Asghar v Bhatti
Queen’s Bench Division

A surprising decision to allow updates to be made to a court fees only cost budget where a ‘significant development’ had occurred….

Currently the position outlined within the CPR is that Court fees only will be allowed if a Cost Budget is not filed or is filed out of time.  This is a harsh penalty for the defaulting party and serves as a major incentive to ensure the cost management process is taken seriously and approached appropriately.

In this matter the First Defendant was a solicitor and the Second Defendant the firm. The Claimants had alleged that they had been induced to pay money to the Defendants when purchasing two properties.

The trial was originally estimated to last six days, but at cost management stage the Claimants failed to file a costs budget. The Claimant lodged the appropriate Application for Relief from Sanction however this failed at the subsequent hearing.  In October 2015 the Court made the Order that the Claimant would be entitled to only the recovery of the applicable court fees as a result, pursuant to CPR 3.14.

As the litigation developed it became clear and indeed was agreed between the parties that the trial was likely to require a 12 day listing rather than the 6 day listing which had originally been outlined within the directions and budgeted for by the Defendant.  Both parties amended their budgets and these were filed at Court.

The question was raised by the Defendant as to if it was possible for the Claimant to revise their budget to include the costs of the additional work which had not been accounted for when the Order was made in October 2015 (i.e. to include the costs of the additional 6 days of trial on top of the Court fees only budget that had been approved by the Court previously). The revisions to the budget had been made on the basis that it included costs that were not considered at the time the original budgets were filed and this was a significant development in the litigation to warrant such an update.

The Defendant submitted that the Order from October 2015 would still have been made in those terms (Court fees only as a result of the failure of the Claimant to file a budget) even if it had been known at that point that the matter was to proceed to a 12 day trial, and as such argued that no additional costs should be allowed other than the Court fees previously noted.  The Claimant had breached the rules and been denied relief from sanction; to allow further costs to be included would undermine the previous Order.

The Master firstly noted that the additional days of trial were a significant development. The Master further held that the theoretical situation the Defendant had presented as to the knowledge of trial length at the time the original budgets were filed was irrelevant.

The Master therefore allowed the updates to be made to the Claimant’s budget but limited this to a further six days of trial rather than including the full 12 days.  It was noted that to allow the full 12 days would have been an error in law and could have been considered a reversal of the Order of October 2015.

The issue therefore appears to fall once again to the question of what will constitute a ‘significant development’ within the proceedings such that amended costs budgets will be permitted.  In this case the increase in trial length would have left a substantial burden on the Claimant’s solicitors on top of that already resulting from the award of a Court fees only budget at the previous cost management stage.  This case suggests that in such a situation there may be hope of securing some additional costs if ‘significant’ later developments do occur but this is not a widely tested theory and is likely to be met with strong opposition.