Costs News

28 April 2021
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Party limited to court fees-only budget can apply later for costs

A party that filed its budget late and was limited to court fees can still apply for costs at a later stage under CPR 3.14 or 3.18 if there has been a material change of circumstances, a High Court judge has ruled.

Mr Justice Marcus Smith said it would be “absurd” if the court could not take into account an unexpected event such as, in this case, the unavailability of a judge to hear the trial.

In Pasricha v Pasricha (Rev 1) [2021] EWHC 1017 (Ch), His Honour Judge Lochrane made no order as to costs following an abortive three-day trial, but the defendant nonetheless sought recovery of the £6,500 brief fee incurred for first day of the trial.

The underlying dispute concerned the defendant’s right to occupy a property. None of the defendants filed costs budgets in time and so their costs were limited to the court fees, a decision upheld on appeal.

However, the claimant then failed to pay the trial fee of £1,090 in time and the claim was automatically struck out. It was paid about a week late and District Judge Fine granted relief from sanctions.

The pre-trial review was held without addressing whether a judge would be available for trial and when the trial date came, on 3 February 2020, the court did not have the judicial capacity to fit it in.

The defendant nonetheless sought costs and HHJ Lochrane considered he was precluded from making an order on the basis that it was limited to a court fees-only budget.

Marcus Smith J considered that CPR 3.14 was “widely drafted in terms of the discretion of the courts to ‘order otherwise’ and that a court can order otherwise even if an application to file a costs budget late has been made and rejected”.

CPR 3.14 also allowed a party to apply to vary the budget in the event of a material change of circumstance.

“It seems to me that it would be absurd to say that because something utterly unexpected, like the unavailability of a trial judge, took place, the costs budget in those circumstances was writ in stone and could not be varied by the judge if so advised,” said the judge.

“So it seems to me that CPR 3.14 in itself contains an ability in the court to say, ‘Yes, your costs budget was deemed to be zero but the circumstances have changed; I'm going to order otherwise and regard your costs budget as including’ – for the sake of argument, and to take a hypothetical in this case – ‘the first day's brief fee and I will vary your budget accordingly’.”

Marcus Smith J added that CPR 3.18 could also be used where a judge was being invited to make an order for costs and to assess those costs summarily on the standard basis.

“It seems to me that, in those circumstances, a judge… must have regard to the costs budgeting question, and should not depart from it unless satisfied that there is good reason to do so. This, in my judgment, provides a further route for a judge to do justice, as appropriate, where costs are at large.”

He ruled that here, on the basis of CPR 3.18 alone, it was open to HHJ Lochrane to re-consider the agreed budgeted costs or the approved budgeted costs and, if satisfied, to depart from them.

“So it seems to me that, viewed both in combination and separately, CPR 3.14 and CPR 3.18 do provide an ability in a judge to make a costs order of the sort that was sought by the appellant in this case and, to the extent that the Judge considered that he was unable to make such an order, I consider that he erred.”

He went on to consider whether there was good reason to depart from the deemed costs budget. But as he could not say “with a degree of clarity” that the claimant was responsible for the ineffective trial, Marcus Smith J ruled that there was not.

“As a counsel for perfection, it may be that concerns about the trial date could have been aired at the pre-trial review. I anticipate that they were not, because everyone, including Judge Lochrane, was assuming that the trial would take place as expected on 3 February and it was, unfortunately, a surprise to everyone that there was no judge available on that date.

“It seems to me that, in those circumstances, it is entirely wrong to cause any party to pay the other party's costs in this case.”

The judge also made no order for costs for the hearing itself on the basis that, although the defendant had won on the point of law, the outcome was the same.

Mark O’Grady appeared on behalf of the appellant/defendant. Benjamin Channer appeared on behalf of the respondent/claimant.

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