A case in which agreed elements of a budget were not approved at the Cost Management Conference
The purpose of cost budgeting is ultimately to ensure the proportionate cost of litigation, through the active involvement of the court.
After cost budgets are exchanged it is often the case that parties will make efforts to attempt to agree as much of the costs therein as possible. The benefits of doing so are clear, firstly it saves time preparing for and at the Cost management conference itself. Secondly it allows the parties a degree of certainty going into the conference.
The ‘certainty’ I refer to however has limitations as shown by the case of Brown v BCA Trading. In this matter, despite costs budgets being agreed between the parties, some elements of the agreement were not approved by the court.
Specifically the Claimant’s total costs for Counsel were agreed between the parties at £445,000.00. This was considered by the court and despite the agreement between the parties was deemed too high with reference to the Defendant’s total Counsel fees of £287,000.00. The Claimant was asked to revisit these fees within the budget.
The Law
Paragraph 3.15.1 of the notes in the White Book explains:
“Rule 3.15(2) provides that, if the costs management order (“CMO”) is made, the court will then record the extent to which each party’s budget is agreed or is approved by the court. Accordingly, the court should decline to make a CMO for the time being if it wishes to urge the parties to reconsider their budgets, whether or not those budgets are agreed.”
Conclusion
It is important to highlight that while the agreed Counsel fees were not approved by the Court, many other agreements were approved as presented by the parties. As such pre cost management conference negotiations should still take place and it appears will still be persuasive to the Court a lot of the time.
It should however be borne in mind that following Brown v BCA Trading Limited the court may be more prepared to challenge the parties on agreements reached. It appears this is more likely if there is a considerable difference between the parties’ respective agreed figures so in such circumstances it would be wise to have submissions prepared to support the agreed figures.