2. The personal injury and cost drafting areas of the legal profession have undergone
responding to these changes positively, by growing our business and positioning
Senior Manager - Costs
In this role you will establish and drive the
development of a new costs team and strategy within
Minster Law. Using your industry knowledge and
experience you will be responsible for developing
processes and best practice for costs drafting and
implementing them across the business. As a Senior
Manager you will work with the Complex Claims
department and wider operation to ensure a robust
business plan is developed and constantly reviewed
in line with our overall business strategy.
The team will focus on delivering costs for our
Complex Claims department, covering multi track and
Catastrophic Injury RTA, EL and PL. We have a strong
culture of working together and a large part of this
role will be to ensure relationships are built between
the costs team and the wider operation. Following
your appointment you will be integral to the selection
and recruitment of the costs team ensuring the right
balance of experience and technical knowledge.
You will have a proven track record of developing
innovative and commercially minded strategies, and
have the ability to communicate and present at all
levels. Whilst experience in high value personal injury
costs would be an advantage, this is not essential
and we are open to applications from those with
commercial costs experience. Ideally you will be a
Member of the Association of Costs Lawyers and it is
essential that you have previous experience managing
and developing a costs team.
Minster Law offers a competitive salary, contributory
pension scheme, 30 days’ holiday, life assurance,
To apply for one of these roles please visit our
or alternatively please email a copy of your CV to
Careers in
black and white...
LONDON £55,000+
COMMERCIAL COSTS LAWYER
An international law firm are looking to add
to their in-house costs team in their London
offices. You will be a Costs Lawyer, or working
towards this status and you’ll be dealing with
a predominately defendant caseload consisting
of complex commercial matters. An excellent
opportunity offering a competitive salary,
great benefits and the chance to work for
a top law firm.
MANCHESTER £50,000+
IN-HOUSE COSTS LAWYER
A well established solicitors practice in
Manchester are seeking a Costs Lawyer to join
their in-house costs department. They are
looking for an experienced Costs Lawyer
with at least 3 years’ experience to undertake a
claimant costs caseload. Your duties will
include drafting schedules and costs
budgets, negotiating settlement, drafting
replies to PODs and supervising junior
members of staff.
LONDON £40,000+
COSTS LAWYER
A leading costs firm in London are looking for
a Costs Lawyer to add to their busy costs team.
You will ideally have at least 5 years’ costs
experience, and claimant or defendant
experience is welcome. You will be undertaking
a good quality caseload with an emphasis on
complex, high value personal injury and clinical
negligence matters.
MANCHESTER £40,000+
COSTS LAWYER
A successful costs company in Manchester are
looking for an additional member of their team.
You will ideally be a Costs Lawyer or Solicitor
with at least 3 years’ experience. You will be
undertaking a good quality claimant caseload
with an emphasis on high value clinical
negligence and commercial matters.
They are a very forward thinking firm so
they're looking for someone up to date with
recent changes in the law. Excellent salary on
offer and great development.
MERSEYSIDE/ LANCASHIRE £30,000+
TRAINEE COSTS LAWYER
Our client, a busy and expanding costs firm, are
looking to recruit additional costs candidates to
add to their team in their Merseyside/ Lancashire
offices. They are a multi office firm looking for
experienced draftsman with particular experience
of dealing with personal injury, industrial disease
and clinical negligence claims. An excellent
opportunity to join a successful and growing
firm with a competitive salary and friendly
working environment.
SOMERSET £30,000+
COSTS LAWYER
Are you an experienced Costs Lawyer with
experience of legal aid billing? A reputable costs
firm in Somerset are looking to add to their
established team in Somerset.The ideal candidate
will have at least 4 years’ costs experience with
particular experience within publicly funded civil
and family costs matters. There is also the
opportunity for flexible working hours/working
from home for the right candidate.
For further information on these and any other vacancies – or for general career or salary advice – please contact Claire Heshon on 0161 745 7517
Manchester Office
Armstrong House
1 Houston Park
Manchester M50 2RP
Telephone:
0161 745 7517
Out of Hours:
07824 661108
Email:
claire.heshon@rbuklegal.com
Website:
www.rbuklegal.com
3. JANUARY/FEBRUARY 2014 | ISSUE 1
16Managementmatters 24Manchesterinmind 32BlackHorserising
03
Regulars
04 News
09 Opinion
17 Legal update
21 Regulatory
Features
08 Mitchell: costs
lawyers react
10 Regan’s way
Professor Regan’s view
on the Jackson reforms
14 Don’t miss out!
ACL member benefits
16 Good
management
Legal practice
management for costs
laywers explained
22 The costs
wars continue
Costs budgeting case law
24 ACL conference:
in pictures
26 Costs budgeting
Steven Green and Simon
Murray provide comment
28 Policy watch
Is the Criminal Bar
under threat?
30 The evolution
of education
Costs lawyer training:
past, present and future
32 Black Horse rising
A fresh look at ATE
insurance premiums
34 Costs on
the agenda
How City lawyers – as well
as clients and judges – are
adjusting to costs issues
Editor’s comment
Contents
CostsLawyer
elcome to the
first edition of
the new-look
Costs Lawyer. Since our
last edition, the magazine
has undergone an
extensive redesign, as
well as seeing a change
of editor and publisher.
IpaytributetotheworkdonebyNeilRose,who,
overthelastfewyears,hashelpedraisetheprofile
ofCostsLawyer.Neilhasconsistentlydelivered
cutting-edgeindependentlegaljournalism
throughouthiscareer,andIhopetoemulate
thatlegacyinmyownsmallway.
Thenewmagazinewillfeatureexpanded
andenhancedcoverageofarangeofpractical,
managerial,regulatoryandtechnicalareas
ofinteresttocostslawyersandtheirclients.
Itwillfeatureprofilesofkeypersonalitiesinand
aroundthecostscommunity,andinformationon
gatheringtrendsandkeybusinesssectorsrelevant
tothatcommunity.
