Claimant’s “unrealistic” budget led to “polarised approach” that prevented agreement on the figures
A party that “resolutely proceeds to a separately listed costs management hearing with an overly ambitious budget” should not readily assume there will be no costs consequences of doing so, a High Court master has warned.
Master Thornett ordered that the claimant in Worcester v Hopley [2024] EWHC 2181 (KB) should pay the costs of a hearing to determine the costs of the costs management conference (CMC).
He said the claimant’s “unrealistic” costs budget led to a “polarised approach between the parties on budgeting” that prevented agreement. The budget was “unreasonable and unrealistic in terms of proportionality”.
The High Court heard that Nicholas Worcester brought a clinical negligence claim through his wife and litigation friend Dominique Worcester against Dr Philip Hopley, regarding the treatment of Mr Worcester’s mental health during October 2014.
Proceedings were issued in April 2023, with the defendant denying liability in full. At a case management conference in April 2024, directions were given for a separate costs management hearing in May but with encouragement for the parties to negotiate and agree the budgets.
The defendant’s was agreed but the claimant’s was not, and at the hearing the master cut the budget from £342,263 to £159,600.
Master Thornett disagreed with the submission that CPR 44.2 was not readily suited to justify a specific costs order if the circumstances of a particular case justified it.
“Especially when, as here, the court had listed a separate hearing for the exclusive purpose of costs management, with an expectation that the intervening period provided should prompt the parties to reconsider their respective positions.
“The notion that because costs management is necessarily interwoven with the process of case management then both should be treated as within an enveloped whole, during which process the court should always adopt a holistic ‘in the case’ approach, substantially overlooks the wide discretion the court has on costs and the factors listed in rule 44.2 to be taken into account when deciding costs.
“In short, a party that resolutely proceeds to a separately listed costs management hearing with an overly ambitious budget should not readily assume that the court will be willing to see both its time and resources and those of opposing parties’ engaged without any potential consequence in costs.”
He said the claimant’s solicitors, Stewarts, practised from a London EC4A address and sought to justify rates ranging from £195 for a paralegal to £555 for a partner.
“By far the most substantial financial element in each phase of estimated costs reflected the proposition that the work would be principally carried out by a partner” and there was “little if any structured delegation” to more junior lawyers.
Master Thornett said he was “not at all persuaded” that the budgeting process was, as the claimant submitted, entirely routine and not out of the ordinary “because the issues in contention typically touched upon hourly rates being said to be too high, proposed time excessive and the use of two counsel in conjunction with work at partnerial level disproportionate”.
He added: “Whilst I agree that these considerations in themselves may well often be routine and ordinary in such hearings, the figures in question and the time and attention that had to be attended to them in this particular case marks a distinction.”
Parties must be prepared to “account for not just what work justifies their estimated costs but why the figure claimed is also proportionate”.
Master Thornett said: “The overall impression and conclusion I reached was that the claimant’s Precedent H was unreasonable and unrealistic in terms of proportionality.
“It led to a polarised approach between the parties on budgeting that had prevented settlement and so necessitated a separate hearing proceeding that either might have been vacated or, even if not, should have followed a more conventional process of modest arithmetical adjustment and modification, rather than fundamental deconstruction of the claimant’s proposals and as led to sizeable reductions.”
He ordered no costs for the CMC, saying the claimant should see “as a benefit” the fact that the defendant did not seek an order for it, but said the claimant should pay the defendant’s costs of the July hearing.
Finally, the master said the element to which the claimant increased his preparation for costs management by adopting figures that did not find favour with the court was not easy to assess, if it should be recognised in principle.
“One might argue that lower figures would have made no difference in terms of the preparation and hence costs of cost management. That said, taken as whole, both the claimant’s original and revised Precedent H forms evidence a more elaborate approach than might have been adopted and so I infer a process of additional formulation the defendant ought not come to pay for. I reduce the claimant’s costs management costs (such as may come to be assessed) by 15%.”
Robin Dunne (instructed by Stewarts) for the claimant. David Arnot (instructed by Clyde & Co) for the defendant.