Blog - Tuesday 9 Sept 2014

Please Sir, I want some more!

(1) Peter Kellie (2) Kelly Kellie v Wheatley & Lloyd Architects LTD [2014] EWHC 2886 (TCC)

This was exactly what Marc Lixenberg of Counsel on behalf of the Defendant asked of His Honour Judge Keyser QC sitting in the TCC on the 11th August 2014 in terms of a further payment on account of costs.

Given the trial concluded on day five as opposed to within an anticipated four days a further ‘minimum’ payment of £21,700.00 over and above the £70,000.00 already paid on account of costs by the Claimant was sought by the Defendant. This was on the basis of the trial taking a further day to conclude and the fact the Budget was already approved at £91,700.00.  The unforeseen extension of the trial was cited as a ‘good reason’ for permitting recovery in a greater amount than the approved budget (i.e. CPR.r.3.18 (b)). The rebuttal from Counsel for the Claimant was that the sum of £70,000.00 already paid on account was ‘…perfectly sufficient, representing more than 75% of the approved budget…’.

Applying the judgment of Warren J in Gollop v Pryke (November 29, 2011; unreported) required the Court, in determining an appropriate payment on account of costs to make a reasonable assessment of what would likely have been awarded.

Whilst the Claimant did make submissions generally as to the Defendant’s fees being excessive this observation was made in relation to the sum total of costs in the sum of £166,469.00 and not the approved budget as such.

The Judge, in absence of any arguments determined that the material consideration before him indicated the probability of a ‘…modest increase…’ to the approved amount rather than a reduction from it and concluded he did not think it likely costs would be assessed less than £90,000.00.

The Judge therefore concluded that he saw no reason why the Claimant should not pay a further £20,000.00 (£90,000.00 total) on account of costs awarded to the Defendant being the amount originally sought by the Defendant’s Solicitors in correspondence.

Whilst a ‘…greater likelihood… in terms of the ‘…modest uplift…’, the Judge was not prepared to depart from the spirit of CPR.r.3.18 by reason of pre-empting the assessment process and would not grant anything over £91,700.00 in principle.

This demonstrates the ever growing importance of costs budgeting and in situations where there is an approved budget, this undoubtedly strengthens a party’s arguments for an interim payment to the full extent of the approved amount. It is clear that Judge’s will not entertain pre-empting the assessment process but shows that a party opposing a payment on account to the tune of an approved budget will have to provide more robust reasoning than simply stating any payments made below this level are ‘…sufficient…’.

Click Here to read the full Judgement

By Nicholas J Browne, Solicitor