Costs budgeting was, in theory, meant to operate akin to summary assessment at the outset of a claim. The serious flaws with the implementation process and numerous practical problems, with which readers will be more than familiar, has made costs budgeting an expensive mess with little of the hoped for benefits being delivered.
A new shorter trial pilot scheme is being introduced into the courts in the Rolls Building that will seek to bypass these problems. This will dispense with costs budgeting, unless the parties agree otherwise. Within 21 days of the conclusion of the trial, or such other period as ordered by the court, the parties shall each file and exchange schedules of their costs incurred in the proceedings. These “should contain sufficient detail of the costs incurred in relation to each applicable phase identified by Precedent H… to enable the trial judge to be in a position to make a summary assessment thereof following judgement”. The court will summarily assess the costs save in exceptional circumstances.
The expense of costs budgeting will be avoided. The costs of assessment should be slashed.
The downside over costs budgeting is that it deprives the parties of the opportunity to know what costs they will face. Why not bring back District Judge Lethem’s routine costs capping orders?
The summary assessment of potentially significant costs will still lead to the problem of largely arbitrary figures being allowed, but the fact this will be based retrospectively on the costs actually incurred rather than based prospectively on speculative future budgets is no more likely to result in injustice that the costs budgeting process. With proportionality now being the overriding factor, and trumping reasonableness or necessity, rough justice is all that can be expected.
If the pilot scheme is successful for these types of commercial claims, and there is no reason to suppose it will not be given its simple approach, it will only be a matter of time before this is extended to other litigation.
How much simpler Lord Justice Jackson’s Report might have been if it had simply said:
“Scrap detailed assessment. Summarily assess everything upon settlement with the costs capped at a proportionate figure disregarding reasonableness or necessity.”
No need to end recoverability of additional liabilities. No need for Qualified One Way Costs Shifting. No costs budgeting. No new Bill of Costs format. No new relief from sanctions test and the Mitchell/Denton farce. Etc. Etc.