A recent decision of Chief Master Marsh sitting in the Chancery Division has confirmed that the court has the power to costs manage cases involving litigants in person.
The case concerned a dispute between brothers in relation to jointly owned companies. The Claimant was initially represented by solicitors, and a costs management hearing was listed. Before that hearing, the Claimant began to act in person with the ad hoc assistance of direct access counsel.
At the costs management hearing both parties asked the Court to make a costs management order. The Claimant was directed to produce a budget. The claimant’s cost budget was thereafter filed and provided for future costs in excess of £315,000.00 with incurred costs in the sum of £547,620.99.
At the subsequent hearing, Master Marsh noted that the court’s jurisdiction to make a costs management order in relation to a litigant in person was not entirely clear. He considered it helpful to set out his reasons for concluding why such a power exists.
Master Marsh outlined why a costs management order is not ordinarily required for a litigant in person: the litigant in person hourly rate is £19 which means the costs incurred should rarely be disproportionate.
However, where the claim is complex and the litigants in person’s recoverable costs may be substantial due to the use of direct access Counsel, it may be necessary for the matter to be cost managed.
CPR 3.13(1) exempts litigants in person from the requirement to file and serve a budget;
(1) Unless the court otherwise orders, all parties except litigants in person must file and exchange budgets…
Notwithstanding this, the Editors of the White Book suggest it is open to a litigant in person to file and exchange a budget if they wish.
Master Marsh then examined CPR 3.15(2):
…the court may manage the costs to be incurred by any party in any proceedings
And CPR 3.15(3):
…the court will thereafter control the parties’ budgets in respect of recoverable costs.
Master Marsh identified that there are no different provisions applying to litigants in person within CPR 3.15.
After examining Practice Direction 3E, Master Marsh concluded that there was nothing that prevented a costs management order being made against a litigant in person.
The Master concluded:
The default provisions for the service of budgets in CPR 3.13 exclude litigants in person because the majority of cases in which litigants in person appear will not require the litigant in person's costs to be managed. But a litigant in person may opt to serve and file a budget, or the court may order a litigant in person to do so. Furthermore, the court may decide to make a costs management order in relation to a litigant in person's budget. Indeed, in a case in which a litigant in person is likely to be seeking a substantial costs order, whether because there will be fees of counsel under the Direct Access scheme or otherwise, it may well be desirable to do so.
By Kelly Brady - Associate & Costs Lawyer