No more cliffhangers…

Two recent cases have outlined how the Court should approach incurred costs in budgeting.

In Harrison v University Hospitals Coventry & Warwickshire Hospital NHS Trust [2017] EWCA Civ 792, the Court of appeal confirmed that incurred costs do not form part of the budgeting process; these are to be dealt with at detailed assessment. They should, however, be taken into consideration when dealing with the overall question of proportionality. This reaffirmed the position of Carr J in Merrix and expressly disagreed with the dicta in SARPD Oil International Limited. Incurred costs are subject to assessment without any restraint under CPR 3.18. Although, in accordance with CPR 3.15(4), any comments made by the judge at the CCMC are to be taken into account in any subsequent assessment proceedings”.

These ‘comments’ have been addressed in the case of Sir Cliff Richard OBE v The BBC & Chief constable of South Yorkshire Police [2017] EWHC 1666(Ch). Chief Master Marsh indicated that the court should be wary of making any comment in relation to incurred costs at the budgeting stage. He stated, “to my mind there is little or no value in the court recording a general comment about incurred costs along the lines that the incurred costs are ‘substantial’ or they are ‘too high”.

He also noted that the process of costs budgeting was a summary one that is often undertaken quickly. In this case, Sir Cliff’s incurred costs to date are almost £1.2 million. Master Marsh emphasised however, that although the figures appear to be substantial in absolute terms, “it is quite impossible for the court today to form any meaningful view about whether those costs can properly be characterised as being unreasonable and/or disproportionate, let alone to be significantly or substantially unreasonable and/or disproportionate”.  

Moral of the story, detailed assessments live on for now…and probably best that the judge keeps ‘his comments’ to himself…


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