Peter Jenkins v Thurrock Council

Reduction of a costs budget does not, by itself, justify a costs penalty. However, the court may take a rounded view of the costs-management exercise and apply the factors in Civil Procedure Rules 1998, r.44.2, where an unrealistic or disproportionate budget has required unnecessary time and resources from the court and the opposing party.

Parties are not immune from costs consequences at a costs-management hearing. They must keep their budgets under realistic review, engage with justified concerns and consider whether negotiation or another costs-efficient course can avoid the hearing.

This was a reserved judgment following a costs-management hearing in a personal injury claim arising from an admitted workplace accident. The claimant’s estimated costs were substantially higher than the defendant’s, despite the relatively conventional nature of the case and the court’s earlier observations about proportionality.

The claimant revised his budget but maintained figures which the court considered unrealistic and disproportionate. The central issues were whether the claimant should receive a costs-in-the-case order despite the substantial reductions made to his budget, and whether his recoverable costs of preparing the budgets should be limited.

1. Costs of the hearing. The claimant was ordered to pay the defendant’s costs of and occasioned by the Costs Management Hearing. A reduction in a budget would not ordinarily justify such an order where it resulted from reasonable differences of approach. The position differed here because the claimant maintained an unrealistic and disproportionate budget despite justified concerns, preliminary judicial observations and an opportunity for discussion and negotiation.
2. Application of costs factors. The court applied the approach in Worcester v Hopley [2024] EWHC 2181 (KB). The court is entitled to take a rounded overview of the budgeting exercise and to consider factors such as success and conduct under r.44.2 of the Civil Procedure Rules 1998. Parties are not in principle immune from costs considerations at a costs-management hearing.
3. Conduct and proportionality. The claimant’s budget remained far above a reasonable range for the case. The hearing could have been avoided by a more realistic approach. The claimant’s conduct justified departing from the usual costs-in-the-case direction, even though admitted liability meant that he was likely ultimately to recover his costs.
4. Costs of preparing budgets. Some preparation costs were unavoidable, but recoverable costs should not reflect the crafting of an inappropriate and unrealistic approach. The claimant’s costs of costs management were therefore directed to be reduced by 35%, subject to the consequences of the costs order.