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Costs Budgeting: A Cautionary Note

In a previous blog post on post-Jackson costs budgeting, we commended the reforms for their commitment to aims of parity, proportionality, and managed risk.

But as ever, it is necessary to consider shifts in the legal landscape from all perspectives – and perhaps the time has come to sound something of a cautionary note.

Whilst it remains the case that the over-riding aims of the Jackson Reforms are to be broadly welcomed, solicitor Richard Harrison’s excellent article in the New Law Journal challenges some of the positive responses to the demands of costs budgeting. He notes that though the idea of litigation being minutely project-managed is an appealing one, the reality is infinitely more complex, with funding difficulties frequently caused by clients, and the opposition – however apparently amenable – ultimately aiming to undermine a case.

Harrison writes: “It has been said many times that a piece of litigation is like a construction project. However, not many buildings are put up while trying to avoid the malign attentions of a wily demolition expert. The analogy to quantity surveyors is misplaced.”

Reserving particular scorn for Precedent H (whilst avoiding the childish observation that the unfortunate name recalls a certain topical ointment), he says: “The producer of the form appears to be a technical spreadsheet expert with only a limited classroom exposure to the theory of civil litigation.”

The article bears close reading. It examines costs budgeting matters from a range of perspectives, including the imposition of artificial ‘stages’, the need to consider contingencies, and the difficulties with calculating hourly rates and counsel fees.

In Harrison’s view, costs budgeting is not so much a question of the precise stages of project management, but more a case of crisis-management. Perhaps it is best to envisage approaching the task not sporting a sober charcoal suit, but rather a hi-vis jacket and hard hat.

Whatever your general view on the implications of the Jackson reforms, one element remains unarguably the case: it is essential that firms are absolutely clear on the costs implications of all aspects of case preparation. Firms should contact a litigation support partner such as Legastat at the earliest possible stage, to establish the budgetary implications of essential elements such as e-Discovey and e-Disclosure. In the post-Jackson era a failure to do so carries risks beyond a mismanaged budget, and can have lasting consequences for clients.