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As many practitioners will know, how one deals with even simple issues such as hourly rates on budgeting hearings varies from court to court (and even judge to judge).
Nicholas Bacon QC and George McDonald of 4 New Square consider the much needed insight into costs budgeting in practice from the four recent cases of
The following guidance (it should be stated no higher than that!) can be gleaned from those cases:
This decision will be very helpful for parties challenging budgets, as it gives the court a ready method to make significant reductions even where many of the costs have been incurred.
This decision could render the rules relating to incurred costs practically redundant- the approach adopted by the court was equivalent (or almost equivalent) to fixing the incurred costs.
However, quite how such a “record” will be applied by a costs judge on a detailed assessment remains to be seen! If you are the party seeking to obtain such a “record”, you should think long and hard about what the judge is likely to do. Do the potentially substantial benefits of obtaining such a “record” outweigh the risk of the court dismissing such an application? Would you have better prospects pursuing a similar argument before a costs judge on the assessment?
Parties might want to seize upon the “probability” test, both at the approval of budgets stage and if it is said a contingency should have been included but was missed. We fear that this could lead to considerable debate.
In CIP Properties no sum was allowed for further CMCs “because they may not be necessary”. It is unclear how this sits with the “probability” test for contingencies in Yeo.
These cases raise as many questions as they provide answers. Unfortunately this is far from the last word on the thorny subject of cost budgeting in practice.
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