Costs Budgeting – Nothing is ever simple!

Costs Budgeting – Nothing is ever simple!

Following his previous judgement in the case of Henry v News Group Newspapers Ltd [2013] EWCA Civ 19 which set the cat among the pigeons in respect of the then anticipated rules surrounding costs budgeting, Lord Justice Moore-Bick was recently involved in another case which allowed him to follow up on his comments therein.

In Henry despite his ruling, Moore-Bick LJ had warned that the approval of a budget did not necessarily mean that the costs incurred by the receiving party would be found to be reasonable and proportionate just because they fell within that budget.

Troy Foods v Manton [2013] EWCA Civ 615 was a breach of contract claim which fell under the Mercantile Court costs management pilot in Leeds last year. HHJ Kaye QC had approved the budget, however Moore-Bick LJ held that , in so doing, Judge Kaye had failed to apply the correct principles, resulting in an the approval of an overly generous budget. (He had proceeded on the basis that any amount in respect of a particular element of the claim was approved, as long as it was not so unreasonable as to render it obviously excessive or “grossly disproportionate”.)

In light of his findings, Moore-Bick LJ gave permission to the Court of Appeal to establish the correct principles on which to base costs budgeting and also the proper approach to be taken by Legal costs draftsmen at assessment. Clearly he recognised that there was a need for the Court to provide guidance in this area. Soon after Lord Justice Moore-Bick’s ruling, Lord Dyson (the Master of the Rolls) announced that at least one of a group of five judges including himself, Lord Justice Jackson, Lord Justice Stephen Richards, Lord Justice Davis and Lewison would be on the appeals bench in all cases brought as a result of the Jackson reforms.