Trial judges should not back budget overspends, says High Court

Trial judges should “not seek to trammel the costs judge’s jurisdiction” by giving an indication on whether the receiving party had good reason to depart from their budget, unless there are specific issues they want to raise, the High Court has said.

Mr Stephen Furst QC, a deputy High Court judge, was ruling in Car Giant Ltd and Anor v London Borough of Hammersmith and Fulham[2017] EWHC 464 (TCC). In the main ruling, he gave judgment in favour of the claimant for £179,125 plus interest in a claim for damages for dilapidations following the expiry of the defendant’s (LBHF) lease.

However, the claimant failed to beat the defendant’s part 36 offer and so has to pay the council’s costs from 7 May 2014.

LBHF has an approved costs budget of £110,000, but Mr Furst recorded that it has spent an extra £89,000, mainly on expert fees, but also trial preparation, trial and mediation. It sought an indication from the judge that these were reasonably incurred.

Mr Furst said: “In my view, while there are authorities showing that the courts can give such indications as are sought here, the court should be slow to do so.”

Noting that the circumstances in which a court should find ‘good reason’ to depart from the approved budget were likely to be considered by the Court of Appeal shortly in Merrix, he continued: “It is unclear whether the trial judge in making such comments should temper them in the light of CPR part 3.18 and, in any event, if such comments or observations are made as to what weight a costs judge would or should place on them.

“I can understand that there might be cases where the trial judge has a particular view of costs or on an aspect of costs, having conducted the trial or where he has had to decide an issue which is directly relevant to the assessment of costs.

“Absent such circumstances, it would seem to me that a court should not seek to trammel the costs judge’s jurisdiction, particularly where the costs judge has much greater experience of such matters than I have.”

In this case, the judge said, there was nothing in the nature of the applications to exceed the costs budget which could not be explained “equally well” to the costs judge and so he declined to give any indication.


This post was posted in ACL e-Bulletin

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Costs News
Published date
31 Mar 2017

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