Yirenkyi v Ministry of Defence EWHC 3102 (QB)
This recent case concerned the approach taken to cost budgeting and the making of an Order at a Costs & Case Management Order.
The Claimant had made a claim for personal injury against the Defendant and the matter proceeded to a Costs & Case Management Conference on 3rd May 2018 before Master Davison. The Master approached his approval of the Cost Budgets by allowing a number of specific hours by various fee earners of different grades and approved various detailed figures for disbursements, to include expert and Counsel fees, rather than approving a composite figure for each phase of the hearing. The Master’s approach was challenged by the Claimant during the hearing and the Master explained that this was his usual approach to cost budgeting. In respect of the parties Cost Budgets, the Master included at paragraph 19 of the Costs & Case Management Order ‘’Save that the parties reserve their positions as to incurred costs and as to hourly rates, the Master approved the budgets subject to the proviso that it remained open to them to dispute those matters (and to that extent the figure for each phase) at a detailed assessment, the claimant’s cost budget is approved in the total sum of £206,669.72 and the defendant’s cost budget is approved in the total sum of £100,639.”
The Claimant appealed the Order an argued that the Master should not have approved the budget subject to a debate at a later stage as to hourly rates and also the approach the Master took by approving the various hours at difference grades and disbursements, rather than providing a composite figure to work within, was not correct.
The Claimant submitted on appeal that the Master’s approach was contrary to the Practice Direction to CPR Part 3. More specifically CPR 3.15(2)(b) and Practice Direction 3E paragraphs 7.3 and 7.10, which the Claimant submitted indicated that the figure to be approved would be final rather than provisional. The Master’s approach therefore meant that there was no certainty as to what the approved budget was.
Mr Justice Jacobs heard the appeal and agreed that the ultimate aim of the cost budgeting exercise was that both the receiving and the paying party know the figure is fixed and cannot be changed absent good reason. That also has a knock-on advantage in that since the parties know where they stand at the start, it increases the probability that a detailed assessment with all its complexity and possible cost is avoided.
Mr Justice Jacobs also agreed that it was wrong to approve the budget by reference to constituent parts and in accordance with paragraph 7.3 of Practice Direction 3E, the figures should be given, for each phase of the proceedings, which fall within the range of reasonable and proportionate costs. Therefore the Master’s approach removed the flexibility of the party in deciding how to spend the budget in the light of the way the case developed.
Mr Justice Jacobs ultimately decided that the Master’s decision could not stand and Paragraphs 19 and 20 of the Order should be set side with further cost management being dispensed with.