Itwilloffersummarisedlegalupdates,aswellas
adviceandinformationoneducationandcareers
relevantfortraineecostslawyersstartinginthe
profession,aswellaspracticedevelopmentfor
establishedpractitioners.
Itwillfocusonthekeyregulatoryandlegislative
changesaffectingcostslawyersandtheirclients,as
wellaslookingatnewbusinessopportunitiesin
costs;particularlythoseaffectingcostslawyers
andwhattheACLcandotoassistthem.
Theredevelopmentofanexpandedbi-monthly
magazine is core to a programme of change that
the ACL Council has approved to modernise
and professionalise the organisation, alongside
the new eBulletins and the Twitter account –
follow us @CostsLawyers.
Membersinterestedinsubmittingmaterialfor
themagazineshouldcontactme,BenRigby,on
ben.rigby@btinternet.com
Welcome,again,tothenewCostsLawyer,and
wishingyouamerryChristmasandahappy
NewYearfor2014.
BenRigby,Editor
Editor Ben Rigby
ben.rigby@btinternet.com
Chairman
Murray Heining
Vice Chairman
Philip Robotham
Treasurer
Stephen Averill
Secretary
Claire Green
Council members
James Barrett
Robert Connelly
Sue Nash
Chief Executive Officer
Maurice Cheng
All other enquiries to
Diane Pattenden
enquiries@costslawyer.co.uk
Closing date for March/April issue
will be 15th January 2014
Visit the ACL website at
www.associationofcostslawyers.co.uk
Costs Lawyer is edited and designed by
Archant Dialogue, Prospect House,
Rouen Road, Norwich, NR1 1RE.
Tel: 01603 664 242
ProductionEditor Louise Hoffman
JuniorArtEditor Deb Murray
AccountDirectorCatherineGoad
Creative Director Nick Paul
PublishingDirector Zoë Francis-Cox
ManagingDirector Mick Hurrell
Material submitted for publication
is welcomed by the editor. He is,
however, unable to guarantee
publication in any specific issue
and reserves the right to amend
or edit any article submitted. All
advertisements and contributions are
accepted on the understanding that the
authors are responsible for opinions
expressed and these do not necessarily
represent the views of the Association
of Costs Lawyers or Archant Dialogue,
who do not accept any liability for any
error, omission or misstatement by any
contributor in any material published.
Material in this journal is the property of
the Association of Costs Lawyers and
cannot be copied without the written
permission of the editor.
W
JANUARY/FEBRUARY 2014 | ISSUE 1
4. 04
Lord Dyson sends ‘clear
message’ by dismissing
Mitchell costs appeal
News
The Court of Appeal has
dismissed Andrew Mitchell MP’s
appeal against orders made by
Master McCloud, following his
initial late submission of a costs
budget, in a key test of the
judiciary’s approach to the
management of litigation.
In delivering the judgment, Lord
Dyson MR said the central question
was “how strictly should the courts
now enforce compliance with
rules, practice directions and
court orders?”
The judgment
A failure to comply with rules on
costs budgeting through lack of
awareness alone will not wash; as
Dyson said, “CPR 3.14 did not come
as a bolt out of the blue”.
Dyson added that “the purpose
of costs management (including
costs budgets) is to enable the
court to manage the litigation and
costs to be incurred so as to
further the overriding objective”.
He noted that, whilst the new
approach is not an extreme one
where relief will only be granted in
exceptional circumstances, it
should be granted “more sparingly
than previously”.
Thecourts,heheld,shouldhave
greaterregardfor“theneedfor
litigationtobeconductedefficiently
andatproportionatecost”.
Reasons for relief
Dyson was clear that “trivial non-
compliance” would normally lead
to relief from sanctions. If it is not
trivial, and “there is a good reason
for it, the court will be likely to
decide that relief should be
granted”, he said, but added:
“Merely overlooking a deadline…
is unlikely to be a good reason.
“Well-intentionedincompetence,
forwhichthereisnogoodreason,
shouldnotusuallyattractrelief
fromasanctionunlessthedefault
istrivial,”notedthejudge.
“It was a robust decision,” he
acknowledged, “[but] the defaults
by the claimant’s solicitors were
not minor or trivial and there was
no good excuse for them.”
“Although it seems harsh,” to
have granted relief would have
meant “the attempt to achieve a
change in [litigation] culture would
receive a major setback”.
Commercial
silkcriticises
theLord
Chancellor
In his keynote address at the
Bar Council’s annual conference,
Lord Pannick QC critiqued plans
for legal aid reform and told his
audience that Lord Chancellor
Chris Grayling should
“acknowledge that the work of
lawyers on criminal legal aid is
demanding… and that it is already
poorly paid”, adding: “The Justice
Secretary should not be
promoting the absurd myth that
legal aid work is a pathway to
riches,” and he “should not be
party to the peddling of the lazy
fiction that seeks to demonise
legal aid lawyers as ‘cashing in’”.
The MoJ maintains that, at
around £2 billion a year, the UK
government has “one of the most
expensive legal aid systems in the
world” and efficiencies are
needed for it to be sustainable.
The London Solicitors Litigation
Association (LSLA) has released a
survey, conducted jointly with the
New Law Journal, illustrating
considerable scepticism as to the
extent of any positive change
following Lord Justice Jackson’s
recent reforms, but also
opportunities for costs lawyers.
Ninety-three per cent of
respondents, from mostly larger
firms, suggested that the reforms
would decrease access to justice.
Fifty-five per cent of firms had
carried out internal training to
prepare costs budgets in
accordance with the new rules,
with 12 per cent recruiting
additional costs lawyers to deal
with potential budgeting issues.
Manyfirmsadmittedto
enhancingITprovisionaswellas
“burnishing[their]relationshipwith
costslawyers”,sayingthatthey
were“workingmorecloselywith
costsconsultantsinpreparingForm
H”andrecruitingcostslawyersto
adviseonamonthlyretainer.
