Costs budget case leapfrogged to Court of Appeal for important Judgment
Written by Mark Reed on 30 June 2017« Return to Reading Room
Harrison v University Hospitals Coventry & Warwickshire NHS Trust  EWCA Civ 792.
A clinical negligence case was taken straight to the Court of Appeal. This was after the defendant agreed to settle the dispute before the trial and pay the claimants legal costs, but purported that the approved costs budget under CPR 3.18 were not correctly applied.
It was also considered that under the CPR rule 3.18, the judge must have good reason to depart from the budget in relation to an award for costs, but only if this award is in excess of the agreed budget. The defendants felt that there was no reason for the judge to undertake his own detailed assessment of the costs and so a lower amount than the approved limit should be awarded.
The Senior Courts costs office looked at the dispute before it was heard in the Court of Appeal and stated that CPR 3.18 required good reason to be shown before he could depart either upwards or downwards from an approved costs budget. In practical terms, this requirement also extended to costs incurred before the date of the costs budget even though it didn’t fall within the budget. It was found that these costs still held a ‘certain status’. The defendant argued profusely against this statement.
The status of incurred costs was the real issue for the Court of Appeal, and found that costs incurred before the date of the approved budget could not be taken in to account. It also held that good reason did have to be shown before any departure, up or down, from the approved budget for litigation costs.
This decision means that it should be a little easier for a successful party to obtain the total legal costs that fall within the approved costs. More importantly, litigants will no longer be able to be awarded costs that were incurred before the approved budget, no matter how much has been spent.
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