Costs Budgeting – Rock & Roll Back Again – Sir Cliff Richard OBE v British Broadcasting Corporation and Chief Constable of the South Yorkshire Police  EWHC 1666(Ch).
In what we can safely now say is “a thing”, we have yet more assistance in understanding costs procedure from the Courts arising from a case involving a rock ‘n’ roll star. As with our blog of 8 May 2017 (here) this case involves Sir Cliff Richard. In that blog we took the opportunity to highlight the changes in the rules (particularly CPR 3.15 (4)) enabling the Court to make comment on the incurred costs included within any Budget. Now we have the outcome of the CCMC in Sir Cliff’s case with some very interesting views expressed by Chief Master Marsh as to how the Court should approach the issue of commenting – Sir Cliff Richard OBE v British Broadcasting Corporation and Chief Constable of the South Yorkshire Police  EWHC 1666(Ch).
COMMENTING ON INCURRED COSTS
He noted that the ability to make a comment was a discretionary power and that the discretion is a broad one. There is a lack of information within the Practice Direction as to when a comment could or should be made, but it was clear that any such comment falls short of being binding on a Costs Judge upon assessment. The Chief Master felt that it was clear that it was entirely open to such a Costs Judge, having taken any such comment into account, to disagree with it if a different picture had emerged at the assessment.
Picking up on the express requirement that budgeting is not a detailed assessment in advance, but rather a consideration of whether the budgeted costs fall within the range of reasonable and proportionate costs, he noted that “the exercise is necessarily a summary one that often has to be undertaken briskly”. He went on:
“ Both the notion of a ‘budget’ which looks into the future, which is unknowable, and a ‘range’, indicate that the approval can only be undertaken at an impressionistic level,….. in a claim like this one, the variables that may affect the level of future costs are considerable”
The Chief Master therefore felt that a degree of caution was appropriate before the Court made any comment about incurred costs, particularly given the limited information available during the course of the budgeting exercise.
Counsel for the BBC had urged the Court to register its strong disapproval of the Claimant’s incurred costs saying that they were unreasonable and grossly disproportionate. He was asked to formulate the comment which he wished the Chief Master to make and it was this:
“The incurred costs based on information available appear to be excessive and disproportionate“.
Noting that the incurred costs were in excess of £1.1 million, the Chief Master nevertheless felt that it was not possible for the Court to form any meaningful view at that time as to whether the costs were unreasonable and disproportionate let alone significantly or substantially unreasonable/disproportionate. He went on:
“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”. If the court wishes to record a comment that the incurred costs are “excessive” or they are “unreasonable and disproportionate” it will wish to be sure that the comment is made on a sound footing, rather than impression, because commenting is quite unlike the exercise of approving a figure per phase for future costs. The court will also wish to consider the utility of making a comment unless it is specific and well-founded.”
He felt that there was no significant benefit from making such an “anodyne” comment, but there was, on the other hand, a significant risk in making any such comment that it may be given disproportionate weight upon assessment even though it was based upon limited information. In those circumstances, it was far better to leave the issue to detailed assessment. He explicitly rejected the submission that in the absence of any such comment the Costs Judge would proceed on the basis that the incurred costs were both reasonable and proportionate describing such a suggestion as “fanciful”.
Accordingly, he declined to express any comment on the incurred costs.
FEE FOR BUDGET PREPARATION
A request was made to allow more than the percentage allowance for preparation of the Budget on the basis that the work involved was “exceptional”. The Chief Master noted that yet again there was no guidance as to what “exceptional” means, but taking account of the fact that 2 budgets had been prepared in advance of the CMC on the basis of a potential split trial and redrafting of the Budgets following the earlier CMC and the additional work caused by the request by the BBC for comments to be made on the incurred costs, he felt that it was proper to regard the circumstances as exceptional. He said
“I do not consider that “exceptional” means wholly exceptional, but it means something to the effect that the circumstances are significantly out of the norm. The fact that a case may involve further unexpected work is not of itself a circumstance which is exceptional, but the factors I have indicated, taken together, and in particular the issue relating to comments, should take this case into the exceptional category and I will, therefore, lift the cap”
The Judgment is of some interest in relation to the comments made on the costs claimed within various phases, but we will leave this consideration of the case with one further comment in relation to the relevance of the other party’s budget:
“As a starting point, it seems to me that costs budgeting is not a directly comparative exercise and there can be good reasons, in many cases, why one budget is higher or lower than another budget. There can be market considerations or, indeed, just simply a different view is taken by the party preparing the budget about the likely amount of time.”
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