In her last article, Michelle Walton, Advocate, questioned the decision of Deputy Master Campbell in the case of RNB v London Borough of Newham (4 August 2017, Case No: C01CL127, SCCO Ref: CCD 1702513) where a reduction in hourly rates was classed as ‘good reason’ to depart from an approved Costs Budget.
There has since been a decision by District Judge Lumb, sitting as a Regional Costs Judge, which also disagrees with the decision in RNB. Michelle reports on the latest updates and impact here.
“After submissions, Judge Lumb held that to reduce hourly charging rates for budgeted costs to the same levels as those allowed for the incurred costs, thereby causing a potential departure from the budgeted phase totals, would be to second guess the thought process of Costs Managing Judge and would impute a risk of double jeopardy into the detailed assessment.”
This is the same reasoning I applied in my article where I reasoned that:
“If a phase total is reduced at a CCMC, it is unknown whether this reduction is due to the assessing Judge considering the hourly rate to be too high but the amount of time claimed reasonable, considering the hourly rate to be reasonable but the amount of time claimed too high, or a complete disregard to both hourly rates and time and just consideration that the phase total is excessive. To simply assume therefore that the hourly rate claimed within a Budget is the basis upon which the phase total figure was arrived at is wrong, and indeed completely contradicts what the rules say a Judge should do when approving a budget.”
The principle objectives of budgeting of keeping costs proportionate, reducing detailed assessments and providing certainty as to costs liability seem to have been long forgotten by the courts. There are now two conflicting cases dealing with this point and there are likely to be many more first instance decisions dealing with the same.
Which decision garners the greater following is yet to be known, however what is certain is that there will need to be a higher binding authority on this matter before the point stops being a fundamental one in the arsenal of both paying and receiving parties.
It is believed that Deputy Master Campbell’s decision is being appealed, however assuming it is not leapfrogged it will be heard by the London Designated Civil Judge in the Central London County Court therefore it will still not produce a binding decision.
If the losing party in the RNB appeal, or someone else elsewhere, feels confident enough to take this point to appeal in the High Court or Court of Appeal, the majority of relevant cases are likely to be stayed pending judgment of the same. Considering this together with the whole objective of costs budgeting mentioned above, the sooner this binding authority is obtained the better.
Michelle Walton is an Advocate at Victoria Square Chambers.
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