Judges have no ‘general discretion’ to vary costs budgets where there are no ‘significant developments’ in the litigation, the High Court confirmed this week.
In the personal injury case of Bassey v Whittaker & Watford Insurance Company, Mr Justice Cavanagh allowed an appeal against a district judge’s decision to permit a variation of the parties’ costs budgets. The High Court ruling also shone a light on what developments will be considered ‘significant’. It found that extra work by medical experts, a modest trial window extension and further disclosure did not qualify as such because they could have been anticipated when budgets were drawn up.
Cavanagh said the appeal required him to decide ‘whether the court has the power to vary costs budgets if the parties do not agree to this course of action, in circumstances in which the court has found that there have been no significant developments’.
This issue was previously addressed by Master Kaye in Persimmon Homes Ltd v Osborne Clarke. Cavanagh noted that he was not ‘strictly bound’ by the judgment of a High Court master. But he ‘entirely’ agreed with her finding that it was ‘clear from the purpose, structure and language of CPR 3.15 and 3.15A that (at least absent agreement between the parties) the existence of significant developments since the costs budgets were finalised is a necessary precondition before costs budgets can be varied. The court does not have a general discretion to vary costs budgets…’
Cavanagh found that the district judge had erred in law by allowing variation of the budget despite finding no significant developments. However, he backed the DJ’s finding that the developments in question could have been anticipated when the costs budgets were finalised, and so were not ‘significant’.
Cavanagh said: ‘As Master Kaye indicated [in Persimmon Homes], costs budgeting is necessarily broad brush, and so the fact that some estimates and assumptions change as a result of future developments does not mean that [they] are significant developments.
‘It would not be in the interests of justice or the overriding objective if there was scope for constant tinkering with costs budgets if there are developments in the litigation. The “significant developments” test is satisfied if the development or developments is or are something that was not and could not reasonably have been anticipated by the applicant for revision at the time of the previously approved budget.’
The High Court judge remarked that, in a personal injury case, it is ‘almost always a possibility’ that further expert reports and quantum statements may be needed. He added: ‘The possibility that there might be changes to the [claimant’s] condition as a result of new therapy or rehabilitation was an obvious possibility at the time of the costs budgeting exercise, especially as it was already known that he might move accommodation, and that this might broaden the scope for different forms of therapy and rehabilitation. It was known that the experts would have to consider whether any of this made a difference to their views…
‘Similarly, it can readily be anticipated that the trial window might slip and that there may be additional disclosure.’
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