RNB v London Borough of Newham
| Jurisdiction | England & Wales |
| Judge | Deputy Master Campbell |
| Judgment Date | 04 August 2017 |
| Judgment citation (vLex) | [2017] EWHC J0804-1 |
| Date | 04 August 2017 |
| Docket Number | Case No: C01CL127, SCCO Ref: CCD 1702513 |
| Court | Queen's Bench Division (Administrative Court) |
[2017] EWHC J0804-1
IN THE CENTRAL LONDON COUNTY COURT
SENIOR COURTS COSTS OFFICE
Thomas More Building,
Royal Courts of Justice, Strand,
London, WC2A 2LL
Deputy Master Campbell
Case No: C01CL127, SCCO Ref: CCD 1702513
Mr Ridgeway (instructed by Bolt Burdon Kemp) for the Claimant
Mr Clayton (instructed by Browne Jacobson) for the Defendant
Hearing date: 21 June 2017
Judgment Approved
Deputy Master Campbell, Costs Judge:
This judgment addresses the following issue which arose during the course of the detailed assessment of the Claimant's costs payable by the Defendant, pursuant to a Consent Order dated 4 January 2017: where the hourly expense rate claimed for costs incurred before the date of a Costs Management Order ("CMO") are reduced on detailed assessment ("the incurred costs") to what extent, if at all, should that reduction be reflected in the costs agreed between the parties or approved by the court for costs incurred after that date in the Claimant's costs budget ("the budgeted costs")?
It is the Defendant's case that the hourly rates allowed for the incurred costs should be applied to the Claimant's budgeted costs, thereby reducing the amount claimed in the bill below the sum agreed at £143,692.36 and reflected in a CMO made on 12 August 2016. For the Claimant, it is argued that the budget should be left untouched and that the rates allowed for the incurred costs should not apply to the budgeted costs.
It is common ground between the parties that the Defendant's submission can only succeed if it can satisfy the court that the reduction in the hourly rates claimed for the incurred costs is a "good reason" to depart from the figures in the Claimant's costs budget.
Background
The point arises in this way. The Claimant had suffered abuse as a teenager perpetrated by an employee of the Defendant when a resident in a home which it then operated.
So far as it impacts upon to the issue for decision, the following chronology is relevant:
• 16 July 2015 — Letter of claim;
• 29 October 2015 — Issue of proceedings;
• 2 February 2016 – Particulars of Claim and schedule of loss served
• 6 March 2016 — Defence served pleading a limitation point and putting the Claimant to proof of any allegations of abuse in respect of which the perpetrator had not been subject to a criminal conviction in the Crown Court;
• 25 July 2016 – Claimant's costs budget filed and served: Precedent H rates per hour stated to be – partner £355 to £375, senior solicitors £235 to £280, Associate £295, solicitors £215 to £225, legal assistants £145 to £150
• 3 August 2016 – Defendant's costs budget filed and served
• 12 August 2016 – Costs Case Management hearing ("CCMC"); Costs Management Order, inter alia that the Claimant's costs budget is agreed under CPR 3.17 in the sum of £143,692.36 and that the Defendant be deemed to have served a costs budget comprising only applicable court fees under CPR 3.14;
• 23 November 2016 – Defendant's Part 36 offer in the sum of £125,000
• 2 December 2016 – Claimant's Part 36 offer in the sum of £295,000
• 4 January 2017 — Consent Order settling the claim on terms that the Claimant receive damages of £250,000, plus costs to be assessed if not agreed;
• 8 May 2017 – Costs hearing listed for one and a half days commencing on 21 June 2017 in respect of the Claimant's bill of costs seeking £121,051.40; the Defendant's points of dispute take issue with the proportionality of the bill.
• 21 June 2017 — parties attend for detailed assessment; bill assessed: Hourly rates for partners reduced to £340: senior solicitors reduced to £275, solicitors reduced to £180 and legal assistants to £135: reserved decision on whether those rates should apply to the budgeted costs as well as the incurred costs [in brief, the reasons for the reductions were that the uplift on outer London guideline rates was excessive on the standard basis, having regard to the CPR 44.4(3) factors, and the increases year on year were too high given the level of inflation, were unexplained and could not be justified by reference to, for example exceptional overhead expenses].
