Litigant In Person Directed To File Costs Budget

Cotham School v Bristol City Council [2024] EWHC 824 (Ch) involved an application for a cost capping order under CPR rule 3.19. The case was a Part 8 claim before the High Court of Justice Business and Property Courts in Bristol, Property Trusts and Probate List (ChD). The parties to the action were Cotham School (the Claimant) and Bristol City Council and Katharine Welham (the Defendants). Katharine Welham, the Second Defendant, was a litigant in person who employed counsel on a direct access basis.

Relevant events and chronology:

• On 2 February 2024, HHJ Paul Matthews handed down a judgment refusing the application for a cost capping order.
• The judge instead ordered pursuant to CPR rule 3.15(1) and (3)(a) that, although the case was a Part 8 claim and the Second Defendant was a litigant in person, all parties were required to file and exchange costs budgets not later than 21 days before the first Case Management Conference (CCMC).
• The CCMC was arranged for 13 May 2024, with the deadline for filing costs budgets being Monday 22 April 2024.
• The court sent out a standard notice of the CCMC, which included directions stating that all legally represented parties must file and serve costs budgets, and that litigants in person are not obliged to do so.
• The second defendant, who was not represented by solicitors, but instructed counsel on a direct access basis, asked for confirmation that she was under no obligation to file a costs budget.

The Second Defendant’s position was that, as a litigant in person, she was not obliged to file and serve a costs budget, as per the standard directions in the CCMC notice. This was based on the general rule under CPR rule 3.13(1) that litigants in person are not required to file and serve costs budgets, even in Part 7 proceedings.

Decision

HHJ  Paul Matthews handed down this short judgment dealing with the issue.

He found that, although the general rule is that litigants in Part 8 proceedings do not have to comply with costs budgeting (CPR rule 3.12(1)), the court has the power under CPR rule 3.12(1A) to make a costs management order in Part 8 proceedings. Furthermore, under CPR rule 3.13(3), the court has the power to order a person who would not otherwise be obliged to file and serve a costs budget to do so.

The judge referred to Campbell v Campbell [2016] EWHC 2237 (Ch), in which Chief Master Marsh stated that in cases where a litigant in person’s claim is complex and counsel is instructed on a direct access basis, the litigant in person’s recoverable costs may be substantial, and it may be desirable for the court to make a costs management order in relation to their budget.

The judge distinguished the present case from CJ and LK Perk Partnership v Royal Bank of Scotland [2020] EWHC 2563 (Comm), where the court refused to order litigants in person instructing direct access counsel to file a costs budget:

“In the present case, the second defendant similarly does not employ solicitors, but instructs counsel on the direct access basis. From the scale of the costs incurred in relation to the hearing in January this year (on the statement dated 23 January 2024), I know that the usual fees of the second defendant’s counsel are substantial. If the matter goes to a full trial, and she is successful, there will be a significant claim for costs. In the circumstances, it seemed to me appropriate that, although these were Part 8 proceedings, and the second defendant was a litigant in person, everyone, including her, should file and serve a costs budget, as part of ensuring effective costs management.” [8]

He concluded that the Second Defendant was required to file and serve a costs budget in accordance with the court’s order dated 2 February 2024, despite the standard directions in the CCMC notice suggesting otherwise:

“Accordingly, the second defendant is covered by the order which I made on 2 February 2024, and the direction by court staff in standard form to the contrary in the notice of hearing is erroneous in relation to this case. I am sorry if the second defendant was misled by this. But she too must file and serve a costs budget.” [9]