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Costs Budgets – A New Statement of Truth

costs budgets

Why the change?  Costs Budgets

Whilst as busy costs draftsmen we have a great deal to be getting on with at present, we can’t help but sometimes look up and wonder at the strange coincidences of life.

Word has it, that the statement of truth required for completion on Costs Budgets precedent H is to be amended in the forthcoming update to the CPR, and some would say softened, to:

 “This budget is a fair and accurate statement of incurred and estimated costs which it  would be reasonable and proportionate for my client to incur in this litigation.”.

The actual purpose behind the amendment is unknown, though the removal of an explicit expression of liability on the part of the client to pay costs, and by extension the indemnity principle, is significant. Is the change perhaps influenced by a belated realisation that under a CFA, a liability to pay costs will not crystalise until the claim has been successfully concluded, or in circumstances otherwise entitling the solicitor to be paid under the terms of the agreement, and so in its present form is perhaps inappropriate in that context? Or does it give an indication of the direction of thought of the rule makers as to the indemnity principle itself?

The happy coincidence of course is the timing, following soon after the decision of the Honourable Mr Justice Stuart-Smith in  BANK OF IRELAND v PHILIP PANK PARTNERSHIP [2014] EWHC 284 (TCC) in which a slightly more relaxed, and we would say sensible, approach was taken to the situation the Claimant’s solicitor found himself in, namely having put his signature only to the words ‘Statement of Truth’ rather than the actual wording of the same. Not every instance of non-compliance will be considered equal with sanction automatically applicable to all, and in a welcome instance of what could be mistaken for common sense, no sanction was considered to apply.

We can only hope for more instances of the interests of justice triumphing, rather than those of its administration, as we lower our eyes back to more immediate matters in hand.