Researchshowsthat
costsconcernsare
centraltoLondonlitigators
AsurveyconductedbytheLSLAsuggests
scepticismoverLordJusticeJackson’sreforms Sixty-nine per cent of
respondents felt costs budgeting
would increase costs, in spite of
the CPR’s express provisions to
keep the costs of budgeting to
between one and two per cent
of the budget sought.
Most litigators admitted to having
reviewed their strategy, with one
citing “a revised approach to risk
assessment, and new IT systems
to deal with costs budgeting”.
Client outcomes were also
factored in, with firms “setting out
the new costs budgeting and the
fact that they are now more likely
to have to pay a large shortfall
between costs incurred and the
costs budget approved by court”.
That, for others, meant “getting
the client to accept the risk
where [litigation] steps are cost
constrained”, and “reviewing
tactics in relation to opponents’
budgeting”.
Thirty-four per cent of
respondents admitted to
withdrawing from offering, or
restricting the use of, conditional
fee agreements; whilst 71 per cent
of respondents said they had
rejected the use of damages-
based agreements since the
reforms became law.
ISSUE 1 | JANUARY/FEBRUARY 2014
5. Newcostssanctionsdisapplied
Neubergerissueslegalaidcutswarning
Lord Neuberger, the president of
the UK Supreme Court, has warned
of the risks posed to access to
justice by government cuts to legal
aid in a recent lecture.
In a wide-ranging speech at the
recent JUSTICE Tom Sargant
lecture on ‘Justice in an Age of
Austerity’, Lord Neuberger
discussed the meaning of both the
rule of law, and the necessity of
access to justice within it.
On the latter point, he defined
the components to access to
justice, which he said included
“accessible courts”, “effective legal
process” and “affordable justice”
as key principles.
On the last principle, Lord
Neuberger said reduced access
to legal aid might be costly and
disadvantageous for all litigants –
and taxpayers funding the courts
system – whilst also challenging
access to justice for all.
In a renewed warning as to the
consequences of cutting the
Ministry of Justice’s legal aid
budget, Lord Neuberger said
that the cuts “[deprived] the
very people who most need the
protection of the courts of the
ability to get legal advice and
representation”.
He added: “That is true whether
one reduces the types of claim that
qualify for legal aid or increases the
stringency of the requirements of
eligibility for legal aid. The recent
changes have done both.”
The first reported case involving costs sanctions in relation to
Part 36 offers declines to take up the opportunity to apply them
The issue arose in the recent High
Court case of Feltham v Bouskell
[2013] EWHC 3086 (Ch). The
receiving party (the claimant), in
making a relevant Part 36 offer,
accepted during the relevant
period, is entitled to their costs at
the standard basis up to the date
of acceptance.
If they fail to accept the offer,
or fail to receive an outcome in
terms ‘at least as advantageous’
as the offer – at least as good in
monetary terms – unless otherwise
considered unjust, the court can
order sanctions.
These include an order for
indemnity costs, interest on
both damages and costs (both
not exceeding 10 per cent above
the base rate) from the expiry
of the relevant period, and/or an
uplift in damages of up to £75,000
in damages.
In not making the award, the
court had to consider the terms
of the offer; the stage at which
an offer was made, including the
timing of the detailed assessment
hearing; the information available
to the parties; and also the
conduct of the parties in evaluating
the offer made.
The court appears to have been
swayed by the late submission of
the receiving party’s Part 36 offer,
with Brick Court’s Charles
Hollander QC, sitting as a deputy
High Court judge, making three
key findings.
Firstly, the receiving party’s offer
was a last-minute one; the expiry
of the relevant period very shortly
before trial was, the judge felt, a
factor rendering it unjust, as
mentioned above.
Secondly, liability had only
become an issue in delivering
opening statements; and thirdly,
the receiving party only disclosed
important documents on the eve
of the trial.
The decision suggests that
parties wishing to benefit from the
new sanction would do well to
make their offers sooner rather
than later.
The Royal Courts of Justice
NEWS IN BRIEF
Client ignorance breeds
legal pay woes
New US research has shown legal
professionals are seeing their
performance and pay suffer due
to clients not understanding what
it is they actually charge for.
According to Professor Heather
Vough of the Desautels Faculty
of Management, many legal
professionals are failing to
educate their clients on the
services they offer. “This leads
to unrealistic expectations as
to what a professional can offer
a client, and according to our
research is resulting in an
increasing number of
professionals losing work,” he
said, adding: “As well as clients
being willing to pay less, the
performance of professionals can
suffer. If a client isn’t aware how a
professional carries out their
work, their methods can confuse
them, and they will hold back
information as a result – often
making the relationship
unmanageable.”
Manchester mandated
HHJ Hodge QC, the circuit judge
member of the Civil Justice
Council costs committee
conducting the guideline hourly
rates review, told the recent ACL
Costs Conference in Manchester
that ACL members had until the
end of November to submit
responses. “Practitioners have
a chance to inform the process,”
he told delegates, “but only by
submitting their views, supported
by evidence.” There will also be
oral sessions with selected
professional bodies, organisations
and firms in February 2014.
Ramsey to address
IBC conference
In a sign that the judiciary’s
continuing media outreach on
costs issues has not let up, ACL
honorary president Mr Justice
Ramsey will give a special address
to IBC’s Solicitors’ Costs
Conference in January 2014.
Ramsey J has, since April 2012,
become involved in the
implementation of the reforms
arising out of Sir Rupert Jackson’s
Final Report on the Review of Civil
Litigation Costs.
05
News
JANUARY/FEBRUARY 2014 | ISSUE 1
6. 06
News
LordChiefJustice
shinesalightaway
fromLondon
Two speeches by the new Lord Chief Justice
suggest regional justice has a new champion
– including in costs matters
ThomascountersNeubergerhourlyratescomments
News
Proportionality – which was much
discussed in Lord Justice Jackson’s
report on civil litigation funding –
has found in the new Lord Chief
Justice,LordThomasofCwmgiedd,
a regional champion for firms and
sets outside London, it seems.
