Precedent H- A little Clarification

PI_John_Morris_Collins By John Collins

1.Whatever your opinion of the utility of precedent H budgeting, I fear that it is here to stay.  It is therefore important to try to make it work so as to minimise the problems for yourself that it creates.

2.The first point for those dealing with personal injury cases is that the majority of such cases, even in the multi-track, should not involve costs in excess of £25,000.  One can therefore save oneself a great deal of trouble involved in breaking down and analysing the various items on the first page of precedent H in subsequent pages by simply keeping the bill down to £25,000.  One obvious way is to avoid putting anything unnecessary in the contingencies section.  Useful guidance to anyone concerned with preparation of  precedent H budgets is given in the latter part of a recent judgment by Warby J in Yeo v Times Newspapers Ltd (no. 2) [2015] 1WLR 3031.  Although that was a case of a claim for libel by an MP, the comments by Warby J are intended to apply to all sorts of claims in  multi-track cases.

  1. Dealing with contingencies, the judge made three important points:

(1) You must not put in a contingency work which falls within any of the main categories on precedent H.  If, for instance, it is anticipated there is going to be a dispute about disclosure, that is something which has to be taken into account in the disclosure section of the budget, not as a contingency, even if it is an anticipated application for specific disclosure of certain items.

(2)  In order for the item of work to qualify as a contingency it must be possible to identify to the opposite party and to the Court what that work will be.  It is not permissible to include as a contingency, a generalised and vague term such as “possible future work not included above”.

(3)  Warby J rejected the submission of counsel that the test whether work should be included as a contingency was whether it was “reasonably likely” at the time of approval of the budget.  He said that the test must be that it was foreseen as more likely than not that the work would be required.  This is very important.  It is no good including as a contingency ADR, when one’s client has already expressed an adamant determination to take the matter to trial.  Of course, it is possible, even in the most unlikely cases, that the client may change his or her mind, so that it is possible that one might have a contingency of that kind.  However, what is a mere possibility must not be included as a contingency.  There is the power, if, for instance, there is an unexpected interim application, or a wholly unexpected mediation, for the costs to be added to the budget pursuant to PD3E, para 7.9.

  1. It is worth while taking care over the budget, because it undoubtedly has an impact upon any future assessment of costs. This is not generally appreciated and indeed a District Judge told me that there was no real point in objecting to what appeared to me to be wholly excessive charges by a solicitor on a particular section, because the whole matter would be subject to assessment when the case was all over.  That is not in my opinion the correct way of looking at matters.  Once a costs management order is made, involving either an agreed or an approved budget, the receiving party under the order for costs on the standard basis is entitled to treat the costs order as the starting point for assessment of costs.  By CPR3 r.18, the Court in assessing costs has to have regard to any such approved or agreed budget and not depart from it unless it is satisfied that there is good reason to do so.  In other words, whilst it is true that the Court on assessing costs after the case is over has the power to disregard the costs approved in a Costs Management Order and fix a different figure for those costs, the burden is very much on the person who wishes to displace the presumption that the Costs Management Order has fixed the costs from the point of view of assessment.  The costs assessor retains his discretion, but unless one can demonstrate quite clearly that there is gross over-charging or the like, a challenge to the costs demand at that stage is going to be quite difficult.  Of course, it may well be that as the assessors come to their own conclusions about the budgeted costs, they will determinedly exercise a discretion in order to stop over- charging.  One can but hope that will be so, but if that becomes a general practice, once again a question may well be raised as to what is the real purpose of having costs budgeting at all.
  2. I would point out that there are provisions to enable the solicitor who is drawing up his costs budget to spend some time considering the matter carefully.  There are charges permitted of between 1% and 3% of the budget total to allow for this.  It is vitally important for the solicitor in any of those circumstances to sit down and work and consider from his or her experience and from any advice he or she receives from counsel what steps are going to be necessary, what advice is going to have to be taken, what witnesses have to be called, what experts have to be instructed and what it is likely to cost in time spent.  It is then important that those considerations should be reflected in the various categories set out on the precedent H.  If, for instance, it is intended that counsel should attend on the CMC, there must be provision there and not in some other column for his or her remuneration.  The trial preparation may well include obtaining the last advice form counsel and it is arguable whether the counsel’s skeleton argument will be included in the trial preparation or the trial, but undoubtedly it is better to come to a  conclusion as to such matters in advance and put them in the correct category.
  3. Lastly, it is hoped all concerned will bear in mind that, as Warby J pointed out, CPR r.3.16 (2) provides that costs management conferences should be conducted by telephone or in writing. Accordingly, particularly in cases where one or other party or their advocates may have to travel a substantial distance to attend personally at a CMC, it is to be hoped that increasingly the District Judges will direct that the precedent H forms should be served on the respective parties well before the CMC with a view to their being agreed or, whether there is disagreement, the points of disagreement are put in writing,  so that they can be resolved by the District Judge in writing without the parties attending or alternatively by a telephone conference.
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3 comments

  1. […] John Collins clarified some points and gave us guidance on the use of Precedent H in Precedent H – A Little Clarification […]

  2. […] Collins clarified some points and gave us guidance on the use of Precedent H in Precedent H – A Little Clarification (July […]

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