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Keeping an Eye on Costs

Keeping an Eye on Costs

Costs budgeting is at the forefront of many of our minds at the moment. But, the realities of appealing the assessment of a costs budget pose key difficulties, as seen in the case of Havenga v Gateshead NHS Foundation Trust [2014] EWHC B25 (QB)

Case Overview

The Claimant was born on 28 March 2003 with Hemiplegic Cerebral Palsy, which, it was alleged, had been caused by the Defendant’s negligence. This affected the left side of his body and gave rise to disabilities such as impaired hearing, limited speech and language and mobility related problems. Liability had been agreed on a 75:25 basis and the matter proceeded on the issue of quantum alone. The claim had an estimated value of in excess of £5million.

The Issues

In order to make an assessment on quantum, the evidence of no less than 14 experts in eight different fields was required. Parties disagreed over trial estimates, with the Claimant estimating 10 days yet the Defendant limiting his estimation to a mere 5 days. The matter proceeded to a CCMC, at which point the court made a number of reductions to the Claimant’s budgeted costs, namely;

  • Disallowing the costs of junior counsel’s involvement;
  • Statements of Case phase – Solicitors’ costs reduced from 68.15 hours to 30 hours;
  • Experts’ Reports phase – Solicitors’ costs reduced from 429.8 hours to 140 hours;
  • Experts’ Fees – reduced from £66,975 to £49,000;
  • Trial Preparation and Trial phases – Solicitors’ costs reduced from 199 hours to 70.5 hours.

These reductions reduced the Claimant’s costs budget from £769,854 to £463,915.13.

The Costs Management Order was appealed on the grounds that in reaching the decision, the District Judge had exceeded the wide ambit of his discretion with regards to the Grade A and C time for the reductions to the statements of case, experts’ reports, trial prep and trial phases, together with his reductions to experts’ fees.

The court was quick to emphasise, however, that the approval of a costs budget was a case management decision, and accordingly, appellate courts should be slow to interfere with such decisions; “It is not the role of the appellate court to tinker with costs budgets…” In considering the various grounds of appeal, the court held that whilst it would have, on balance, allowed more Solicitor time than the District Judge, the overall effect of the costs budget was reasonable and proportionate in accordance with Practice Direction 3E 7.3.  Accordingly, the appeal was dismissed. Noteworthy, it seems, is that the revised costs budget was three times higher than the Defendant’s costs budget.

Analysis

It is clear that unless a Judge has gone beyond the wide ambit of discretion allowed for under Court rules, it is unlikely any appeal will be successful, giving rise to potential costs consequences.  Striking, perhaps, is the level of scrutiny that the judges in this case, both at first instance and on appeal, applied to the costs budget. Arguably, this bordered on the level of scrutiny expect at a detailed assessment: varying the time for fee earners at various stages. Of course, though, any adverse assessment brings with it a plethora of consequences. A deficit of recoverable costs holds significant ramifications on the day-to-day conduct of the case, leading to potentially difficult decisions being required. It makes sense, therefore, that we are instructed to provide advice and advocacy services at CCMC’s since our experience in this area is comprehensive.

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