The decision just handed down in Woolley v Ministry of Justice [2024] EWHC 304 (KB) (16 February 2024) appears to me unusual in that I cannot recall another decision in which the amounts awarded by a Judge in respect of future costs have been successfully challenged (or as in this case referred back to the County Court for determination afresh in their entirety by a different Judge). The rarity of a decision of this type, and the reasons given for the successful appeal are instructive both as to the principles which guide Costs Management and the approach which parties should take in best presenting their budgets to the Court at CCMC hearings.
When Costs Budgeting was still in its relative infancy an appeal was made against the budgeted costs approved by a District Judge on Costs Management in the case of Havenga v Gateshead NHS Foundation Trust [2014] EWHC B25 (QB) (26 November 2014) . The appellate court sent a clear message about the discretionary nature of Costs Management in dismissing the appeal.
“It follows that if I were in a position to undertake costs budgeting, de novo, in relation to three of the four grounds of appeal, I would have allowed more solicitor time than the District Judge. But it is not the role of the appellate court to tinker with costs budgets”….
“At all events, I have come very firmly to the conclusion that the overall budget as revised by the District Judge was well within the range of his discretion and that the budget itself is both reasonable and proportionate. The fact that I might have been a little more generous does not mean that the decision of the District Judge fell outside his wide ambit of discretion, far less that it was wrong.”
The principle was therefore established in respect of Costs Management, along long-standing principles, that a Judge making a case management decision has a wide ambit of discretion and it is not for parties to mount appeals against such decisions simply to try and obtain an outcome that they may prefer for any reason.
The reasons given for the successful appeal in Woolley are different. In this case Mr Justice Kerr has granted the appeal on the basis of a “procedural or other irregularity”, that of the Judge at first instance, HHJ Baucher, “closing her mind to a relevant consideration and not entertaining argument on it.”. In this case the principal argument which the Judge refused to hear the Claimant’s advocate on was a comparison between the Claimant’s budget and the (already agreed) budget of the Defendant. The transcript of the hearing is attached to the Judgement, and the general nature of the exchanges and the speed with which issues are canvassed and extempore Judgement given will perhaps be not unfamiliar to advocates with experience of dealing with costs management after the directions element of the CCMC has concluded, with time limited and towards the end of a day in which the Judge has had a busy list.
Aside from the pure legal ground of the appeal, which is tightly defined to the particular circumstances of the CCMC hearing in that case, there are some interesting elements to the decision in Woolley which bear out my extensive experience of conducting the costs elements of CCMC’s.
Firstly a comparison with your opponent’s budget in any phase, although often of little use can be an important tool and is something a Court can bear in mind as informative. As para 40 of the Judgement shows the Court should be aware of the differential bases on which Claimants and Defendants budget for hearings in Personal Injury matters
“A defendant may budget on the low side in a personal injury claim knowing that it is unlikely (because of qualified one way costs shifting) to recover its costs even if successful in defending the claim, in the hope of exerting a downward pull on the claimant’s budget. Conversely, a claimant may have little incentive to challenge the amount of the defendant’s budget, knowing that the claimant is unlikely to have to pay the defendant’s costs even if the claim fails and preferring to use the size of the defendant’s budget to make the claimant’s appear the more respectable.”
This on the face of it appears to suggest a Court should treat comparisons with caution, but equally I would argue that this common disparity, which has a good reason, does mean that in phases where there is a close connection between the parties budgets, in total amounts or possibly even in hours proposed to be spent, perhaps that close correlation can be persuasive. Particularly where, as in this case, a Defendant is arguing in a Precedent R that a Claimant should have less input in a particular phase than they themselves have sought in their own budget, even where that budget is agreed.
Finally, what is clear from the transcript, and Mr Justice Kerr’s detailed commentary on it, is that it is important that when presenting your case in respect of the budget in the costs management element of the hearing that advocates, especially those specialising in costs who may be more used to Detailed Assessment need to keep submissions, short, to the point, steer away from lengthy expositions on rules and procedure (as is stated in Woolley when extempore Judgements are given “The rules need not be referred to; the judges know them and, absent any contrary indication, are taken to apply them.”) and make sure you provide the Court with all the information it needs as to the practical issues and facts of your particular case which justify the amounts of costs you seek.
Written by Paul Kay, Head of Costs Budgeting
dd: 01480 220819 e: paul.kay@rcostings.co.uk