Seekings & Ors v Moores & Ors

The application concerned a Defendant's request to revise his costs budget upwards by approximately £130,000. The key legal principles were costs management under the Civil Procedure Rules (in particular CPR Part 3.12, 3.15, 3.17 and 3.18) and Practice Direction 3E paragraph 7.6 governing revision of budgets where "significant developments" have occurred since the last approved or agreed budget. The court held that most of the additional costs for which approval was sought had already been incurred, and that the events relied on did not amount to significant developments warranting an upward revision.

Material subsidiary findings included that (i) many of the additional costs arose from matters which should reasonably have been anticipated (including disclosure work and preparation of lists of issues), (ii) some additional costs resulted from the Defendant's own failures to provide adequate replies to requests for further information and from his decision to resist interim applications (for which adverse costs orders were made), and (iii) increases attributable to changes of expert or duplication of expert work did not justify the revision. The Defendant's application to revise his costs budget was refused and it was unnecessary to determine the separate jurisdictional point under PD 3E para. 7.6.

Background and parties: The dispute arose from a business relationship and shareholding/directorship issues in Matrix Materials Limited. The Claimant brought proceedings in June 2017 and a related unfair prejudice petition was issued in mid-2018. Costs budgets were exchanged and recorded as agreed at a costs and case management conference on 7 September 2018.

Nature of the application: The Defendant applied on 28 March 2019 for the court's approval of a revised costs budget increasing his estimated costs by roughly £130,000 (from £254,167 to £383,977). The application was supported by the Defendant's solicitor and resisted by the Claimant. The parties disputed (i) whether the court may approve revisions where most of the increased costs have already been incurred, and (ii) whether "significant developments" since the last approved/ agreed budget justified any upward revision.

Issues framed by the court:

• Whether the facts relied upon amounted to "significant developments" for the purposes of PD 3E para. 7.6.
• Whether the court had power to approve a budget revision in circumstances where the greater part of the increased costs had already been incurred.

Court's reasoning: The judge analysed the relevant CPR provisions (CPR Part 3.12, 3.15, 3.17 and 3.18) and Practice Direction 3E (paras 7.3–7.6). The court adopted the approach that a "significant development" is a question of fact and requires an event or change in the litigation that goes beyond what was, or should reasonably have been, envisaged when the previous budget was prepared. The judge considered authorities and commentary on the subject (including Sharp v Blank, Churchill v Boot, Murray v Dowlman, Elvanite v AMEC Earth and Al-Najar) and applied those principles to the claimed increases for four relevant phases: Issues/Pleadings, Disclosure, Expert reports and Amendment/Contingency.

The court found that much of the work underlying the proposed increase had already been done and that many of the claimed increases were either foreseeable at the time the budget was agreed or flowed from the Defendant's own failures (notably inadequate replies to requests for further information and the costs of resisting interim applications, for which adverse costs orders were made). The judge was not persuaded that the additional disclosure platform costs, the change of expert or the list-of-issues work justified the large upward revision. Procedure for the revision had also not been followed precisely. Given those conclusions, it was unnecessary to decide the difficult jurisdictional point under PD 3E para. 7.6.

Relief sought and disposition: The Defendant sought approval of the revised budget; the court refused the application. The parties later agreed the form of order and the costs of the application.

The Defendant's application to revise his costs budget is refused. The court concluded that the events relied upon did not constitute "significant developments" warranting an upward revision of the budget, that much of the increase related to costs already incurred or to matters that should reasonably have been anticipated or resulted from the Defendant's own failures (including adverse costs orders), and therefore approval of the revised budget was not justified. It was unnecessary to decide whether the court had jurisdiction to approve retrospective revisions under PD 3E para. 7.6.