Introduction
Seeking an excessive Costs Budget is not a great idea – this was shown in the recent case of Nicholas Worcester v Dr Philip Hopley [2024] EWHC 2181 (KB). This was a Clinical Negligence case whereby the Claimant filed a Costs Budget with estimated costs in the sum of £342,263. Following the CMC, the Claimant’s budgeted costs were reduced by 53.35% to £159,675. The Case Management hearing was listed for 11 April 2024 with a Costs Management hearing thereafter listed for 15 May 2024. The costs of the CMC were reserved, and a hearing was listed for 16 July 2024 to determine the same.
Arguments
As a result of the substantial reduction in respect of the Claimant’s Costs Budget, the Defendant argued that the Court should exercise their discretion under CPR 44 and order that there be No Order as to Costs in relation to the CMC and the Claimant pay the costs of the hearing of 16 July 2024.
The Defendant argued that the Claimant produced an unrealistically high Costs Budget and the level of the reductions to the same took the case out of what would be considered ordinary.
The Claimant rejected the Defendant’s argument and stated that the “final arithmetical reductions” should not be taken to show that an unreasonable approach had been adopted by the Claimant. The Claimant also argued that this was no different to any other costs management hearing and therefore Costs in the Case should apply. Representatives for the Claimant outlined the risk of potential satellite litigation should the Court order something other than the usual Order.
Judgment
The Court rejected that there was an intrinsic link between a case management and costs management when it came to costs and concluded;
19. In short, a party that resolutely proceeds to a separately listed costs management hearing with an overly ambitious budget should not readily assume that the court will be willing to see both its time and resources and those of opposing parties engaged without any potential consequence in costs.
In summing up, Master Thornett found the following:
30. The overall impression and conclusion I reached was that the Claimant’s Precedent H was unreasonable and unrealistic in terms of proportionality. It led to a polarised approach between the parties on budgeting that had prevented settlement and so necessitated a separate hearing proceeding that either might have been vacated or, even if not, should have followed a more conventional process of modest arithmetical adjustment and modification, rather than fundamental deconstruction of the Claimant’s proposals and as led to sizeable reductions.
Conclusion
As a result, the Court ordered that there be no costs in relation to the original CMC of 15 May 2024 with the Claimant being ordered to pay the costs of the hearing of 16 July 2024. The Court also stated that the Claimant’s costs management costs be reduced by 15%.
This case is demonstrative of the potential issues of preparing an excessive budget. This was of particular issue in this one as the directions had already been approved/ agreed. When the parties are starting from the same directional position, unreasonable costs stand out like a sore thumb.
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The full case can be found here.
