Mat Knight asks, ‘are costs reasonable and proportionate simply because they fall within the scope of an approved budget?’
The answer to this question appears to be no in light of the recent case of Troy Foods –v- Manton [2013] EWCA Civ 615, in which Lord Justice Moore-Bick gave permission to appeal a costs management order made by HHJ Kaye QC in the Leeds Mercantile Court pursuant to the pilot scheme contained in Practice Direction 51G (Costs Management in Mercantile Courts and Technology and Construction Courts).
The case related to a claim for damages for breach of contract. Proceedings were issued in May 2012, and following revised budgets being produced by both parties in light of their comments in relation to the original budgets, the matter came back before the court at the adjourned case management conference on 18 December 2012.
HHJ Kaye QC approved the whole of the Defendant’s budget, but only approved part of the Claimant’s budget which included the elements relating to the witness statements and Counsel’s fees.
The Defendant felt that HHJ Kaye QC adopted the wrong approach and was too generous in approving the amounts allowed in the Claimant’s budget for preparing witness statements and Counsel’s hourly rate.
The Defendant’s concern was that, on a detailed assessment, costs judges are likely to treat the approval of a budget, or any relevant part of it, as ipso facto establishing that the costs incurred in respect of the matter generally, or that particular elements of it, are reasonable if they fall within the approved budget.
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