Blog - Wednesday 28 January 2015

Wednesday 28 January 2015

Appealing the assessment of a budget? You’ll Havenga difficult job

In Havenga v Gateshead NHS Foundation Trust [2014] EWHC B25 (QB) the High Court has emphasised the difficulties which will be faced by parties who wish to appeal against the assessment of a costs budget.

Summary

1.An appeal against the assessment of a costs budget is an appeal against a case management decision. Such an appeal should only be allowed where the assessment of the costs budget was wrong or unjust.

2.The role of the appellate Court is not to tinker with costs budgets. The assessment of a budget should only be interfered with if the judge on first instance acted outside of his or her wide discretion.

Facts

The Appellant was a minor who suffered brain damage caused by the Respondent’s negligence. Liability was agreed and the matter was proceeding on the issue of quantum alone. In order to determine quantum, the Court required the evidence of 14 experts.

At a case management hearing, the Appellant’s costs budget was subjected to a £300,000 reduction, which represented almost 40% of the budget as drawn. The Appellant sought to challenge the level of the reductions.

Submissions

The Appellant challenged the assessment on four grounds. Three of these grounds related to the costs claimed for work done by his solicitors and one related to reductions to the costs of the expert witnesses.

The Respondent argued that the conclusions reached by the District Judge at first instance had not exceeded the generous ambit of his discretion. As such, the appellate Court should not interfere with the first instance decision.

Judgment

The Court identified that the reductions applied by the District Judge had been rather harsh. It was confirmed that, had the appellate Court been assessing the costs budgets de novo it would have allowed higher costs than had been allowed on first instance.

However, the Court emphasised that:

“it is not the role of the appellate court to tinker with costs budgets … [T]he role of the appellate court, in these circumstances, is to decide whether the budget as revised by the District Judge was reasonable and proportionate. Only if I conclude that the revised budget was outwith what can be described as reasonable and proportionate and that, therefore, the District Judge had exceeded his wide ambit of discretion can I interfere with the overall budget.”

The Court came firmly to the conclusion that the overall budget was well within the range of the District Judge’s discretion and that the budget itself was reasonable and proportionate. The fact that the appellate Court might have been a little more generous did not mean that the decision of the District Judge fell outside his wide ambit of discretion, far less that it was wrong. 

The appeal was therefore dismissed.

Analysis

All is not necessarily lost for the Appellant. The option of an appeal to the Court of Appeal remains, although the cost of and difficulty in succeeding in such an appeal may make this option unattractive.

Of course, if there are any ‘significant developments’ in the case which render the costs budget no longer appropriate, the Appellant can apply for the same to be amended. There is also the potential for recovering costs in excess of the costs budget if the Appellant can convince the Court on detailed assessment that there are ‘good reasons’ for doing so.

Finally, the Appellant may be able to challenge the decision on Human Rights grounds, although, as has been seen previously, such an argument may be difficult to sustain.

An adverse assessment of a costs budget can cause severe difficulties in progressing a case; and as decisions relating to the level of costs budgets are case management decisions it is incredibly difficult to appeal against such decisions.

This means that it is essential to ensure that you are represented at Costs and Case Management Conferences by an advocate with a comprehensive background in legal costs.

Just Costs has a significant degree of experience in dealing with costs management. In addition to drafting costs budgets, we can provide experienced costs advocates to attend costs and case management conferences. We are also regularly instructed to prepare written submissions or skeleton arguments to be used by other advocates.

To find out more about our costs management services please contact Phil Bradbury at This email address is being protected from spambots. You need JavaScript enabled to view it.