear why these issues were not raised earlier. Raising them at this late stage cannot be considered prompt.
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- The same is true of the other applications reflected in Contingency A, namely the Defendant’s application to amend his Defence and the Claimant’s application for summary judgment, which came before the Senior Master on 21 February 2024. The latter costs have, in any event, been summarily assessed on the indemnity basis and constitute the £20,646.58 unpaid costs order which led to the claim being struck out. On that basis, an application to vary the costs budget to reflect them seems otiose.