Al-Najar & Ors v The Cumberland Hotel (London) Ltd

Under paragraph 7.6 of Practice Direction 3E, a significant development is assessed factually by reference to the scale and complexity of what has occurred. A development need not arise outside the normal course of litigation. The question is whether it could reasonably have been anticipated when the original budget was prepared. Once a significant development is established, the revised figures must be reasonable and proportionate in light of it. The threshold should not be set so high that parties routinely protect themselves through bloated budgets.

The claimants brought a liability-only claim arising from serious injuries suffered during an attack at the defendant hotel. Their disclosure phase had been budgeted at £62,626.50 on the expectation of approximately 1,000 to 1,500 documents. The defendant disclosed 3,250 documents in 55 lever arch files.

The claimants applied under paragraph 7.6 of Practice Direction 3E to increase the disclosure-phase budget to £111,811. The central issues were whether the increased disclosure constituted a significant development in the litigation and, if so, whether the proposed revised figures were reasonable and proportionate.

1. Significant development. The application engaged paragraph 7.6 of Practice Direction 3E. Whether a development is significant is a question of fact, depending primarily on the scale and complexity of what occurred. A party will generally be unable to rely on an event that should reasonably have been anticipated when the budget was prepared.
2. The development need not occur outside the normal course of litigation. Disclosure and expert evidence arising in the ordinary progress of a claim may constitute significant developments where the litigation has become more complex and costly than could reasonably have been envisaged. The threshold should not be set too high, since that would encourage unnecessarily generous and defensive budgets.
3. The original disclosure assessment was reasonable. Disclosure of approximately twice the anticipated volume was therefore a significant development. It was unrealistic to say that the scale of disclosure could have been foreseen merely because disclosure was an ordinary feature of the litigation.
4. Revised figures. The proposed increases for solicitors and counsel were reasonable and proportionate in light of the development. The eightfold increase in expert costs was unexplained and was not approved. The expert allowance was limited to twice the original figure.
5. The application was accordingly granted in part, with the revised budget approved subject to the reduction in expert costs.

At a case management conference on 16 November 2017, Master Eastman approved the parties’ budgets. The present judgment determined the claimants’ subsequent application to revise the disclosure phase of that budget.