High Court judge Master McCloud recently explained that solicitors need to follow a new range of rules and regulations when budgeting for a court case. She stated that, following recent issues related to budgeting:
“Budgeting is something which all solicitors by now ought to know is intended to be integral to the process from the start, and it ought not to be especially onerous to prepare a final budget for a case management conference (CMC) even at relatively short notice if proper planning has been done.
The court must now, as part of dealing with cases justly, ensure that cases are dealt with at proportionate cost and so as to ensure compliance with rules, orders and practice direction. The stricter approach under the Jackson reforms have been central to this judgment.”
Master McCloud’s reference to the ‘Jackson reforms’ references new financial rules implemented by Lord Justice Jackson on the 1st of April. The new regulations were aimed at improving transparency regarding budgeting for court cases.
There are three principles that are central to the new rules, each aimed at increasing transparency and clarity for clients taking part in court cases. They are
- That each party in a court case needs to prepare a complete costs budget to present to the court.
- That both parties need to submit their budgets to the court for examination and approval. This occurs before the first case management conference.
- That the court needs to oversee the case and compare expenses to the budgets submitted by both parties.
As the reforms to budgeting are now over six months old, it’s easy to see why Master McCloud has taken such a firm approach to making sure solicitors comply with the rules.
Solicitors have been aware of the new laws for some times. In 2010, former chief whip Andrew Mitchell M.P. took part in a case that put the laws under the spotlight, as his libel case against News Group Newspapers was compromised by a series of budgeting issues.
In Mitchell’s case, the errors were made by his legal team, which failed to submit a compliant budget prior to the case hearing. In his case, the failure to comply with the rules and regulations had serious costs for his case.
Since budgets are agreed upon through collaboration between both sides of a court case, it’s important for solicitors to take a straightforward and honest approach to preparing a budget prior to their case.
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This article was written by Vannin Capital. Visit their website to find out more about business litigation.