Gray -v- Commissioner of Police for the Metropolis
Costs budgeting has been around for over six years now, but appeal decisions on the allowances made by Judges during this process are few and far between. A recent case of Gray -v- Commissioner of Police for the Metropolis dealt with the extent to which an offer made by the opposing party binds the Court when costs budgeting, as well as challenging the discretion exercised by the Judge in reaching her decisions on each phase of the budget.
The Costs and Case Management Hearing
The matter came before HHJ Baucher at the Central London County Court to approve the costs budgets prepared. The Defendant’s costs budget had been agreed at £44,301 prior to the hearing.
The Claimant’s budget sought £91,427 in respect of future costs only. Some sums had been agreed prior to the hearing, however the Witness Statements, Trial Preparation and Trial phases remained in dispute.
As is customary, the Defendant had made offers in respect of each phase of the budget, which resulted in a global offer of £40,494. HHJ Baucher allowed £44,140 in respect of future costs. For the witness statements phase in particular, the sum sought was £9,060, to which the Defendant had made an offer of £5,250. HHJ Baucher recorded that the Defendant had made this offer, but stated she had to bear in mind proportionality and therefore only allowed £4,000.
The Claimant recognised that the Court was exercising its case and costs management powers and, as such, the threshold for interfering with the decision under CPR 52.21(3) was a high one. However, the Claimant contended that the Judge had made a number of errors of principle, which lead to the conclusion that the approved budget was simply too low to enable the claim to be pursued.
The Claimant argued the Judge placed too much emphasis upon the low value of the claim and failed to take into account, or place sufficient weight upon, various other aspects of the case, such as the intrinsic complexity of civil actions against the police; the number of details of the incident which were in issue; the difficulties the Claimant’s solicitors would have in taking the Claimant’s instructions given his mental health issues; the sheer volume of material which would have to be considered; and the need to ensure that in terms of the number of hours of legal preparation there should be equality between the parties.
Having considered the transcript, Mrs Justice Lambert did not find that the Judge had made any error of law. She noted numerous references to the Judge considering other factors than the value of the claim when considering proportionality.
Further, Mrs Justice Lambert did not find that the amounts allowed were manifestly too low or that the result of the budget was that the litigation was no longer economic to pursue. In respect of the offer for witness statements being lower than that offered by the Defendant, Mrs Justice Lambert stated:
“I find that the Judge was not required to spell out why the figure which she allowed for witness statements was less than the figure offered by the Defendant. The reason is obvious: the figure offered by the Defendant was not the proportionate figure. It goes without saying that, if a Defendant (or any party) makes an offer, that offer does not become the benchmark below which the cost cannot be budgeted.”
The appeal was, therefore, refused.
In light of this decision, parties should be alert to the fact that the figures offered by another party in respect of their costs budget are not the minimum recoverable figures. This case also highlights the difficulties in overturning a Judge’s discretionary decision.
With that in mind, it is vital that the person instructed to defend your costs budget fully understands the case and work required to be done in each phase of the budget, to achieve the best possible outcome.
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