PXT v (A Child by her Mother and Litigation Friend, AXD)

The court may order costs budgeting in a child’s claim even though the automatic regime does not apply. The discretion under CPR rules 3.12(1A) and 3.13(3) is broad and must be exercised in accordance with the overriding objective. Relevant considerations include the likely duration and clinical uncertainty of the claim, the probable cost and complexity, the usefulness and expense of budgeting, and the risk that costs will become excessive or disproportionate. A stable prognosis is not a precondition. Where existing costs information is unreliable and there is a real risk of excessive costs, those concerns may provide a compelling justification for early, phased costs budgeting.

The claimant, a child who suffered a serious traumatic brain injury in a road accident, brought a high-value personal injury claim. Liability had been agreed at 85 per cent in her favour. The claim was exempt from automatic costs budgeting because it was brought by a child, and it was also expected to exceed £10 million.

The defendant applied for costs budgeting because incurred and estimated costs had exceeded £1 million and earlier estimates had substantially increased. The claimant relied on the uncertainty of her prognosis, the policy underlying the child-claim exception, and the anticipated length and complexity of the proceedings. The issue was whether the court should exercise its discretion to order costs budgets before the next case management conference.

1. Application granted. The court ordered costs management by costs budgeting and directed that it should begin promptly.
2. Although CPR r 3.12(1) excluded this child’s claim from automatic costs management, CPR rules 3.12(1A) and 3.13(3) empowered the court to order costs budgets. That discretion was to be exercised in accordance with the overriding objective, including the need to deal with cases justly and at proportionate cost and, so far as practicable, to save expense.
3. The policy reasons for excluding children’s claims from automatic budgeting were recognised. Long periods before prognosis stabilised could make budgets difficult and could generate repeated variation applications. Those considerations did not create a complete exemption or prevent budgeting where the relevant period was manageable.
4. The absence of a final prognosis did not prevent effective budgeting. The claim could be budgeted in phases and later varied if necessary. The court distinguished CXS v Maidstone and Tunbridge Wells NHS Trust, where budgeting had been sought during an effective stay and for a substantially longer period.
5. The principal factors favouring budgeting were the substantial and rapidly increasing costs, the unreliable earlier estimates, concerns about the level of solicitor involvement and time spent on documents, and the real risk that costs would become excessive and disproportionate. Budgeting could reduce future expenditure, promote transparency and settlement, and reduce the scope and cost of detailed assessment.
6. The court considered that detailed assessment at the end of the claim would not provide an adequate substitute for prospective costs management. The further observations concerning CPR r 46.4 and QOCS protection in detailed assessment were unnecessary to the decision.