Costs Budget Guidance Note issued by KBD
Posted on 8th October 2024 at 16:08
By Sean Linley, Senior Costs Draftsman
Updated guidance has been introduced by Senior Master Cook for the King's Bench Division (KBD) which sets out the preferred approach to issues which commonly arise within the budgeting process, specifically for high value personal injury and clinical negligence claims.
Whilst the guidance relates to matters in the KBD it likely to have relevance to claims across the board.
The full note is available here. It is useful in signposting the approach to some of the most contentious and common issues and also brings a sharp focus on the recent sanctions cases where there have been budgets which have been held to be unrealistic and/or unreasonable.
The key aspects are bullet pointed below:
1. Budgeting, Proportionality & Reasonableness - The approach to proportionality & reasonableness is not the same as within Detailed Assessment proceedings but the court should still have regard to the provisions of 44.3(5) and 44.4(2) including looking at the sums in issue, complexity, conduct, wider factors, vulnerability, any specialised knowledge require and where the work is undertaken.
2. Hourly Rates - Hourly rates are not be fixed or approved and should not be determined by the court when undertaking costs management. However, when considering reasonableness the court should have regard to the reasonableness of the hourly rates claimed (and availability of other solicitors to the work at a lower rate). Guideline Hourly Rates are a starting point in determining reasonableness and it may be appropriate to allow enhancements, particularly for the more senior fee earners.
In addition, it is not appropriate to costs budget on the basis hourly rates will be reserved to detailed assessment.
3. Delegation - Consideration will be given to work which could be reasonably delegated. Examples given include junior fee earners obtaining medical records or initial witness statements (see Point 5). The court will consider the appropriateness of delegation when considering the reasonableness of a costs budget.
4. Counsel's fees - It is not for the court to determine how a party should be represented such as by dual Counsel, Leading Counsel etc. Where there are two Counsels then this may impact the allowance for the solicitor and it may be assumed where there are multiple Counsels that some work will be shared. The involvement of a Junior Counsel alongside Leading Counsel may lead to an expectation that the extent of the involvement of Leading Counsel would be reduced.
5. Guidance on Phasing - The note gives guidance on certain aspects of phasing:
Issue / Statements of Case - It may be reasonable to budget for Counsel to assist in preparation of any Schedule of Loss, the familiarity of Counsel in complex cases may make this reasonable.
Disclosure - Level of disclosure in any given case is highly case specific. There is a distinction between obtaining records (which can be done at a more junior level) versus reviewing records (which may require more senior input). In addition, in most cases solicitors will be expected to keep a running electronic bundle of documents (even in document heavy cases). Such a bundle will form the basis of any trial bundle (and ultimately impact any time allowance for the trial bundle). Finally, collating & pagination of records will generally be regarded as an administrative and not recoverable.
Witness Statements - There is an expectation that the first draft a witness statement can be undertaken by lower grade fee earners. The extent of any involvement of senior fee earners will be case specific.
Expert Reports - In general the KBD will assume that there will be dispute between all of the experts up to trial. If there is no dispute then this may be a good reason to depart downwards. Budgets should be drawn therefore on the basis experts will be required to give oral evidence. In addition, just because an estimate is obtained from an expert it does not follow that the fee will be reasonable. The KBD, however, accept that organisations like the NHSR or insurers may be less than fees paid for by Claimants. Concerning consultations and conferences, the KBD's view is that these should be undertaken without travel unless there is a case specific reason for it. It is accepted that in some cases close in-person attendances may be required.
PTR - The KBD's general view is that PTR is not necessary and therefore should be budgeted on the basis there will not be a hearing. The note states that "often costs of 2/3 hours are allowed" for the PTR phase.
Trial Preparation - A Pre-Trial conference may not always be reasonable and it may require justification. Concerning Brief Fees, the Court should consider the work Counsel will put into the brief and the fact Counsel will be booked in for the trial so may have a gap in their diary if the case settles (which could be difficult to fill at short notice). If Counsel is heavily involved in the case throughout then the expectation will be that the work in preparing for trial will be less. An abated Brief Fee should be less than a delivered Brief Fee as per Hankin v Barrington & Ors [2021] EWHC B1 (Costs).
Trial - Budgets are expected to provide for expert attendance at trial and typically on the basis of 1 or 2 days' attendance. This allowance can be adjusted down the line. With regard to the solicitor attendance, it might not be reasonable for a senior fee earner to attend throughout a trial. Concerning the time allowance per day the reasonable starting point is 7/8 hours.
ADR / Settlement - JSM/Mediation should be assumed within the budget. If it does not occur this may be a good reason to depart downwards. ADR as a phase may be significant in high value claims but the court will have regard to the familiarity of Counsel and the solicitor from earlier involvement in the case when determining what is reasonable.
5.Costs of Costs Management - The KBD note refers to the case of Reid (see our previous blog here). In short if a party pursues an unreasonable or unrealistic claim for costs or "fails to take reasonable steps to agree budgets or make reasonable offers" could have adverse costs ordered against them. Also see Hopley and Jenkins.
6. Form of Order - The note sets out a recommended form of order to be used in KBD matters. This can be seen at the end of the note and can be utilised by pracitioners for the purpose of any draft orders.
Do you want to discuss matters around Costs Budgeting and strategies? We are always happy to have a chat and provide a view or advice on tactics and/or approach. The revised King's Bench Guidance Note highlights the need to be alert to common issues and the KBD's general approach to them. Should you want to discuss this or any other issues, then you can give us a call on 01482 534 567 or email info@carterburnett.co.uk.
Tagged as: Costs Budgeting
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