Michael Napier

Dom Regan News 07Dom Regan newsBudget, don’t bodge itProfessor Dominic Regan begs lawyers to budget in the multi track, avoiding the ‘frightener’ ofrecent judgements and landing in chilly waters before the judiciary.The requirement to preparelitigation budgets and seek courtapproval for them is a massivedevelopment coming to most multitrackcases issued from 1 st April 2013.Indeed, two recent decisions meanthat budgeting, which is described indetail below, will have more dramaticconsequences than Lord JusticeJackson anticipated.The frightener is Henry v MGN, 16thMay 2012, an early and ominous warningfor practitioners. It was a defamationaction and, as such, was caught by anearly budgeting pilot scheme.At the outset the claimant preparedan estimate of proposed litigationspending which the court approved.After winning at trial 10 months laterthe claimant submitted a bill whichwas 18 times higher than budgeted forwitness statements, and eight timeshigher for disclosure. The extra costswere nearly £300,000.Despite expressing the clearview that the additional spend wasjustified, the Senior Costs Judge heldthe claimant to the budget in terms.What is the point of a budget if oneis then going to ignore it? Leave toappeal has been granted. Incidentally,the assessment was of base costs. Itwould be no surprise if there was aconditional fee agreement in place, sothe lost costs in just this action wouldbe about £600,000. Ouch.In Safetynet Securities LTD vCoppage, 15th August 2012, HHJSimon Brown QC, the doyen of caseand costs management as we shallsee, decided that since the winningclaimant had come in on budget adetailed assessment was futile, and sohe ordered there and then that costsbe paid in 14 days.Whilst the case is on Bailil this aspectis not reported, but I have it from theLearned Judge himself, to come awayfrom trial with costs in the bag will dowonders for cashflow. The tidy disposal‘Within the Ministryof Justice is an evilmastermind. A partywhich fails to file abudget when obligedto do so will be takento have relinquished allclaims to costs apartfrom courtfees payable.’of all issues at the conclusion of a trialis desirable, admirable. This just goes toemphasise how vital it is to work longand hard so as to perfect the content ofthe estimate.Sir Rupert recommended budgetingfor he perceived that litigatorslaunched off without considering thenumbers. Where else, he asked me,would one embark upon a substantialproject without first determiningwhether the enterprise was viable?There is also the risk of optimism –we will win so what we spend we willrecoup – whereas almost invariablythere must be a loser.Budgeting will apply to multi-trackactions whether issued in the CountyCourt or in the High Court Chancery/ Queens Bench Division. Excludedare the Admiralty and CommercialCourts. One should remember thatthe Commercial Court overhauled it’sML // November 2012