The recent case of Vertannes v United Lincolnshire Hospitals NHS Trust deals with the Claimant’s Bill of Cost being drafted in the incorrect format following an approved Cost Management Order (CMO).
A CMO was made on the 9th April 2015. Following developments within the case further Orders were made by the court in relation to re-drafting cost budgets with a view to assessing the same and potentially a new CMO. Whilst new budgets were drafted and submitted, the case never progressed to a further Cost Management Conference and therefore no new CMO was made prior to the conclusion of the substantive claim.
When the Claimant submitted their Bill of Costs, they presented it in an un-phased format as they submitted the existing CMO no longer reflected the cost management in the matter.
This was challenged by the Defendant who argued that at no time had the original CMO been set aside or superseded. The Defendant went on to argue that all the criteria were met in relation to the costs being assessed and in accordance with the rules the bill must be drafted in the correct format, i.e. split into phases.
The Claimant argued that the original budget had “lost relevance” and following subsequent Orders from the Court it was inferred that a new CMO was intended. Accordingly, re-drafting the Claimant’s Bill of Costs would be of no benefit to the assessment process.
On review Master Nagalungam found that at no stage did any of the Court Orders specifically indicate that the original budget was set aside or superseded.
Further, the Master advised that – for a CMO to be superseded, a new CMO must take its place.
“I reiterate that for a costs management order to be superseded, a new cost management order must take its place….I further reiterate that for a costs management order to be set aside that must be in explicit terms. An order cannot be deemed to be set aside by inference”.
“In any case where a costs management order has been made it is not unusual for developments to occur which were unforeseen or unplanned. The fact of any such developments of itself does not render the costs management order redundant (or superseded)”.
CPR rule 1.1(2)(d) requires the court to ensure cases are dealt with expeditiously and fairly. Fairness in this context demands that the index case is treated no differently from any other case subject to a costs management order.
The Court Ordered that on the basis that the CMO had not been accounted for, the Bill was invalid. As a result the Bill totalling nearly 1 million pounds is now required to be redrafted in accordance with upholding the cost budgeting regime. Costs have been reserved however it is entirely possible that the defaulting party will be landed with considerable costs consequences as a result.