(1) Jonathan Parish (2) Brian Ogden –v- The Danwood Group Limited [2015] EWHC 940 (QB)

Posted on Wednesday, June 24th, 2015

Picture of Lee Whitehead a Costs Draftsman at Paramount Legal CostsRequest by the Defendant to amend their Precedent H costs budget at the Trial was denied.

The Claimants brought an action against the Defendant for deceit and/or misrepresentation arising from the sale of their shares to the Defendant in 2009.  The claim was ultimately unsuccessful and was dismissed, with costs being awarded to the Defendant, who then made an application to amend their budget to increase the costs to be claimed in three of the phases; Disclosure, Witness Statements and Experts.

The Defendant sought an increase to the Disclosure phase of £8,938.00 to the amount already agreed in that phase, £43,976.30, to reflect what they argued was a “very substantial volume” of disclosure by the Claimants, and to deal with the Claimants requests for additional disclosure.  Shortly before the Trial, the Claimants had made an unsuccessful application for specific disclosure, with costs therefore being awarded to the Defendant.  HHJ Behrens ruled that the costs incurred by the Defendant in relation to the request for additional disclosure fell under the costs of the application and it was therefore not appropriate to increase the budget in this phase.

On Witness Statements, the approved budget stood at £47,071.00, but the Defendant sought an increase of a further £10,000.00 on the basis that that approved figure based on an assumption that four witness statements would be obtained when, in fact, five statements were exchanged.  The Claimants argued that the witness statements themselves were not long and there had not been any substantial developments in the litigation since the initial budget was agreed.  HHJ Behrens agreed with the Claimants and refused to increase the budget.

In the Experts phase, the Defendant sought a very substantial increase in their budget, from an initial figure of £20,000.00 to £69,864.00, more than treble the agreed budget.  The agreed budget had been set before an expert was even identified.  The Defendant subsequently instructed an expert, Mr Plaha, but in his ruling. HHJ Behrens decided that the instruction of Mr Plaha had gone beyond the scope of the Directions and, in any event, Mr Plaha’s report was of “limited assistance” and that none of the costs his report should be allowed.  The request for an increase to the budget was therefore denied.

It is clear from the judgement that the Court took a dim view of a party seeking to amend their budget at the last minute of the eleventh hour.  If a party knows that they have or are likely to exceed any phase of their budget, the Trial is certainly not the best moment to own up to it.  The message is clear:  If you are likely to exceed your budget, deal with it as soon as possible.  If you don’t, you will almost certainly pay a harsh price for failing to do so. 

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