Seekings & Ors v Moores & Ors

A costs budget may be revised under Practice Direction 3E paragraph 7.6 only where a material change in the litigation has occurred since the last budget and the change warrants revision. Whether a development is significant is fact-sensitive, assessed principally by its scale and complexity.

Work, costs or procedural steps which were known, or should reasonably have been anticipated, when the budget was prepared will ordinarily not qualify. A party cannot obtain a second opportunity to correct an inadequate budget or recover costs caused by its own failure to comply with orders. The court may also examine whether the existing budget already accommodates the alleged development and whether further expenditure would be reasonable and proportionate.

The Defendant applied to increase his approved costs budget by approximately £130,000 in litigation concerning the parties’ business interests and a related unfair-prejudice petition. The proceedings were case managed together and were due to proceed to a joint trial.

The proposed increases principally concerned disclosure, expert evidence, issues and pleadings, and work arising from requests for further information. The Claimant opposed revision, arguing that much of the expenditure had already been incurred and that the alleged developments were foreseeable or resulted from the Defendant’s own conduct.

The court considered whether the Practice Direction permitted revision and whether the alleged developments were sufficiently significant to justify it.

1. The application to revise the Defendant’s costs budget was refused. It was unnecessary to determine whether the court had jurisdiction to approve costs already incurred in the period since the previous budget.

2. Under CPR PD 3E, para 7.6, “development” means a development in the litigation since the last agreed or approved budget. Significance is a question of fact, principally depending on the scale and complexity of what has occurred. A development need not arise outside the normal course of litigation, but it must go beyond matters expressly or impliedly allowed for in the existing budget.

3. A party cannot rely on its own failure to anticipate the work reasonably involved in the litigation. Mistakes in preparing a budget, or a failure to understand the nature of the claim, will not ordinarily amount to a significant development. The costs-management process is intended to further the overriding objective and does not provide a second opportunity to correct an inadequate or careless budget.

4. The court may examine the existing budget when considering revision. It may ask whether the alleged development was already catered for and whether the sums previously agreed for the relevant phase were reasonable and proportionate.

5. The continuing cost of an electronic disclosure platform, work arising from requests for further information made before the budget, additional review of the Defendant’s own documents, preparation of a list of issues, and expert work connected with the same matters were foreseeable or insufficiently significant. The costs of unsuccessfully resisting applications for further information did not justify revision, particularly since adverse costs orders had already been made.

6. The court also criticised the failure to identify promptly the changes and reasons required by the Practice Direction. The parties subsequently agreed the form of order and the costs of the application.

Not stated in the judgment.