Budget that included overstated hourly rate was “improper”

MXX v United Lincolnshire NHS Trust [2019] EWHC 1624 (QB)

The Claimant’s solicitor overstated their hourly rates in their costs budget. Following the conclusion of the matter the Defendant applied for a sanction under CPR Part 44.11. In the SCCO the Costs Judge held that it was improper:

  • to include incurred costs in a budget comprising anything other than time multiplied by agreed rates; and
  • to claim more than a client was obliged to pay.

However, the Costs Judge did not accept that failures to revise the budget before or at the CCMC were further acts of improper conduct.

The Defendant appealed and six of nine grounds of appeal succeeded. The consequence is that the Master carrying out the detailed assessment will now decide whether the substantial overstatement of the hourly rate in the budget is a ‘good reason’ (within the meaning of CPR 3.18) for departing from the budget so as “to correct any injustice caused by [the] improper conduct”.

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