The case of Simpsons (Preston) Ltd & Anor v MS Amlin Underwriting Ltd [2023] EWHC 1370 (Comm) is one that arises as a result of Covid restrictions. This was an action brought by the Claimants against the Defendants, both car dealers, relating to the payment of insurance after business interruptions caused by Covid restrictions that had been put in place.
Within the course of these proceedings, the Claimants had a Budget agreed in September 2022 in which their Disclosure Phase was agreed at £59,665.00. However, they sought to increase this quite dramatically when it became apparent that they had vast amounts more Disclosure than had been anticipated and indeed provided for by them at the Budgeting stage. In fact, the Claimants sought an additional sum of £58,142.56 on the basis that they had uncovered extensive additional material, increasing their previous estimated documents from a few thousand to in excess of 362,000.
Despite this seemingly significant increase in the level of Disclosure, the Court were not persuaded to allow the Claimants to vary their previously agreed Budget on this occasion, with the Defendant seeking to argue that such an increase was not a “development” at all as dictated by CPR 3.15a but instead the simple realisation that Disclosure was greater than initially anticipated.
HHJ Pearce found that there had not been a “significant development”: “Whilst I acknowledge the need to avoid setting the bar too high by excluding matters that could not reasonably have been known, even if they can be said to be internal to the party seeking the variation, I am also conscious that the bar must be sufficiently high to encourage a rigorous approach to costs budgeting at the outset, otherwise a potential paying party cannot have the reasonable assurance that a costs budget is supposed to bring as to its potential liability in the event of an adverse costs order.”
The Court didn’t accept that an increased number of documents necessarily meant a much greater concern during the Disclosure process and on this basis, the bar was not met by the Claimants.
The process of varying Budgets, does it seem continue to evolve and whilst there is still a lack of clear guidance on what can be said to constitute a “significant development”, this particular case goes a little way to help interpret some of the issues, although cases will of course continue to be dealt with on their own individual merits. However, it’s really interesting and helpful to read judgements such as this so that clients can continue to be guided through the process of Budget variation.
You can contact Melanie Pearson here.