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High Court gives clarification on cost budgeting

View profile for Louise Hebborn
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The changes to the Civil Procedure Rules brought in as part of the Jackson reforms provide that a cost budget must be filed 7 days before the first Case Management Conference in multi-track litigation, unless the Court orders otherwise. This rule is subject to some limited exceptions.

The case of Mitchell has been very widely publicised and has led to many litigants attempting to take advantage of opponents who fall foul of the rules.

The latest such case is Kershaw v Roberts. That case involved part 8 proceedings and the Court had sent out two notices referring to the hearing as being a directions hearing. The claimant filed a cost budget 7 days before the hearing and the defendant responded by filing its cost budget just 2 days before the hearing. The claimant argued that the defendant had missed the deadline for filing its costs budget.

The claimant argued that the hearing was a Case Management Conference and that the rules in respect of cost budgeting applied. The judge at the initial hearing found that the hearing was not a Case Management Hearing and that the parties did not need to file a cost budget.

That decision has been supported this month by the High Court, who determined that a case had not been allocated to the multi-track until the District Judge had done so at the first hearing. The case was not a CMC and the notice from the Court did not refer to it as a CMC and specific distinction was made between CMCs and Directions Hearings.

It is unclear whether litigants can take much comfort from this decision as it would be easy to see a different decision being made by a different judge on a different day. However the wording of the notice for the first hearing is important. Litigants in any doubt may still be best advised to file a costs budget to avoid becoming involved in satellite litigation.

By Louise Hebborn, partner in the commercial litigation team

Stephensons’ commercial litigation team offers litigation advice on a range of multi-track litigation cases.