Lord Thomas delivered his
comments in two recent lectures,
where he emphasised that costs
budgeting and proportionality
would place a greater emphasis
on ensuring regional solicitors
and barristers were instructed
in cases, with London lawyers
only being instructed where
genuinely necessary.
Lord Thomas made the theme
of improving access to justice
outside London a central one
in his Birkenhead lecture – very
appropriate given FE Smith KC,
later Lord Birkenhead, had made
his name both on circuit and in
London in the late 19th and early
20th century.
He said such a move would
“provide access to justice without
the cost of parties coming to
London”, adding that the
centralisation of lawyers in London
was a “serious impediment” to
reducing the costs of litigation.
He added: “Of course a party
is entitled to employ any firm it
wishes in any city, but if the party
does instruct a London firm for
out-of-London work, it should do
so in the knowledge that in the
event of success, it will be
necessary to explain to the court
at the costs budgeting stage or
on any assessment why it was
reasonable to use a London firm
for such a dispute. The differences
in costs are now huge.”
Similar themes were expressed
in support of the regional Bar in
his address to the recent Bar
Conference, in recognising its
worth “not only to the provision
of justice in the towns and cities
outside London but also to the
strength of [those] economies”.
Lord Thomas said: “It is
essential… that you pay serious
attention to the imbalance which…
continues to create a growing
concentration of specialist
practitioners in London,” adding:
“The judiciary will strengthen
access to justice in the great towns
and cities,” including encouraging
“the establishment and nurturing
of specialist practitioners” based
in the regions.
In his annual press conference
recently, the new Lord Chief
Justice Lord Thomas declined to
follow Lord Neuberger’s recent
scepticism on hourly rates.
The president of the Supreme
Court was notably critical, saying
in his recent JUSTICE lecture that
“the centrality of the hourly rate
appears to me to be malign”.
Speaking to journalists, Lord
Thomas said he felt “the piece-
work principle was better”, and that
in his experience “an awful lot of
work was done on a piece-work
time basis, rather than an hourly
rate basis, but that it has crept in.
NEWS IN BRIEF
Provisional
assessment blues
Delegates to the recent Lexis-
Nexis costs conference heard
from Master Haworth, who
acknowledged continuing
concern in relation to provisional
assessment claims. Findings
suggest that those seeking to
avoid paper assessment under
the provisional assessment rules
for claims under £75,000 are
challenging them on grounds of
mis-certification, or misconduct
issues. At the ACL’s recent
Manchester conference, barrister
Nathan Adams said that “the
process was, for the most part,
working as intended”, but that
“overall, provisional assessments
are being conducted with few
challenges to oral hearings”. The
challenges, however, may spring
less from the process and more
from the risk of recovering the full
extent of costs under provisional
assessment – something
highlighted when the original pilot
limit of £25,000 was increased in
spring 2013.
Forregularnewsupdates...
visittheAssociationofCosts
Lawyerswebsiteorsubscribe
totheweeklyemailupdateat
editor@costslawyer.co.uk
“Most commercial clients would
use hourly billing as a guide, but
then look back and
say, ‘Well, this is
what the work is
worth’,” he added.
Lord Thomas also said that
clients would assess “how long
it takes the competent and
average practitioner to do
something; not the slow
and inexperienced person”,
concluding: “Hourly rates have
their place, but the difficulty is
that we have never really
thought how we could
substitute a system of
piece-work for the huge
variety of civil work
we do.
“In crime the
great virtue of the
graduated fee
system is that it basically works
on a piece-rate basis.”
In the same press conference,
Lord Thomas also referred to the
need for greater flexibility in the
use of IT and court facilities, as well
as noting: “I have always taken the
view that you cannot allow fees to
drop to a level that does not attract
people of sufficient ability” to
the Bar.
There was a need, he said, to
ensure that those at the privately
funded Bar were able to support
publicly funded colleagues,
“for the whole of the profession;
something that people forget”.
Lord
Neuberger
Lord Thomas
ISSUE 1 | JANUARY/FEBRUARY 2014
7. 7th February 2014
Costs Seminar
London
9-10th May 2014
ACL Annual Costs
Conference
Park Plaza Riverbank Hotel,
London
Keep an eye on the ACL
website for further details
and booking forms.
www.associationof
costslawyers.co.uk
Datesforyourdiary
Change of address
Mike Fitsell, formerly of Crown
Costs Consultants, is now with
Knapp Richardson, 3rd Floor
Chancery Lane, 53-64 Chancery
Lane, London, WC2A 1QU
0207 831 9082
lawcosts@knapprichardson.co.uk
DX: 0029 CHANCERY LANE
07
News
ACLbackscalltomakecosts
workareservedlegalactivity
The Association of Costs Lawyers
(ACL) has strongly endorsed the
recommendation of leading
academic Professor Stephen
Mayson (pictured right) that law
costs work should only be carried
out by properly authorised and
regulated specialists.
In his submission to the Ministry
of Justice’s review of legal
regulation, Professor Mayson
urged a move to focus regulation
on the type of work involved,
rather than who does it, and said
the list of reserved legal activities
– which can only be carried out
by regulated persons – should
encompass those areas of work
where there is either a public
good or consumer protection
justification for doing so.
Classifying law costs work
within the category of ‘activities
connected to the administration
of justice and due process’,
Professor Mayson wrote: “Given
the reserved rights currently
attaching to costs lawyers
(including rights of audience and
rights to conduct litigation in
relation to costs matters, as well as
the administration of oaths), when
shifting emphasis from regulation
by title to regulation by activity,
there could well be a public
interest justification for extending
specific reservation.”
ACL chairman Murray Heining
said: “Professor Mayson echoes
what we have been saying for a
long time. The benefits of using
a qualified and regulated costs
lawyer speak for themselves.
“The Legal Services Act 2007
recognised costs lawyers as a
specialist arm of the legal
profession to ensure that costs are
dealt with expertly. This is a vital
element of the administration of
justice, as is the protection for
clients that regulation brings,
should things go wrong.