At the detailed assessment hearing, Mr Ridgeway appeared for the Claimant and Mr Clayton represented the Defendant. Since this was a case to which Costs Case Management under CPR 3.12–18 applied and having been subject to the CMO, the bill was split into parts to coincide with the phases in the costs budget as detailed in Precedent H. That meant that Part I contained the costs sought up to the date of the Claimant's costs budget, itself being subdivided into 13 parts, with Part 2 containing the incurred costs by phase, being subdivided into 14 parts. As a result it was submitted that drafting the bill had taken longer than otherwise would have been the case and that had accounted for the high level of bill preparation and consideration which sought £11,032. That was a fair point in my view. Indeed it was my impression that the need to draw the bill in this way had had the potential to lengthen the detailed assessment, but the advocates must take credit for the sensible and co-operative manner in which the hearing was conducted which meant that assessment was concluded within the allocated court time.
By coincidence, 21 June 2017, the date of the hearing, was also the day on which the Court of Appeal handed down its judgment in ( Harrison v University Hospitals Coventry and Warwickshire Hospital NHS Trust (2017) 3 Costs LR 424 which had approved the decision in Merrix v Heart of England Foundation NHS Trust [2017] 1 Costs LR 91 (Carr J). That had taken place at 10.00am with the detailed assessment listed to start at 10.30am (which it did). As will be well known, Harrison provided the guidance by the Court of Appeal about the way in which detailed assessment proceedings should be conducted when a CMO has been made under CPR 3.17 and costs budgets have been fixed. By the time of the short adjournment, the transcript was in the public domain and over lunch, we (that is to say, Mr Ridgeway, Mr Clayton and myself) were in a position independently to speed read the decision, albeit, speaking for myself, I did not have sufficient time to absorb the full detail of the judgment, nor the manner in which it might impact upon the issue before me for decision that day which is now the subject of this judgment. For that reason, I heard the parties' submissions on the point and reserved judgment on the basis that a further hearing could be convened, hopefully by telephone to save costs, about which any outstanding points could be resolved.
The Law
The law with which this judgment is concerned is Costs Management under Rules 3.12–3.18 of Part 3(ii) Civil Procedure Rule 1998 (as amended). The relevant Rules and Practice Directions in force when the CMO were made were the following:-
"3.15(1) In addition to exercising its other powers, the court may manage the costs to be incurred by any party to the proceedings.
(2) The court may, at any time, make a "Costs Management Order" where costs budgets have been filed and exchanged, the court will make a Costs Management Order unless it is satisfied that the litigation can be conducted justly and at proportionate cost in accordance with the overriding objective without such an order being made.
By a Costs Management Order, the court will:
(a) record the extent to which the budgeted costs are agreed between the parties;
(b) in respect of budgets or parts of budgets which are not agreed, record the court's approval after making appropriate revisions.
(3) If a Costs Management Order has been made, a court will thereafter control the parties' budgets in respect of recoverable costs.
…
CPR 3.17 (1) When making any case management decision, the court will have regard to any available budgets of the parties and can take into account the costs involved in each procedural step.
(2) Paragraph (1) applies whether or not the court has made a Costs Management Order.
…
CPR 18 In any case where a Costs Management Order has been made, when assessing costs on a standard basis, the court will:
(a) have regard to the receiving parties' last approved or agreed budget for each phase of the proceedings;
(b) not depart from such approved or agreed budget unless satisfied that there is good reason to do so."
Practice Direction 3E.6(a) provides as follows:-
"Unless the court orders otherwise, a budget must be in the form of Precedent H annexed to this Practice Direction …"
PD 7.3 to CPR 3:
"If the budgets or parts of the budgets are agreed between all parties, the court will record the extent of such agreement. In so far as the budgets are not agreed, the court will review them and, after making any appropriate revisions, record its approval of those budgets. The court's approval will relate only to the total figures for each phase of the proceedings, or while in the course of its review, the court may have regard to the constituent elements of each total figure. When reviewing budgets, the court will not undertake a detailed assessment in advance, but rather will consider whether the budgeted costs are within the range of reasonable and proportionate costs."
PD7.4:
"As part of the Costs Management process, the court may not approve costs incurred before the date of any budget. The court may, however, record its comments on those costs and will take those costs into account when considering the reasonableness and proportionality of all subsequent costs."
PD7.10:
"The making of a Costs Management Order under Rule 3.15 concerns the totals allowed for each phase of the budget. It is not the role of a court in the costs management hearing to fix or approve the hourly rates claimed in the budget. The underlying detail in the budget for each phase used by a...
To continue reading
Request your trial