It would be wrong to look for “detailed and nuanced reasons” for a judge’s decisions on budgeting during a relatively informal costs and case management hearing that lasted 20 minutes, the High Court ruled.
Mrs Justice Lambert said reasons would often be expressed “in shorthand form”.
The underlying claim in Gray v Commissioner of Police for the Metropolis  EWHC 1780 (QB) was over an allegedly unlawful arrest and at its heart was a “stark factual dispute”. It was to be a jury trial with a time estimate of five days.
The defendant’s costs budget of £44,301, including incurred costs, was agreed before the hearing. The claimant sought £91,427 in future costs only and, although some of the budget was agreed, the sums for the preparation of witness statements, trial preparation and trial costs remained in dispute.
The defendant made discrete offers in respect of the disputed items and a global offer of £40,494. Her Honour Judge Baucher allowed £44,140 in respect of future costs which, when incurred costs were added, produced a total of £68,600.
The claimant was allowed £4,000 on witness statements, having sought £9,060; £7,000 on trial preparation, having claimed £21,890; and £19,000 for the trial, having sought £31,600.
On appeal, the claimant argued that the judge failed to address proportionality lawfully, placing far too much weight upon the low value of the claim (£10-15,000), but did not take into account the importance of the case beyond its value to both sides, its complexity and the amount of work involved in preparing for trial and running the trial. Among other arguments, he also said the sums budgeted were manifestly too low.
Lambert J noted: “The costs and case management hearing lasted 20 minutes. From the transcript, it is apparent that it was a relatively informal and discursive hearing. It was conducted briskly and efficiently, with the judge making a series of decisions as the hearing progressed…
“Her reasons were short, often a few sentences only. The parties inform me that the way in which the hearing was conducted was typical for a costs and case management hearing for understandable reasons: finite court resources do not permit detailed judicial pre-reading, lengthy hearings or reserved or delayed judgments.
“It follows, I find, that in hearings of this type, not only is it necessary to look at the transcript as a whole for the judge’s reasons, but it would be wrong for me to look for detailed and nuanced reasons for the judge’s decisions. It is to be expected that reasons will often be expressed in shorthand form.”
On a preliminary point, Lambert J also said the sums claimed and allowed in respect of each of the three phases of the litigation “should not be looked at in a compartmentalised way, otherwise costs may be duplicated”.
The judge reminded herself too that HHJ Baucher “was not only entitled, but obliged, to take into account that the claim was of relatively low value”, and also found she was “entitled to conclude that the issues for trial were relatively straightforward”.
Lambert J found the circuit judge “clearly did take into account the value of the claim but, in her short reasons, she also referred to other factors… Although the judge’s reasoning was not detailed, I find that she took into account, albeit briefly, the relevant elements of the proportionality judgement required under CPR 44.3(5)”.
She continued: “I do not find that the judge’s reasoning was flawed or that the sum allowed was manifestly too low. By the time of drafting witness statements, the claimant’s solicitors would already have a reasonably detailed proof of evidence for the purpose of drafting the pleadings and for the evaluation of the merits of the claim needed for public funding.
“Also, a substantial sum had already been incurred in connection with disclosure… Closer scrutiny of the disclosure lists… reveals that a very large number of the documents that were disclosed were, in fact, common to both parties.”
On the heavy reduction of the sum for trial preparation, Lambert J said: “The claimant’s budget sought the costs of 70 hours of solicitor’s time for the production of the various bundles for trial and for liaising with counsel, the claimant and the court. This number of hours, or anything like it, is impossible to justify. Nor, given the involvement of counsel in earlier phases, is it easy to see how the hours claimed for counsel’s trial preparation could easily be justified.”
Lambert J concluded: “Overall, therefore, I do not find that the transcript of the hearing reveals that the judge has made any error of law. I do not find that she adopted an impermissible and distorted approach to the proportionality assessment under CPR 44.3(5). There is nothing in the transcript which suggests to me that she did not have in mind the fact that this case was a case of considerable importance to both parties notwithstanding its value…
“Nor are comparisons between the parties’ budgets based upon the number of hours of work which might be produced by applying different hourly rates, determinative or even particularly relevant. Under CPR 3EPD.4 at paragraph 7.3, the judge is not required, in reviewing the budget, to analyse the detail of the costs sought by reference to its constituent elements and, at paragraph 7.10, it is made plain that the court’s function at the budgeting hearing is not to approve or disapprove hourly rates.
“The judge correctly observed that how the sums allocated to various phases were to be spent was not a matter for her. All that she was required to do was to assess whether the budgeted costs fell within a reasonable range.”
She accepted that HHJ Baucher’s figures were low, “and perhaps lower than those which would have been allowed by other judges (including me)”. But that was not the test.
“The claimant’s legal team will need to conduct the litigation efficiently. There will need to be a clear demarcation between counsel and solicitor to ensure that there is no duplication of work, particularly in relation to trial preparation.
“But I do not accept that the claimant will be unable to instruct competent counsel within the budget or that the sum budgeted was so low as to prevent the litigation from being pursued.”
M Westgate QC (instructed by Hodge Jones and Allen) appeared for the claimant, and G Thomas, (instructed by Weightmans) for the defendant.