“We hope that the Ministry of
Justice and Legal Services Board
take note of Professor Mayson’s
well-reasoned blueprint for
refocusing the current regulatory
regime on what really matters to
clients and the public interest.”
Studentcareerconfidenceincreases
The University of Law’s annual
survey of its students, in
conjunction with The Times, has
shown them to be optimistic about
career prospects.
More than nine in 10 law
students had confidence in the
UK’s economic recovery, with
77 per cent believing that it will
continue to recover slowly during
2014, and 15 per cent asserting
that the pace of that recovery
will increase.
The University of Law (formerly
known to ACL members as the
College of Law) also reported that
more than 60 per cent said
economic uncertainty had had no
impact on their decision to apply to
law school. Indeed, a further 14 per
cent said that it had in fact made
them more likely to study law.
Notwithstanding recent
recommendations as to legal
education and training on
developing apprenticeships and
non-graduate pathways into law,
64 per cent of students said they
would still prefer to study for a
degree, even if they could start
work immediately post-school.
Morethanhalfofstudents
(56percent),however,feltthat
themajorityoflawdegreeswere
tooacademic,andshouldinclude
morevocationaltraining.The
surveyalsorevealedconcerns
aboutwork-lifebalance–something
theACLisabletoaddress.
Philip Robotham, chair of the
ACL’s Education Sub-committee,
said the ACL was “proud of its
inclusive entry requirements for
its Training Course, set against
the criteria of the LETR report”,
adding: “The course equips
students with the tools to engage
in a productive way in the legal
profession from the outset.”
Approximately half of the annual
trainee costs lawyer intake are
graduates. On qualification, costs
lawyers can expect to earn salary
packages equivalent to most NQ
solicitors and barristers. A new
training course is due to be
launched in September 2014.
NEWS IN BRIEF
Guideline hourly rates
With the release of its survey into
guideline hourly rates (GHR),
previously issued by the Civil
Justice Council on 1st November
2013, the ACL’s chairman Murray
Heining called on members to take
part so that any decisions are
based on firm evidence as to the
costs of litigation. He said: “It is
imperative that costs lawyers and
solicitors ensure the committee
has all the information it needs.”
Law Society on the defensive
Chancery Lane says it has got the
best deal possible for criminal
legal aid lawyers, whilst raising
concerns about fee levels in a
number of areas. In its response
to the Government’s legal aid
consultation, Law Society
president Nicholas Fluck said
that “[it] has secured significant
changes to the original proposals
having constructively engaged
with the MoJ since April”, despite
being heavily criticised by criminal
legal aid solicitors for alleged
acquiescence to proposed cuts.
JANUARY/FEBRUARY 2014 | ISSUE 1
9. With many key industry developments
set to be revealed over the next few months,
2014 is shaping up to be an interesting year,
says ACL chairman Murray Heining
Next year will see the
start of a new course for
trainee costs lawyers,
starting in September
“ “
Tipping
points
As we move into 2014, Association of Costs
Lawyers (ACL) members will no doubt be
acutely aware of the number of costs-
related topics of mutual, not to say public,
interest that the organisation has been
involved in during the past year.
Guideline hourly rates
I am sure you will have heard about the recent
Civil Justice Council’s (CJC) survey into
guideline hourly rates (GHR), issued on
1st November 2013; and I hope that as many
members as possible took part in the survey.
As I have said previously, any decisions taken
by the CJC must be based on firm evidence as
to the costs of litigation. This is something that
costs lawyers are uniquely placed to supply, so
I hope you have all completed a questionnaire,
and encouraged your professional clients to do
the same.
With a seat on the committee overseeing the
survey, we will continue to be actively engaged.
As HHJ Hodge said at our recent Manchester
conference, there will be further calls for
evidence from bodies like the ACL, together
with oral hearings in the New Year, before a
report goes to Lord Dyson as Master of the
Rolls in March 2014.
Plebgate and afterwards
At the time of writing we do not yet know the
results of the appeal in Andrew Mitchell MP v
News Group Newspapers [2013] 2355 (QB),
otherwise known as the ‘Plebgate’ libel action.
Costs lawyers will look forward to this result,
which should strengthen the importance of
costs budgeting and push the parties to engage
in the budgeting process.
The case has been chosen as the first under
which the Court of Appeal will consider the
‘new’ approach to relief from sanctions and the
courts’ new, harder line on non-compliance with
the CPR generally.
Mitchell – and similar costs budgeting cases
– suggests that the role costs lawyers play in
working with firms will be better appreciated by
clients and businesses. We are being instructed
earlier, and more regularly.
On media and PR, I hope that you enjoy this
edition of Costs Lawyer. The magazine is now
being produced on a bi-monthly basis by a new
editor, Ben Rigby, who has succeeded Neil Rose,
and it has been relaunched with a new design by
Archant Dialogue, our new publisher.
The magazine will be distributed alongside
regular eBulletins, sent by email to ACL
members. If you have comments or suggestions
about Costs Lawyer, do contact Ben, Diane
Pattenden or Sue Nash – you can find contact
details on page 3.
Our Law Reform Committee has certainly
been busy reacting to the Government’s
response to various consultations, including
regulation, where we have made a strong case
for the regulation of all costs professionals
– one that I hope the Lord Chancellor will
take seriously.
On education, next year will see the start of a
new course for trainee costs lawyers, starting in
September 2014. This follows the decision to
revise the previous course and ensure it reflects
the best contemporary outcomes, forming the
basis of a successful career as a Costs Lawyer.
I congratulate Philip Robotham and his
committee for their hard work.
Each of the committees enables you, the
members, to be well represented, and I urge
you to assist them in their work during the next
12 months, as indeed you have for the last.
2013 has been a busy year for costs lawyers.
