High Court reverses circuit judge’s decision to reduce costs budget

Prison: Personal injury claim

The High Court has taken the unusual step of reversing a circuit judge’s decision to reduce a costs budget, finding she “closed her mind to any argument” based on a comparison with the other side’s.

Mr Justice Kerr said that while the case law acknowledged that comparisons may have limited or no value – especially in personal injury cases because of qualified one-way costs shifting – that was not the same as saying that the other side’s budget was “intrinsically irrelevant and should a priori be disregarded as an irrelevant consideration”.

He said “none of the authorities goes that far” and comparison may be particularly useful for later phases, when “the tasks to be performed tend to be quite similar”.

Sitting with Costs Judge Brown in a personal injury claim brought by a prisoner valued at up to £80,000, he heard that Her Honour Judge Baucher, sitting in Central London County Court, limited the approved amount of the claimant’s estimated costs to £26,225 after deciding that that the budget of £121,886, of which £71,181 were estimated future costs, was disproportionate.

The defendant’s agreed budget was £58,984, of which £37,727 were estimated costs.

HHJ Baucher decided that, on the basis of the agreed directions, she would expect an overall budget in the region of £60,000 to £80,000.

Kerr J said the judge appeared to indicate that agreement to the other side’s budget did not mean it was reasonable and that, where agreement was not reached, the court looked primarily at proportionality overall (£60,000 to £80,000 being the approximate reasonable amount) and also proportionality in relation to each budget phase.

“There is nothing to indicate a willingness on the judge’s part to consider any argument [the claimant’s counsel] wanted to make that relied on the amount of the defendant’s budget and phases within it…

“In my judgment, it is inescapable that that judge closed her mind to any argument based on a comparison with items in the defendant’s costs budget.

“It is no answer to that proposition that the judge said she had read the bundles. She had not had sufficient time, through no fault of her own because of her overloaded list, to look at the documents in detail.

“She did not claim or demonstrate familiarity with the defendant’s budget or the figures in the defendant’s Precedent R. Her responses to [counsel’s] attempts to refer to the defendant’s budget show that she was not prepared to entertain arguments based on its content.”

In doing so, the judge “disregarded a relevant consideration”, he said, continuing: “The defendant’s budget did not become irrelevant merely because it was agreed or because the judge may have disagreed with the reasonableness of the amounts in it. [Counsel] was entitled to make submissions about it, for what they were worth, and was prevented from doing so.”

Even if it was likely that such arguments would not have impressed the court, this was only of potential relevance to the question of remedy.

Kerr J then rejected the argument that the circuit judge would have come to the same decision and remitted the whole of the claimant’s budget for reconsideration by another judge.

He also stressed: “I accept entirely that decisions of this kind are likely to be made at speed, under time pressure and item by item as the hearing progresses, with summary reasoning at best. It will sometimes be sufficient to say that the submissions of X are preferred to the submissions of Y. The judge’s reasoning is then taken as that in X’s submissions.

“Nothing in this judgment should be taken to require more detailed reasons for cost management decisions than are currently given. The rules need not be referred to; the judges know them and, absent any contrary indication, are taken to apply them.”

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