Costs budgets and expert witnesses
Keeping a tight rein on costs at all costs
The new costs management rules in CPR 3.12–3.18 and PD 3E are applicable to multi-track cases commenced on or after 1 April 2013 except in:
- Admiralty and Commercial courts cases
- ‘Such cases in the Chancery Division as the Chancellor of the High Court may direct’
- ‘Such cases in the Technology and Construction Court and Mercantile Court as the President of the Queen’s Bench Division may direct’
Where the costs management provisions apply, all parties (except litigants in person) must file and exchange budgets by the date specified in the notice served under CPR 26.3(1) or, if no date is specified, 7 days before the first case management conference. A party that fails to file a budget will be treated as having filed a budget comprising only the applicable court fees (unless the court orders otherwise) (CPR 3.14).
The costs budgets will, of course, have to include detail of any anticipated expert witness costs. These, along with other costs, must be kept under review as the case proceeds. Where costs budgets are likely to be exceeded, a further application should be made for review. But the court will have the power to manage a party’s costs by making a costs management order under CPR 3.15. Where such an order is made, the court will subsequently control a party’s recoverable costs (CPR 3.15(3)).
So the expert should be on the look out for solicitors asking for an ‘estimate of fees’. In providing the same, the expert will want to be sure that all possible stages of a case are considered. For example, re-examining the client and preparing a supplemental report; reviewing reports prepared by other experts; reviewing documentation; attending case conferences; preparing joint statements; and attending trial to give evidence in person. Of course, your contractual relationship is with your instructing solicitor.
The evolving thinking on expert witnesses and cost budgets is that the expert should prepare a budget that contains explicit assumptions. The other side accepting all the expert opinion would be an assumption that would give a lower estimate. On the other hand, if every point is disputed the subsequent budget would be an upper estimate. This approach will take a little time initially, but once an expert has worked out all the assumption it is likely that framework can be reused in future cases.
Remember, if your agreed terms of engagement stipulate that your cost estimates are not binding, then if the total work exceeds the estimates your solicitor will be contractually liable for the shortfall.