News in brief 1 June 2017

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‘Courts fees only’ budget can be revised, High Court rules

A party that fails to file a costs budget and is restricted to a budget comprising just the applicable court fees can apply to revise the budget to deal with additional costs not anticipated at the time of the original order, the High Court has ruled.

According to a Lawtel report, Asgar and Anor v Bhatti and Anor concerned a claim that the defendant solicitor and his firm had induced the claimants to pay them money when purchasing two properties.

The claimants failed to file a costs budget. Under rule 3.14, they were treated as having filed a budget comprising only the applicable court fees.

It later transpired that the trial was likely to last twice the estimated six days. The master allowed the claimants to revise their costs budget to include costs for the additional work not anticipated at the time of the budget order as this was a ‘significant development’. In the event, the matter was settled on the second day of the trial.

Dismissing the defendants’ appeal, Mr Justice Lewis found that the master had been entitled to find that preparation for an extra six days of trial was capable of being a significant development and that it was appropriate to review the costs budget.

The Lawtel report said: “The defendants maintained that the October 2015 order would still have been made even if it was known at that time that the trial was likely to last 12 days. However, the question was not what might hypothetically have been ordered in October 2015 but whether, given the way that matters had proceeded, it had been open to the master to allow the variation in the costs budget; it had been.”


“Extraordinary” costs bill in RBS litigation

The judge in charge of the RBS rights issue litigation has outlined his “very great concern” about the “extraordinary” costs racked up by the bank, which are currently estimated at £129m.

Mr Justice Hildyard made the comments earlier this month when dealing with an application by RBS for £11.6m in security for costs against two funders backing the last remaining group of claimants, the other four groups having settled in December.

The trial was due to start on 22 May but has been delayed due to settlement negotiations.

In his ruling, the judge said: “As I indicated at the hearing, the extraordinary (indeed, in my experience, unparalleled) amount of the costs apparently incurred in this litigation by, in particular, the defendants has in the past caused me, and continues to cause me, very great concern.”

The security for costs application was made after it became apparent that the after-the-event (ATE) insurance the SG Claimants had in place was insufficient. The judge speculated that “the sheer size of the defendants’ costs” had made obtaining comprehensive ATE cover “difficult, if not impossible”.

He continued: “As to the latter, the magnitude of the costs, the excess over the already huge estimates originally given, the approach of the defendants as exemplified by the instruction of no less than 13 counsel in addition to serried ranks of solicitors and paralegals (probably over 20) contributing to a present overall estimate of costs on the defendants’ side of nearly £129 million, must be a prohibitive context in which to seek adverse costs insurance.

“It is the lack of ATE cover which to a large extent has justified the application in the first place; and the revelation of it which has coloured my approach. It is important to guard against oppressing the remaining SG Claimants or their funders by making them pay for a problem that in part at least may be the consequence of what may be shown in the end to be disproportionate expenditure by the defendants.

“At the same time, however, it is obviously right to bear in mind that this remains a very complex and large case, though much reduced in scope and size since its review after the December settlements. The nearly 1,000 pages of skeleton arguments that I have recently received as pre-reading for trial illustrate this.”

This post was posted in ACL e-Bulletin, Latest News

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Costs News
Published date
15 Jun 2017

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