Costs Budgeting and Underspends: Does Spending Less Create a Good Reason to Depart? — Marbrow v Sharpes
Costs Budgeting — 2020-07-10
This case involved a detailed assessment of the Claimant's costs following a successful personal injury claim against his employer, Sharpes Garden Services Limited. Senior Costs Judge Gordon-Saker addressed three key issues: (1) Whether the caps on recoverable costs in Practice Direction 3E of the Civil Procedure Rules exclude VAT. The judge concluded that the caps do exclude VAT because the costs budget figures used in the calculation do not include VAT. (2) The recoverability of interest paid on a disbursement funding loan. The judge determined that interest paid on a loan for funding disbursements could not be recovered as costs, based on the Court of Appeal's decision in Hunt v RM Douglas (Roofing) Ltd [1987]. However, the court could order interest on costs from a date before judgment under CPR 44.2(6)(g). (3) The Defendant's argument that the Claimant's entitlement to interest should start from three months after the order for costs was rejected. The judge found no particular circumstances justifying a departure from the default rule that interest runs from the date of judgment.
Summary
This case involved a detailed assessment of the Claimant's costs following a successful personal injury claim against his employer, Sharpes Garden Services Limited. Senior Costs Judge Gordon-Saker addressed three key issues: (1) Whether the caps on recoverable costs in Practice Direction 3E of the Civil Procedure Rules exclude VAT. The judge concluded that the caps do exclude VAT because the costs budget figures used in the calculation do not include VAT. (2) The recoverability of interest paid on a disbursement funding loan. The judge determined that interest paid on a loan for funding disbursements could not be recovered as costs, based on the Court of Appeal's decision in Hunt v RM Douglas (Roofing) Ltd [1987]. However, the court could order interest on costs from a date before judgment under CPR 44.2(6)(g). (3) The Defendant's argument that the Claimant's entitlement to interest should start from three months after the order for costs was rejected. The judge found no particular circumstances justifying a departure from the default rule that interest runs from the date of judgment.
About This Analysis
This case summary is part of the Mackenzie Costs case law library, providing expert analysis of significant costs law decisions for legal professionals. Each article examines the key issues, judicial reasoning, and practical implications for costs practitioners.
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