'Extremely difficult' to persuade courts to revise costs budgets

Mr Justice Coulson has warned that in ordinary cases it will be "extremely difficult" to persuade a court that "inadequacies or mistakes in the preparation of a costs budget, which is then approved by the court, should be subsequently revised or rectified".

Delivering judgment at the Technology and Construction Court, which has been participating in the costs management pilot, Coulson J said: "The courts will expect parties to undertake the costs budgeting exercise properly first time around, and will be slow to revise approved budgets merely because, after the event, it is said that particular items had been omitted or undervalued.

"I also agree that any other approach could make a nonsense of the whole costs management regime."

Ruling in Murray and another v Neil Dowlman Architecture [2013] EWHC 872 (TCC), Coulson J said the case raised the question of the circumstances in which a costs budget, approved by the court, could be subsequently revised or rectified.

Coulson J said the claimant failed to tick a box on Form HB, the costs budget form, indicating that success fees and ATE premiums had been excluded.

The judge said he was "uncomfortable" with the idea that claimants should be penalised for failing to tick a box and the new form, Precedent H, in use from 1 April 2013, excluded success fees and premiums automatically.

Mr Justice Coulson said the defendant had "known throughout about the success fees and ATE premiums" and cannot be said to have been misled or confused.

However, he said the absence of prejudice alone would be not enough to justify revision of a costs budget.

"The whole basis of the recent amendments to the CPR is the emphasis on the need for parties to comply with the CPR, and the court orders made under it.

"It will, I think, no longer be possible in the ordinary case for parties to avoid the consequences of their own mistakes simply by saying that the other side has not suffered any prejudice as a result."

However, Mr Justice Coulson ruled that on the "particular and unusual facts of the case" it would be in accordance with the overriding objective if the approved budget was rectified.

A spokesman for CMS Cameron McKenna, which acted for the defendant, said: "The case highlights the importance for parties of submitting an accurate and realistic cost budget to the court in advance of the first case management conference."