Master Brown today handed down his reserved judgment in PXT v Atere-Roberts [2024] EWHC 1372 (KB) – a decision that will be of interest to those involved in high value personal injury claims on behalf of children which would not be automatically costs budgeted. The decision may also be of assistance to those seeking costs management of other commercial claims that would not be automatically subject to costs management.
The Claimant was hit by a car driven by the Defendant in October 2021. The Claimant was nearly 11 years old at the time of the accident. She suffered a number of injuries the most significant of which was a serious brain injury. The neurologist was not in a position to provide a prognosis until at least 2026. The claim was estimated to be worth in excess of £10m.
The claim had been issued in 2022 and in June 2023 Master Brown had given comprehensive directions up to the next CMC, which was expected to be in or after May 2025. He had also made orders for the provision of costs estimates by the Claimant up to the next CMC and had indicated that any application for costs management could be made at the May 2025 CMC
Whilst the Claimant's solicitors provided the costs estimates ordered they had proved to be wholly inadequate and on subsequent applications for interim payments the costs estimates greatly exceeded those given previously. The inaccuracy of the estimates provided and the amount of the costs said to have been incurred prompted the Defendant's insurers to apply for an order for costs management at an earlier date than May 2025.
It was accepted that the Judge had a discretion whether or not to order costs management notwithstanding the fact that costs management did not apply automatically to such claims on behalf of children. The issue was whether the Judge should in the exercise of his discretion order costs management and obviously the facts of the particular matter were determinative of the way in which the discretion was exercised.
It is interesting to note that the Judge, who it will be noted sits as both a King's Bench Master and a costs judge in the SCCO, referred to 2 decisions in commercial matters1 where costs budgeting was ordered notwithstanding the fact that the amounts of the claim took the cases out of the then automatic costs budgeting regime. He referred to dicta from those decisions emphasising the utility of cost budgeting in overall saving expense.
Master Brown also had to consider the decision of Master Cook in CXS v Maidstone and Tunbridge Wells NHS [2023] EWHC 14(KB) a decision which the Claimant submitted concerned very similar facts and involved another child that had suffered a brain injury. Master Brown did not consider that the decision in CXS was a precedent that bound him and in any event distinguished the same on the facts of the case.
What concerned the Defendant, those concerns being accepted by Master Brown, were the hourly rates claimed (very significantly in excess of GHR), extent of possible over involvement of solicitors in matters such as rehabilitation and implementing care regimes, insufficient delegation of work and c the sheer amount of time claimed in respect of, for instance, considering documentation.
The Claimant submitted (and interestingly it was the same leading counsel and solicitors who had successfully opposed costs management in CXS) that there were too many uncertainties in the prognosis and in relation to other issues such as education, housing and indeed the mental health of the mother, who was the litigation friend, to render costs budgeting appropriate.
Whilst Master Brown accepted that there were sound policy reasons why children's claims should be exempt from automatic costs budgeting he saw no difficulty in budgeting such a claim, particularly as the Defendant had suggested that the budgeting be done in phases. There was a reasonable expectation that there could be an assessment of damages within a reasonable period for costs budgeting purposes. The Defendant's concerns provided compelling justification for ordering costs management. Costs of over £1m were "at the very least concerning". Whilst the case undoubtedly had serious complexities reasonable and safe assumptions could be made for the purposes of costs budgeting. The Judge's decision contains ringing endorsements for the benefits of costs budgeting:
"... costs budgeting is considered an effective form of costs management in other cases. It reduces the risk that costs become excessive and disproportionate, and reduces the prospect that detailed assessment will be required. It can also be expected to reduce the costs of dealing with costs issues and provide some transparency as to the parties' respective liabilities in respect of costs and this, in turn, can enhance settlement."
Costs budgeting would also address the Defendant's concerns "that the partner in particular is stepping outside of the appropriate areas of work of a litigation solicitor and into work of managing the case manager and treating team. Managing costs through budgeting will help set the boundary or at least allow thought to be given to the boundary between litigation services and non-litigation services."
Leaving costs to a detailed assessment is not a sufficient protection to the Defendant particularly when the court could manage the costs at this stage. The fact that the claim involved a child and was a high value claim did not avoid the need for litigation to be conducted proportionally and at reasonable cost.
The Judge also touched on the issue that if QOCS applies in detailed assessment proceedings, which it appears to pending a possible appeal in another matter, then the Claimant and her solicitors may well have a "free hit" in any detailed assessment if the claim had been brought before the amendment top the rules with regard to set-off.
The Judge ordered costs budgeting and gave a date for the same within 6 weeks!
Importance of the Decision
The decision will be greatly welcomed by defendant insurers who in such cases have had long held concerns about the level of costs that are incurred.
There is no doubt that costs budgeting can be ordered in such cases but the facts of individual cases will obviously be key factors in the judge's exercise of discretion. If costs information in some form has already been provided and that raises concerns then that will be a very relevant factor. If the court has been able to give detailed directions with regard to the conduct of the matter that may also indicate that the case is suitable for budgeting.
Claimant solicitors will need to consider the extent to which they are incurring costs and their involvement in non-litigation work – which may still be recoverable but which must be reasonable and proportionate.
Obviously on future applications Claimants will seek to rely on CXS and Defendants will seek to rely on PXT. The Judge however will no doubt find that the decision they have to make is one on the particular facts of the case before them!
PJ Kirby KC who appeared for the successful Defendant in PXT.
Footnote
1. CIP Properties (AIPT) Limited (Formerly known as Norwich Property Trust Limited) v Galliford Try [2015] EWHC 3546 (TCC) Coulson J and Sharp others v Blank [2017] EWHC 141 (Ch) Nugee J
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