On 27 January 2015 the Queen's Bench Division of the High Court (Warby J) rejected the defendant's submission that the successful claimant in a preliminary issue trial should not be awarded its costs (just over £24,000) because its approved costs budget did not include the preliminary issue and because it had failed to serve a statement of costs on the defendant.
Warby J held that:
- CPR r 3.18 was not aimed at the situation here, "but rather at ensuring that once the court has reached a decision on what it is reasonable for a party to spend on a given phase that conclusion should be final in the absence of some good reason". The claimant had included provision for a preliminary issue trial in its original costs budget, but this had been neither agreed by the defendant, nor approved or disapproved by the master at the case management conference.
- Even if CPR r 3.18 applied, there was good reason here to depart from the approved budget and allow recovery of some costs by the claimant. The claimant did budget for this phase before the CMC, and the master did not disapprove of that figure. The defendant's budget had been agreed by the claimant and noted by the master (so there was an imbalance between the parties). Finally, the claimant did submit a revised budget, but the defendant's solicitors failed to respond until shortly before the hearing.
- The claimant's failure to serve the defendant with a copy of the statement of costs filed at court, in accordance with PD 44.9(5), did not justify withholding costs.
- In conclusion, the claimant could recover 90% of reasonable standard basis costs. There was a deduction for the additional costs incurred by the defendant as a result of the claimant's failures, including its failure to serve a costs statement on the defendant.