I wish members both old and new, and their
families, a very happy Christmas and a
successful 2014. I
09
JANUARY/FEBRUARY 2014 | ISSUE 1
Opinion
As we heard at our recent Manchester
conference, our own standing before the courts
is increasing; so, too, should our value to those
law firms using our services.
Both of these factors will not change,
regardless of what Mitchell decides, but greater
recognition is a step in the right direction.
Regulation and education
In my last column, I reminded members that the
Council had formed committees for education,
PR/media and law reform.
10. ACL conference review
ISSUE 1 | JANUARY/FEBRUARY 2014
10
Professor Dominic Regan spoke at the recent ACL
conference on the subject of ‘The Jackson Reforms –
Whatever Next?’ Here Costs Lawyer presents an
abridged version of his speech, delivered before the
recent decision in Mitchell v News Group Newspapers
Regan’sway
nhisspeechattheACLconferencein
ManchesterinOctober,ProfessorRegan
highlightedanumberofkeyareasthatwill
likelybeofinteresttoCostsLawyerreaders.
First was the rise of the fixed costs regime.
Professor Regan referred to Sir Rupert
Jackson’s belief that “an important brick is
missing from the edifice” of the reforms he
proposed – namely, a universal fixed costs
regime for all fast-track work.
He said that whilst there is a new scheme for
personal injury work, it is his belief, on account
of proportionality, “that all cases should be dealt
with in the same way, using a costs matrix”.
He did, however, note that there are
exceptions: the new fixed costs rules for
accidents occurring from 31st July 2013 will
not apply where a claimant makes a good
Part 36 offer; but unfixed indemnity costs will
be recoverable.
The introduction of fixed costs in personal
injury and employers’ liability claims will,
predicted Regan, ultimately be extended
across the fast-track spectrum.
This protocol applies to employers’ liability
and public liability claims valued between
£1,000 and £25,000 on or after 31st July 2013,
and to employers’ liability disease claims prior
to 31st July 2013.
Hourly rates under question
Regan also said the introduction of fixed costs
means that the courts are likely to move away
from the hourly rates model, noting Lord
Neuberger’s previous statement to the ACL last
year, that “hourly rates reward inefficiency”.
“Long term, the hourly rate is doomed,” said
Regan, noting that the fixed costs mentioned
above are not calculated by reference to time –
and nor indeed is the contingency fee allowed
by the new Damages Based Assessment
Regulations (DBA).
Regan explained that he believes the DBA
Regulations will be amended after massive
lobbying by firms – including those in the
Magic Circle.
The DBA Regulations are being reformed,
with a view to making them workable by April
2014, and Regan outlined the steps that are
being taken to ensure that clients will be
satisfied with them.
For some inexplicable reason, he said, a
hybrid agreement whereby one charges the
client as one goes is not permitted – hence the
reforms. “It must be a pure DBA, which means
the client has no financial involvement… [and]
that is ridiculous,” he stated.
He also made the point that clients would
need to show a degree of commitment to
any agreement, which the DBA changes
would effect.
Small claims limit
There has been much chatter about the injury
small claims limit, Regan noted, which has not
moved from £1,000 since 1991.
Speaking before the Ministry of Justice’s
decision at the end of October 2013, he said
that “the House of Commons Transport
Select Committee report may have ridden
to the rescue”.
I
ACL COSTS
CONFERENCE:
THE CHANGING
COSTS
LANDSCAPE
11. ACL conference review
11
JANUARY/FEBRUARY 2014 | ISSUE 1
The Committee unanimously accepted
that whiplash is a legitimate condition and that
claimants need legal advice and representation
to recover their rightful damages.
Subsequent to the professor’s speech, in
a widely unexpected move, the Government
decided that it would not increase the personal
injury small claims limit at this time.
Law Society chief executive Desmond
Hudson said, on 23rd October 2013, that the
decision “to heed the warnings of the Transport
Select Committee and maintain the small
claims limit at its current level for personal
injuries is good news for accident victims and
a victory for common sense”.
Part 36 issues
Part 36, “the nuclear weapon for claimants”,
is likely to be tidied up next year, Regan said,
stressing that the core elements will be
preserved. He outlined the importance of Part
36 offers, from Jackson’s original vision, in
accentuating uplifts in both damages and costs
for those making successful offers to settle
under Part 36. These are here to stay, he
suggested, and the reward regime could yet
be extended further.
Regan said practitioners should note that the
2013 White Book commentary on Part 36 offers
was corrected in the July supplement. It now
correctly states that an offer is either good or
bad; in or out. See PHI Group Ltd v Robert West
Consulting Ltd (2012) EWCA Civ. 588 and F & C
Holdings v Barthelemy (2012) EWCA Civ. 843.
The October 2013 White Book supplement
had confirmed that that the commentary on
Part 36 offers in Volume 1 remained inaccurate,
with Regan calling upon delegates to “exercise
extreme caution” in reading it.
Costs budgeting
The gaping hole in budgeting has been
recognised by Ramsey J, noted Regan, referring
to the problem in relation to pre-litigation
expenses, which is that CPR 3 .12 (2) talks of the
steps to be taken and
It seems more
likely than not that
costs budgeting will
be extended
“ “
Continued overleaf...
12. ISSUE 1 | JANUARY/FEBRUARY 2014
12
the costs to be incurred. Scrutiny of expenditure
pre-budgeting is being addressed, he said.
Satellite litigation to determine precisely what
proportionality means is inevitable, warned
Regan; paying parties will have the irresistible
temptation to take the point, which meant
“expect war for two years”.
In an aside, he said that whilst the courts
remain unsure of what proportionality means in
this context, it is important that costs lawyers
read up on it; saying that it is likely to be case-
sensitive, and developed, through satellite
litigation, on a case-by-case basis.
He referred to Lord Neuberger’s recent
comments that it was to be hoped that
“concepts of proportionality prevailed over
reasonableness” in the courts’ judgment.
There was also, Regan said, “a real sense
that proportionality should be extended [as per
Lord Neuberger’s speech], and that the current
exemptions as to larger claims [those being
placed outside the costs budgeting regime]
shouldbekeptinthecostsmanagementsystem.
