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Costs budgeting: partial budgets and sanctions

Page v RGC Restaurants Ltd
High Court (QB)
15 October 2018

William MacKenzie looks at the recent costs budgeting decision in Page v RGC Restaurants Ltd (2018) and highlights the importance of filing a full budget to avoid sanctions.

Summary

Initially, this matter came before Master Thornett who held that a claimant who filed a partial budget in time, but who failed to include figures for the trial and trial preparation phases, had not filed a budget that complied with the rules and therefore, in essence had not filed a budget at all. Therefore under CPR rule 3.14 Master Thornett decided that the claimant's budget was restricted only to court fees. The claimant appealed to Mr Justice Walker.

Walker J delivered a lengthy 75 page judgment on 15 October 2018. Although the claimant's appeal was partially allowed it is now clear from the judgment that it is imperative that NO partial budgets are prepared and served, unless specifically directed by the court. This restriction includes budgeting up to a certain stage in the proceedings or only in relation to liability.

The consequence of filing an incomplete budget of this nature is that a party risks either one or a combination of the following penalties:

  1. Court fees only being allowed,

  2. Court fees only being allowed for the phases not completed, or

  3. In relation to a budget filed for say, liability only no costs being allowed for any phase relating to quantum.

Background

In Page, the claimant was of the view that it would be appropriate to have directions up to a further CMC or PTR rather than all the way to trial. Consistent with that position the claimant had completed a budget only up to the further CMC/PTR phase that he was proposing, believing that a further CMC/PTR would be required. The claimant had not completed the trial preparation and trial phase of his budget. The defendant agreed the completed phases of the budget prior to the CCMC.

At the CCMC Master Thornett originally found that the claimant had not complied with the relevant provisions of the CPR and had not filed a “budget” as provided for in the rules. The Master therefore made the order which limited the claimant to court fees only.

The claimant appealed this decision and in the alternative sought relief from sanctions.

Appeal

On appeal it was decided by Walker J that a partial budget does not fall within the definition of what constitutes a “budget”. In addition, the fact that certain phases of the budget had been agreed did not negate the sanctions applied by CPR rule 3.14.

However, due to the non-compliance being only partial, it was appropriate to apply only a partial sanction. Consequently, the claimant was granted relief from sanctions in relation to the phases of the proceedings in relation to which the budget had been completed. However, for the phases where the budget was not complete (trial preparation and trial) the court ordered that the claimant would be limited to court fees only.

Conclusion

It is clear from the judgment that should a party wish to budget costs only for part of the proceedings, such as to the next CMC, to exchange of witness statements, or where a split trial is requested, they will need to prepare a full budget through to trial and then a subsequent budget up to whichever stage, or in relation to whatever specific issues it is asking the court to budget up to.

“Mr Page wanted the court to make a case management decision under which directions to trial would proceed in two stages. If he were to persuade the court of this, it was in his own interests to prepare, as suggested in Questions & Answers[1], a full budget through to trial without a second case management conference. That could then be compared with an alternative budget which would, on his case, demonstrate the advantage of providing for a second case management conference with budgets for later costs to be looked at then.”

It is also apparent that the courts are keen to use costs management and the rules on that subject as a vehicle to further the overriding objective to get cases through to trial expeditiously and at proportionate cost. In this case the Master had disagreed with the parties that a further CMC or pre-trial review was needed and ruled that the case was suitable to be timetabled through to trial.

Therefore moving forward, budgets should be prepared and served covering all phases of the case through to trial. If alternative directions or a split trial is sought, then a separate budget showing the implications of that being directed, should be prepared in addition to the full budget. The only occasion where a full budget should not be prepared is if the court specifically orders the parties to file a partial budget.

If any partial budgets have been prepared, then consideration should be given to filing a full budget along with an application for relief from sanctions.



[1] Costs & Funding Civil Justice Reforms: Questions & Answers: a publication which is part of "the White Book Service" see para 23 of the judgment.

Contact

For further information please contact William Mackenzie on 020 7645 9507 or at William.mackenzie@dwf.law  or Steven Dawson, Senior Technical Director on 0113 261 6118 or at Steven.Dawson@dwf.law

By William MacKenzie

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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