Following the introduction of the Jackson Reforms on 1st April 2013 costs budgeting is fast becoming one of the most effective tools in managing the level of claimants’ costs payable between the parties.
It is important that defendants pitch their own costs budgets at the right level to ensure costs are recovered appropriately.
Many of the key costs budgeting issues have yet to be tested by the courts, such as the application of the new proportionality test within costs budgeting and the extent to which costs budgets can be utilised within the detailed assessment process. Nevertheless, the costs budgeting regime is now compulsory for the majority of multi-track cases and whilst the costs budgeting process is presently being reviewed by Jackson L J, costs budgeting looks to be here to stay.
An effective approach at the costs budgeting stage can have major benefits to any organisations that are involved with litigation. The costs budgeting services we offer include:
- budget preparation
- advice and review
- advocacy at costs management conferences and negotiations
Costs Budget review
It is crucial that appropriate objections are raised to an opponent’s costs budget in order to restrict the amount of costs that could otherwise be recovered. We can assist with challenging a claimant’s budget, providing a full review and written advice. Our budget analysis covers each of the main areas of the budget, the contingencies and potential proportionality or conduct issues. We are able to identify any areas where we believe a challenge could prove fruitful, provide written submissions to be utilised at CMCs, suggestions for areas of agreement and advice on tactics, taking account of the different paths the claim could take and the most effective way to limit opponents’ budgets to a reasonable level.
Not only is it important to consider opponents’ costs budgets but in order to ensure the appropriate level of costs is recovered in successful cases, it is crucial that steps are taken to effectively plan litigation and include adequate provisions in the budget. Getting the budget wrong can limit the level of costs when it comes to the recovery of costs between parties. Equally careful consideration must be given to the level of the defendant's costs budget as a budget pitched at the high end of potential costs spend may give licence to claimants to justify their own costs budget at an unreasonably high level.
The advent of Qualified One Way Costs Shifting (QOCS) may limit the recovery of defendant costs in many personal injury claims. However, even in those cases, there remains potential for the recovery of costs where a defendant Part 36 offer is successful or there is a finding that a claimant is fundamentally dishonest. Getting the defendant costs budget right remains an important part of the costs budgeting process.