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Failure to file a revised costs budget

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Posted by Jennifer Rhind on 24 February 2015

Jenny Rhind - Commercial Litigation Lawyer
Jennifer Rhind Solicitor

The recent High Court decision in Simpson v MGN Limited and another [2015] EWHC 126 (QB), has highlighted that a failure to submit a revised costs budget to cover the costs of a trial of a preliminary issue and a failure to serve a costs statement upon the opponent will not necessary mean that costs are assessed at nil.

This was in relation to a preliminary issue hearing in a defamation claim brought by Daniel Simpson, a Premier League footballer, against the Daily Mirror. The hearing dealt with what defamatory meanings were borne by the words complained of, the Claimant’s application to strike out the defence of justification and the Defendant’s cross-application for permission to amend their pleaded defence of justification. The Claimant was successful with his application. 

The Claimant applied for an order for costs in the sum of £24,096.20 inclusive of VAT. The Defendant argued that the Claimant should not be entitled to any costs as (i) the Claimant’s approved costs budget did not include any sum in respect of the applications and there was no good reason to depart from the budget and (ii) the Claimant had failed to serve the costs schedule on the Defendant.

Preliminary issues

At a Case Management Conference (“CMC”), the Master refused the Claimant’s application for a trial of the preliminary issues  but did not rule out that there might be such an order in the future. In respect of costs budgets, the Claimant had agreed the Defendant’s costs budget which included a figure for dealing with the Claimant’s preliminary issue application.  The Claimant’s served an amended costs budget on the day of the CMC which included a contingent cost for the preliminary issue but was contested by the Defendant.

The Master recorded that the Defendant’s costs budget was agreed including the contingent cost for the preliminary issue. The Claimant’s costs budget was approved, however, in the Master’s table detailing the various phases of litigation, next to contingencies, the Master wrote “N/A”. The Claimant’s figure for the contingent cost of the preliminary issue was neither approved nor agreed but neither was it disapproved.

The Claimant made his application; the Defendant pointed out that a revised costs budget should be submitted; the Claimant served an amended costs budget but the Defendant failed to comment upon this until 2 days before the hearing stating that they did not agree to the Claimant’s proposed costs for dealing with the preliminary issue. The Claimant’s solicitors failed to submit the amended costs budget to the Court.

In addition, the Claimant prepared and filed at Court a costs schedule in preparation for the hearing but failed to file this upon the Defendant. 

The decision

Mr Justice Warby disagreed with the Defendant that the relevant sanction for either of the Claimant’s failures was to assess the Claimant’s costs at nil, however, he did ensure that his decision took into account the fact the Claimant had failed to comply with the Court rules and in particular, that the failure to serve the costs schedule on the Defendant had caused unnecessary delay and costs.

Mr Justice Warby held that there was good reason to depart from the approved budget as the Claimant had included a contingent cost for dealing with the preliminary issue but the Master had not approved or disapproved his figure; there was an imbalance between the parties as the Defendant’s contingent cost for this had been agreed and the Claimant’s did submit a revised costs budget for the Defendant’s consideration but the Defendant’s failed to co-operate by leaving it so late to respond to the same. 

The Claimant recovered 90% of the costs which would have been approved as reasonable if he had submitted his costs budget less a deduction to reflect the additional costs that had been incurred by the Defendant as a result of the Claimant’s failures to file the amended costs budget at Court and for failing to serve the costs statement upon the Defendant.

About the author

Jennifer is a solicitor in the commercial litigation department.

Jennifer Rhind

Jennifer is a solicitor in the commercial litigation department.

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