Erring on the side of caution: filing costs budget in quantum-only litigation
Monday, 24th October 2016
It was St Jerome who once counselled that the scars of others should teach us caution. Although 1,500 years have passed since the ancient scholar penned this proverb, solicitors would do well to heed the warning of the recent case of Jamadar v Bradford Teaching Hospitals NHS Foundation Trust  EWCA Civ 1001.
The case involved a high value claim for clinical negligence. The Claimant issued proceedings in the County Court at Northampton and the Defendant served a defence denying liability. The Court then sent a notice to the parties pursuant to CPR 26.3 stating that the case was now a defended claim, that it appeared that the case was suitable for allocation to the multi-track and that the parties must file directions questionnaires. Shortly after receiving that notice, the Defendant admitted liability. The Court then ordered that the notice be revoked, judgment be entered on liability and there be a case management conference with two hours allowed for the hearing (the "First Order").
The Defendant's solicitor then went about preparing its directions questionnaire, draft directions and costs budget, and duly sent them to the Court and the Claimant's solicitor. Despite a number of chasing requests, the Claimant's solicitor chose not to file and serve its own budget as judgment on liability had been entered. At the CMC, the District Judge approved the Defendant's costs budget and, upon noting that the Claimant's solicitor had failed to serve one, ordered that the Claimant's recoverable costs be confined to court fees.
The Claimant made an appeal to a District Judge, which was rejected. On appeal to the Court of Appeal, the Claimant argued that the costs management rules did not apply because the case ceased to be a multi-track case after the First Order and because this was quantum-only litigation. Considering the first argument, Jackson LJ found that the case was self-evidently a multi-track case; the claim was for £3 million, the parties had agreed that there should be five experts on each side and a two hour CMC has been listed. Considering the second submission, the fact that the case had become quantum-only did not take it out of the costs management regime; quantum only litigation could be very expensive, especially when it involved five experts on each side. Therefore, applying the costs management rules as they were in May 2014, the Court of Appeal found the Claimant was required to serve a costs budget and dismissed the appeal.
This case is a salient reminder of the potential consequences of falling to file a costs budget, even when a party is of the view that one is not required. The lesson from this case is clear: if you are in any doubt about whether costs budget is required, file one or ask the court for confirmation before the deadline expires.