Sharp v Blank and others [2017] EWHC 3390 (Ch) 

In Sharp v Blank and others [2017] EWHC 3390 (Ch) Chief Master Marsh provided some helpful guidance on revising cost budgets and what constitutes a “significant development”.

Approximately 5,800 Claimants are bringing an action against former directors of TSB and Lloyds.  The Trial is underway having commenced on the 9th October 2017. It is due to conclude on the 2nd March 2018.

The Claimants originally sought an order for costs budgeting. Costs were budged by agreement.  The Defendants subsequently sought revision of their budget, arguing that there had been significant developments in the case. The Claimants objected on a number of grounds including an argument that the matter was best left to assessment; that a Court could not retrospectively budget for costs that had been incurred and that the developments in the case were not significant.

Amendments were made to the costs management rules with effect from 6 April 2017, with a view to clarifying what were incurred and budgeted costs and this is one of the first cases to consider whether, following those amendments, the Court has the power to approve costs that have been incurred between the date of the original agreed or approved budget, and the date of the revision approval hearing. The Master held that the Court had jurisdiction, when revising a budget under PD 3E.7.6, to do so taking the last agreed or approved budget as the base reference point. Where budgets were directed to be prepared to an antecedent date, the relevant date was the date set by the Court. In reaching his decision, the master preferred a pragmatic approach over a literal reading of PD 3E.7.4 and PD 3E.7.6, accepting that “some degree of retrospectivity is inevitable if the costs management regime is to be made to work.” He further commented that “Costs which have been incurred since the date of the last agreed or approved budget (or the antecedent date) that relate to significant developments are, for the purposes of revision, placed in the estimated columns of the revised Precedent H in one or more phase.”

The judgment also offers judicial guidance on whether interim applications may be a significant development in the litigation and capable of being subject to a revision under PD 3E.7.6, even though PD 3E.7.9 expressly provides that interim applications are to be treated as outside of the approved budgets. The Master considered that the two provisions were not mutually exclusive and that both interim applications, and the consequences that flow from them, may be significant developments.

The case also offers further insight into what may qualify as a “significant development” for the purposes of PD 3E.7.6. The Master emphasised that each case ought to be assessed on its own facts and that factors such as the size, complexity and manner of unfolding of the litigation were all relevant, along with the likely additional costs that have been, or are expected to be, incurred. Here, an extension to the trial timetable by 48 days (almost doubling its length), substantial specific disclosure and service of a report by the Claimant from an expert that it was not anticipated the Claimant would instruct (and was therefore not budgeted for in either party’s agreed budgets) were all considered to be significant developments justifying revisions to the Defendant’s budget. However, the Defendant’s limited involvement in a third party disclosure application brought by the Claimant was not considered to be a significant development and the revision was not permitted. Likewise, the introduction of additional evidence by an expert after the joint expert meeting had taken place was also not considered to be a significant development in the context of this litigation. The Master was of the view that the adjustment to the evidence was “modest” and could therefore not be described as “significant” and as a result this revision was refused.


Jessica Wiggins