Gavel on sounding blockThe High Court has approved a substantial increase in a costs budget after a ‘significant development’ in the case.  The move has been welcomed by costs lawyers as it shows that the courts are willing to be flexible on budgets.  Previously some solicitors have been reluctant to submit revised budgets, even when unexpected extra work has been incurred.

The budget related to a liability claim against The Cumberland Hotel.  It followed an attack in the hotel, which left three members of the same family seriously injured.

The claimants solicitors had set their disclosure costs budget at £62,626.  At the time they were expecting to review somewhere between 1,000 and 1,500 documents.  In fact, over 3,250 documents were disclosed, incurring a significant extra time commitment by solicitors to review the files.  The firm applied for an increase in its costs budget of 78% to £112,000; much of this related to solicitors’ time, with the budget for counsel also doubling and the figure for experts fees increasing eightfold.

In court, the Queen’s Bench master accepted the cost increase for solicitors’ and counsel’s time but rejected the increase in the budget for experts.  Master Davison accepted that an unforeseeable ‘significant development’ in a case could lead to an increase in the costs budget.

As a matter of policy, it seems to me that the bar for what constitutes a significant development should not be set too high because, otherwise, parties preparing a budget would always err on the side of caution by making over-generous assessments of what was to be anticipated,” said Davison.

James Burgoyne, Director – Claims & Technical, Brunel Professions welcomed the Master’s underlying reasoning.  “From a liability claims defence point of view, the headline decision to allow an increase in the costs budget isn’t something we can be enthusiastic about. However the need for some flexibility to take into account unforeseen circumstances is reasonable, and the concern to discourage otherwise inflated initial budgets is laudable.

Reports about the development have been published by Litigation Futures, Civil Litigation Brief, the Association of Costs Lawyers and Law Society Gazette.

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