So what then constitutes ‘significant development’ to justify the filing of a Precedent T: BDW Trading Limited v Lantoom Ltd (2020) Costs LR 1597 case commentary.

In the matter of BDW Trading Limited v Lantoon Limited, the High Court were asked to consider the interesting concept of ‘significant development’ which justifies a party in proceedings to revise their approved costs budget. The question before the Court was whether a five-fold increase in the disclosures was significant enough to revise the disclosure phase and other phases such as witness statements and expert report which were likely to be impacted upon as a direct consequence of the increase in disclosures.

Cost budgets are required to be submitted in accordance with the CPR 3 and Practice Direction 3E in the Precedent H format. In this matter, the assumptions within the Claimant’s original costs budget assumed that there will be less than 50,000 of individual documents to be collected and estimated that of no more than 15,000 of those documents will have to reviewed individually.

In their variation request (which was filed in the Precedent T format), the Claimant submitted that they ultimately discovered over 250,000 documents, 70,000 of which they needed to review individually. Citing this as the ‘significant development’ in the case, the claimant consequently requested a £90,000 increase in profit costs for their disclosure phase. The Claimant’s request was initially rejected by the Defendant.

Soon after the claimant applied for approval of the revisions and increase to their approved costs budget. The Claimant and the Defendant ultimately agreed upon a consent order which allowed the £90,000 increase in profit costs for the disclosure phase, an £8,500 increase for expert reports and a simultaneous £70,000 increase for the defendant’s disclosure phase.

The Claimant also requested a £55,000 increase for the witness statement phase in an attempt to cover subsequent solicitor time expenses, which was understood to have been a direct consequence of the five-fold increase in disclosure. Again, the Defendant disputed this proposed revision, arguing that these extra costs were covered in the £90,000 increase for the disclosure phase. Thus, the claimant submitted an application to the court, which was brought before Justice Kerr.

The Claimant’s solicitor served a witness statement accompanying their application which outlined the need for further expert witnesses and expert expenses as well as additional visits to different sites. In total the Claimant’s revised budget was just shy of £1 million, whereas, the Defendant’s revised budget was just over £900,000.00.

Justice Kerr found that the budget increase for the witness statement phase was quite extortionate and allowed £40,000.00 in respect of the Solicitors time costs and £10,000.00 in Counsel fees. The Judge also allowed £20,000.00 overall for the Defendant’s witness statement phase. In terms of the expert report phase, the Judge was of the opinion that the experts’ need to visit multiple sites was not a significant development in itself nor a consequence of the unforeseen additional documents in the disclosure phase. The amount requested for counsel’s fees of £25,000, was reduced to £15,000 and £4,000 of the £5,800 sought for the quantum expert’s fees was granted. Furthermore, the Judge allowed £24,000 in respect of the Claimant’s structural expert and £15,000 for its materials expert – in each case these were around half the amounts sought in the revised costs budget.

Overall, I believe that Justice Kerr was fair in his judgement and interpretation of the ‘significant development’ concept, despite case law being significantly vague on this issues. The five-fold increase of disclosure cannot be discredited in its impact on other phases of litigation i.e witness statements, expert report and possibly Trial preparation and Trial. His use of GSK Project Management Ltd v QPR Holdings Ltd (2015) is a demonstration of his regard in pursuing a reasonable and proportionate variation in cost budgets. Arguably, the adjustments made in CPR and Practice Directions, however minimal, will have an unforeseen impact on the course of justice and further cost management proceedings. However, that being said, can the more skilful lawyers work their way around this clause and justify their claims? What will be the reprimands for those who get caught? The significance of the changes are undoubtably intriguing and only time will reveal.

How Can Dynamic Costs Assist?

Here at Dynamic Costs we are highly experienced in advising and assisting with costs budgeting and disputes in relation to drafting of the Precedent T and the application and witness statements seeking permission to revise the costs budget.

Should you wish to discuss your costs query with us, please contact us on 0121 827 3759 or Alternatively, you can complete our online query form and we will contact you to discuss your query further.