A client should not be saddled with excessive costs when their solicitors did not keep them properly informed about going over budget, a costs judge has ruled.

Senior Costs Judge Gordon-Saker was critical of claimant firm Irwin Mitchell after the solicitors claimed a costs shortfall of almost £54,000 from their client’s undisclosed damages. Following settlement of the underlying claim, the national firm filed a budget of £187,506 and agreed the defendant would pay £132,000 costs. Irwin Mitchell asked the court to approve the arrangement and assess the costs payable from the client.

In ST v ZY, Gordon-Saker cited areas where costs had exceeded estimates and concluded that these were presumed to have been unreasonably incurred. He explained it was ‘not sufficient’ for solicitors to simply tell their client that some costs might not be recovered from the other side and said that the client should have been told that the budget was being exceeded by a ‘wide margin’.

The judge said: ‘I think it very surprising that a solicitor would not tell their client that the budget had been exceeded and that the costs in excess of the budget would not be recoverable. At that point the client is moving from pursuing a claim in which reasonable and proportionate costs will be recoverable to a claim where no further costs will be recoverable in respect of some or all of the phases.

‘Instead IM appear to have been happy simply to ignore the budget and incur costs which they would or should have known would not be recovered from the defendant.’

The court heard that the claimant was a seven-year-old child whose father had been killed in an RTA in 2015. Other claims were settled on behalf of the deceased’s other children.

Gordon-Saker ruled there was an enforceable retainer in respect of the child’s claim for loss of dependency. But he noted that ‘no particular thought’ appeared to have been taken to separate out the costs for which the claimant was not liable, and some work seemed to overlap with work done on related claims.

The total claimed in excess of the budget was around £31,000. As examples of overspending, the judge listed the £1,400 approved for witness statements was exceeded by £6,250, the £12,000 approved for ADR was exceeded by £19,000 and the £4,800 approved for statements of case was exceeded by almost £6,000. 

Gordon-Saker was also critical of Irwin Mitchell for failing to provide a full set of papers in advance of the three occasions that bills were listed for detailed assessment, adding: ‘To misquote Lady Bracknell, once would have been a misfortune. Thrice begins to look like a policy.’

The judge indicated that the bill should be the subject of a detailed assessment where he would make a decision as to which costs should be disallowed. He suggested Irwin Mitchell ‘may consider it helpful’ to redraft the bill to exclude those costs.