MXX – Costs of the Costs Management Process disallowed

Costs of the Costs Management Process disallowed where the hourly rates put forward in the Costs Budget were significantly higher than those claimed in the Bill of Costs.

In MXX v United Lincolnshire NHS Trust [2018] EWHC B23 the Costs Budget included an hourly rate of £465.00, however, in the Bill of Costs reduced rates of £335.00 and £350.00 were sought.

Master Rowley stated:

“I do not accept that the statement of truth for a precedent H is intended to be a composite statement or one akin to signing an estimate. If that were so, in my judgement, the statement would simply say that the document was a fair and accurate estimate of the costs which it would be reasonable and proportionate for the client to incur in the litigation. But that is not what it says. It specifically refers to incurred and estimated costs separately and it seems to me that a solicitor signing a statement of truth has to consider whether the incurred costs figure is fair and accurate separately from whether the figures for estimated costs are fair and accurate. There is absolutely no reason why the incurred costs figure should not be accurate.”

Master Rowley came to the conclusion that there is in fact no material difference between this case and the case of Tucker and therefore he “levied” the same sanction and disallowed the costs of the costs management elements in the Claimant’s bill.

At paragraph 43 in Tucker, Master Rowley expressed his view as to why the appropriate sanction was to disallow the items claimed in the bill corresponding to the CMO work:

“CPR 44.11(2)(a) indicates a possible sanction of disallowing “all or part of the costs which are being assessed”.

The sums claimed in the bill themselves did not offend the indemnity principle and the Master did not believe that a general disallowance of, for example, a percentage of the overall bill would be appropriate.

Instead, it appeared to Master Rowley that “the egregious aspect of the conduct here related solely to the approach to the costs management of the underlying claim. Consequently,  it was the costs claimed in the costs management activities that should be penalised and, in order sufficiently to mark the court’s disapprobation of Irwin Mitchell’s conduct in this case” he disallowed all of the of the costs management elements, or “non phase” part, of the bill.

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