Kerry Underwood

HOURLY RATES IN BUDGET CAN BE CUT ON ASSESSMENT, OR CAN THEY?

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You can now book onto my Fixed Costs Autumn Tour – here

In my recent blog – HOURLY RATES IN BUDGET CAN BE CUT ON ASSESSMENT

I reported

RNB v London Borough of Newham [2017] EWHC B15 (Costs)

and concluded by saying that it was a poorly argued and illogical decision which should be treated with considerable caution as the logic of it was that an assessing court could simply avoid the Harrison and Merrix decisions altogether by cutting incurred costs and using that as a “good reason” to cut budgeted costs.

Michael Fletcher has now posted an article saying that at a detailed assessment in Birmingham on Friday 18 August 2017, District Judge Lumb, sitting as a Regional Costs Judge, expressly disagreed with the decision in RNB v London Borough of Newham.

District Judge Lumb held that to reduce hourly charging rates for budgeted costs to the same levels as those allowed for the incurred costs, thereby causing a potential departure from the budgeted phase totals, would be to second guess the Costs Managing Judge and would impute a risk of double jeopardy into the detailed assessment.

The Costs Managing Judge was not fixing hourly rates, but have had regard to them when setting a reasonable and proportionate allowance for each phase of the budget.

Without clear evidence the costs judge simply could not know what the position was.

District Judge Lumb held that the clear philosophy in guidance from the Court of Appeal in

Harrison v University Hospitals Coventry and Warwickshire Hospital NHS Trust (2017) 3 Costs LR424

and

Merrix v Heart of England Foundation NHS Trust [2017] 1 Costs LR91

was to simplify and reduce the scope of detailed assessments and the “good reason” bar was high.

Thus we now have two distinct lines of authority in relation to this issue, just as we do with the other vital costs issue of whether a Claimant gets indemnity costs on late acceptance by a Defendant of a Part 36 offer.

May we have all of these matters cleared up before next year’s October Revolution?

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Written by kerryunderwood

August 23, 2017 at 10:35 am

Posted in Uncategorized

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