“It seems more likely than not that costs
budgeting will be extended and there will be no
areas where the jurisdiction will be exempt from
the budgeting process,” he added.
The overall direction
Regan suggested that there would be tests of
the Jackson review early on as there were with
the Woolf reforms; but recent speeches by both
Lord Dyson and Lord Neuberger indicated that
they felt the nature of litigation had changed.
It should not be forgotten, he said, that the
Jackson reforms were approved by the judiciary,
and he does not see a future Court of Appeal
undermining or betraying the reforms. This
would mean that the appeal in Mitchell would
make it one of the most important cases of
the year.
All of the signs have been that High Court
judges have taken an equally firm line in the
direction of strict case management, in looking
to ensure cases are proceeding justly and at
proportionate cost.
This reflects some of the lessons Jackson
had absorbed in looking at Singapore’s
management of costs issues, said Regan.
Those hoping that the Court of Appeal might
take a different view would be disappointed,
he suggested.
Lord Dyson’s recent speech to the Judicial
College sent out a defiant note that the courts
will aim to adhere to that interpretation of the
overriding objective, in showing “the centrality
of dealing with cases at proportionate cost and
the fact that the overriding objective requires
the court to place a greater weight than it might
have done previously on enforcing compliance”.
Speaking to Costs Lawyer after the event,
Regan commented that Lord Justice Jackson
was aware of the scale of the challenges costs
lawyers faced, but he encouraged everyone
to read his introduction to the White Book
supplement, which explains his aims, and was
also admirably frank in acknowledging the
problems ahead.
Mediation and costs
Regan said Compulsory ADR is back on the
agenda. Ward LJ who sat in Halsey v Milton
Keynes NHS Trust (2004) EWCA Civ. 576
ruefully repented in Wright v Wright (2013)
EWCA Civ. 234; and in Faidi v Elliott Corporation
(2012) EWCA Civ. 287 said at para 40 that “give
and take is often better than all or nothing”.
Might the Mitchell approach drive lawyers to
mediate, wondered Regan, given the strictness
with which adherence to the rules might be
applied, as was seen in that case?
Likewise, the revised overriding objective,
coupled with the new Rules of Evidence within
CPR 32 and 35, may well see much tighter
regulation of evidence from now on.
This would mean that costs lawyers should
anticipate and, indeed, raise challenges, as the
case may be over the number of witnesses,
experts, the length of their reports, the content
of their statements and so on. In the July
Ladbrokes decision, Lord Justice Jackson
deducted 20 per cent in costs where the
defendant had introduced into witness
statements points that were never taken
at the hearing.
There is a primary duty to be realistic and
exact, said Regan, which the audience should
bear in mind.
Equally, he said, the cost of producing
physical paperwork would need to be
addressed, as Jackson “firmly believes that
paper should be expelled from litigation”.
Electronic filing of statements, disclosure and
bundles is the way forward, noted Regan, with
clear implications for clients as to costs and
infrastructure as a result.
So, with no paper, fixed costs, costs
budgeting and management throughout, and an
end to the system that places the role of costs
lawyers at the end, rather than the beginning, of
the process, Regan’s brief summary of the
issues suggests interesting times ahead. I
The introduction of
fixed costs in personal
injury and employers’
liability claims will,
predicted Regan,
ultimately be extended
across the fast-track
spectrum
“
“
ACL conference review
13. www.johnmhayes.co.uk Amersham Birmingham Bristol Cardiff Chesterfield Haywards Heath
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You will monitor the performance of each team
member and will support, encourage and
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All of our managers are expected to remain
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someone who is dynamic, personable and
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RECRUITMENT PROCEDURE
ntial
discussion about this role, contact Kate
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To apply, please send your CV and a
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period) to kate.oliver@johnmhayes.co.uk.
The closing date for applications is
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John M Hayes – one of the longest
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As Regional Manager, you will be responsible for
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www.glaisyers.com | Your kind of law firm
Glaisyers Solicitors LLP is an Equal Opportunities employer
Costs Professional
Glaisyers is a highly qualified law firm
based in the heart of Manchester City Centre.
We offer all the legal services you could need in life and in relation
to your business. Our team of lawyers are a passionate, professional
bunch, who all share a common outlook and approach.
As part of our continued expansion we have a vacancy within our
Costs Law Department for a dedicated Costs Professional. The
successful candidate will have previous experience in legal costs,
with sound knowledge of the costs recovery process and the Civil
Procedure Rules. Previous supervisory experience
is preferred but not essential. The role will involve drafting bills
of costs, negotiation, drafting Points of Dispute and Replies with
potential responsibility for attending detailed assessment hearings.
If you have the required experience, a confident and professional
manner and you are a team player please apply by emailing your
CV and a covering letter stating your current salary to:
Karen Culliney, Human Resources Officer –
kxc@glaisyers.com
14. ISSUE 1 | JANUARY/FEBRUARY 2014
14
Did you know that ACL members have access to a wide range
of exclusive benefits and services? If not, this summary will
help you to make the most of your membership
Don’t miss out!
ENTICE
ACL members can gain free access to the Entice Rewards website, which provides thousands
of offers and discounts from big names in travel, high street shopping, entertainment and leisure.
For example: savings of up to 17 per cent off travel brochure prices with more than 750 tour
operators are available, with all members of the travelling party able to benefit; you can purchase
vouchers and reloadable gift cards for more than 40 leading high street retailers at below face
value; and cinema ticket discounts of up to 30 per cent can be used at venues nationwide. Just
contact the ACL Admin office to request your unique access code.
ACL membership
NATIONAL UNION OF STUDENTS
All ACL members, including costs lawyers and trainees, are
eligible to apply for membership of the National Union of
Students (NUS). For an annual subscription fee of £12, you
will receive an NUSextra card that gives you access to more
than 160 savings on big brands, from retail outlets to
restaurants. Visit www.nus.org.uk for further information.
