Green light for revising budgets up

Claimants can revise budgets upwards if more disclosure than expected is needed, representing a ‘significant development’, a High Court master has held.

Ruling in Ohoud Al-Najar (a protected party) v the Cumberland Hotel [2018] EWHC 3532 (QB), Master Davison agreed a 78% budget increase of £49,185 to £111,811 after the expected 20 to 30 lever arch files of documents turned out to be 55 lever arch files. He outlined five broad principles, including that whether a development is ‘significant’ is a question of fact; if what occurred should reasonably have been anticipated it will probably not be ‘significant’ or a ‘development’; and the development can occur in the normal course of litigation.

‘As a matter of policy, it seems to me that the bar for what constitutes a significant development should not be set too high because, otherwise, parties preparing a budget would always err on the side of caution by making overgenerous (to them) assessments of what was to be anticipated,’ he said.

The case concerned a shocking incident where a violent criminal gained access to the rooms where nine members of an extended family were sleeping and attacked three sisters with a claw hammer, causing serious facial and head injuries. Liability was complex.

City University’s Professor Dominic Regan (pictured), NLJ columnist, said: ‘This is a rare and overdue steer as to when a budget can properly be varied.

‘We are more than five years on from implementation and yet practitioners stumble around as if blindfolded.’

Francis Kendall, vicechairman of the Association of Costs Lawyers (ACL), said: ‘The ACL’s surveys over the five years since costs budgeting came into force have consistently shown that solicitors are not making enough applications to revise their budgets, when we all know in practice how often they are blown off course by events that were not reasonably foreseeable at the time they were set. Failing to revise a budget in such circumstances is just storing up problems for the later assessment of costs.

‘We urge solicitors to learn from this case and keep in mind the need to update their budgets when the situation demands it.’