Murray; Stokes v Neil Dowlman Architecture Ltd. [2013] EWHC 872 (TCC)

Key areas: ATE; costs budgets; relief from sanction; success fee; High Court

This was an application concerning amendments to costs budgets, and relief from sanction.

The Claimants’ solicitors acted on a CFA with ATE, and a Notice of Funding was served.

Budgets were served at the first CMC.  The Claimants’ did not comply with the correct formatting, but had enough information for the Judge to say that it “substantially” correct, and approved it in the sum of £82,500.00.

A month later the Defendant’s solicitor informed the Claimants solicitors that their budget made no reference to it excluding ATE or a success fee and so they “intend to argue… that your client should not be permitted to recover any sum” greater than the budget.

The Claimants then issued an application to amend.

The Defendant submitted that it should be rejected because the original budget was “inadequate” due to it not mentioning the success fee or ATE; and that to amend it would make costs management “meaningless” because there would be nothing to stop applications to amend.

However, the Court held that the Defendant was fully aware that ATE and the success fee were in existence; and their issue around shortly after the CMC.  Therefore, there was no prejudice.  The Court noted that the correct budget format has tick-boxes for excluded items, including ATE/success fees.  It also noted that the updated budget specifically excludes ATE/success fees, as well as VAT and court fees.

Therefore, the application was allowed, but because it was due to the Claimants’ error, the Defendant was awarded costs of £3,824.20.

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