Legal Cost Specialists

Incurred costs in costs budget

There are some odd comments in the judgment in Lifestyle Equities CV & Anor v Royal County of Berkshire Polo Club Limited & Ors [2023] EWHC 2923 (Ch) :

“The Defendants … say the Claimants accepted the Defendants’ incurred costs were reasonable in the Precedent R. … The Claimants dispute the second point, but it is clear from the Precedent R that the Claimants offered the totality of the Defendants incurred costs.  It is reasonably obvious why the Claimants agreed the whole of the Defendants budget – simply because the Claimants budget was significantly higher. … The Claimants level various criticisms at the Defendants incurred costs but the volte face in the Claimants approach (agreeing 100% of the incurred costs to the percentage now offered of 41%) is remarkable.”

There is no copy of the Precedent R attached to the judgment, but it is difficult to see how this document can have “accepted”, “offered” or “agreed” anything in respect of incurred costs. There is no place within the Precedent R document that allows a party to comment on incurred costs.

I suspect I know what has happened here.

The bottom of Precedent R has the following summary:

Claimed Total of budgeted and incurred costs Offered
Incurred £0.00 £0.00
Budgeted costs claimed £0.00 £0.00
GT £0.00 £0.00

When completing the document (which is in Excel spreadsheet format), the incurred totals automatically populate the two boxes in the incurred line for both the “Claimed” and “Offered” columns. To that extent, the form is misleading. The “Offered” box for incurred costs is not an offer at all. It simply shows the actual amount of the incurred costs. Presumably, this is so it is readily apparent, when this is added to the amount being offered for future budgeted costs, what the grand total would be. Of course, the incurred costs are subject to detailed assessment in the normal way (see Harrison v University Hospitals Coventry & Warwickshire NHS Trust [2017] EWCA Civ 792

Costs practitioners know this and, one would have thought, so do most judges who undertake costs budgeting.

Unfortunately, it appears that the judgment here was being made by a judge with no knowledge of how Precedent R is designed and who did not receive proper assistance from the advocates before him (no doubt because they also lacked basic understanding of costs budgeting).

Embarrassing all round.

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