CENTRAL LAW TRAINING
Central Law Training (CLT) is a leading provider of post-qualification
training for legal professionals, and ACL members can receive an impressive
50 per cent discount on most of its seminars, conferences and webinars.
Further information and course details can be obtained from the CLT
website at www.clt.co.uk, but places should be booked via the ACL
Admin office.
15. 15
JANUARY/FEBRUARY 2014 | ISSUE 1
ACL membership
And there’s more…
RETAIL
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A 10 per cent discount is available
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discount code ACLINT10.
TRAINING
BizWizUK
Business development expert
BizWizUK helps to de-mystify social
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coaching, and is offering ACL
members a 25 per cent discount
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can contact Ann Davies on 07752
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or visit www.bizwizuk.co.uk
for details.
TRAVEL
Apex Hotels
The 4-star luxury
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such as 25 per
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ACL members can enjoy corporate
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Holiday travel extras are taken care of
thanks to a 15 per cent discount with
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You can reduce your expenditure on essential
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ACL members requiring legal services are offered
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In addition to cost-free benefits, ACL members
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ACL members are offered iDraft Pro setup at
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IfyouhaveanyquestionsregardingACLmember
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16. ISSUE 1 | JANUARY/FEBRUARY 2014
16
Goodmanagement
Of equal importance to the production of
Precedent H are the monitoring and controlling
of costs budgets during the lifetime of a matter;
managing budgets as projects; and project
management skills.
His Honour Judge Simon Brown QC recently
wrote in the New Law Journal: “Budgeting is
just one facet of the skill of legal project
management (LPM) that all civil litigation
lawyers now need to have… CPD LPM training
needs to be mandatory for those conducting
multi-track civil litigation.”
Legal project management
LPM refers to project management methods
and techniques that can be best adapted for
legal industry needs, when developing and
promoting a project-based mindset while
delivering legal services.
There is no single detailed LPM scheme that
fits each and every legal services organisation,
however some core project management
principles and methods can be applied in order
to increase the likelihood of completing matters
within initial estimated costs and delivering
value to the client.
Challenges and opportunities
One immediate challenge for costs lawyers is
to understand better how law firms are trying to
manage litigation in light of the costs budgeting
regime and other commercial pressures that
they are faced with.
Practically every law firm seems to have been
engaged in some form of process improvement
initiative recently, aiming to reduce or eliminate
‘waste’. Costs lawyers need to understand how
these process improvement projects typically
work, what law firms look to achieve from them
and, most importantly, the position that costs
lawyers are now most commonly perceived to
occupy in the ‘value chain’.
It follows on from this that costs lawyers –
like anyone else involved in the delivery chain
– need to be able to demonstrate that they can
clearly add value. How might this be achieved?
LPM training
Alongside the preparation of Precedent H as one aspect of costs budgeting,
changes to the costs management regime have meant that new skills are
now required, as Antony Smith and Sue Nash explain
One route might be through helping with the
project management of litigation, for example
by supplementing solicitors’ project
management skills with the costs-based skills
of costs lawyers.
Arguably, as bare essentials, costs lawyers
need to acquire greater understanding of
project-based techniques for:
G scoping and estimating matters;
G managing cases as ongoing projects;
G communicating project progress clearly with
all concerned;
G being part of effective litigation teams; and
G leading litigation teams (where appropriate).
Legal project management training
Costs lawyers (and, indeed, barristers and
solicitors) have very limited exposure to formal
project management methods and techniques
during their training. There is, however, an
obvious benefit to be gained by doing so after
qualification, and for members to supplement
their innate legal management practice
experience by acquiring project management
skills and then learning to apply them.
The ACL believes this is something that needs
to be rectified, thus we are investigating the idea
of offering legal project management training to
costs lawyers. As a starting point, we plan to
offer a half-day ‘taster’ session some time early
in the first quarter of 2014.
The primary purpose of the session will
be to update costs lawyers about process
improvement initiatives within law firms
and provide an introduction to legal project
management. The secondary purpose will be
to gather feedback from attendees about how
legal costs project management training may
be refined and developed further. I
If you are interested in attending this half-day
session, please contact Diane Pattenden at
enquiries@costslawyer.co.uk
Sue Nash is ACL Committee chair for media/PR
and an ACL Council member, and Antony Smith
is director of Legal Project Management Ltd
www.legalprojectmanagement.co.uk
17. Legal update
17
JANUARY/FEBRUARY 2014 | ISSUE 1
Summaries are from Lawtel unless otherwise stated. For the full judgments,
members should try Bailii (www.bailii.org), a free resource, Lawtel or other
law reporting services. Members are reminded that decisions of lower
courts are only included where an issue is determined that is novel or of
particular interest. Such cases should be cited with care. The judgments
in such cases can be persuasive but are not binding on higher courts
Legalupdate
VITOL BAHRAIN EC v (1) NASDEC GENERAL
TRADING LLC (2) FAL OIL COMPANY LTD
(DUBAI) (3) FAL OIL COMPANY LTD
(SHARJAH) (4) STANDARD CHARTERED
BANK (COSTS) (2013) (Males J)
The Commercial Court emphasised that
it would not assess costs in such a grossly
disproportionate amount as had been incurred
by both sides in the instant case between
foreign parties. Although many cases involving
jurisdiction could incur substantial costs at a
stage when it was unknown where they would
be litigated, the rules were clear that costs
recoverable were limited to those that were
reasonable and proportionate.
The court summarily assessed the costs
of the second and third defendants (F) after
refusing to continue an anti-suit injunction
that had been granted without notice to the
claimant (V) who had sought to join F to
proceedings in the UAE.
The hearing lasted one day, and involved
documentation typical of such a matter in the
Commercial Court. F had been entitled to their
costs on the standard basis. Since the initial
hearing granting the injunction there had been
a further short hearing to consider how to
preserve the parties’ positions until a full
hearing, and there had been extensive
procedural skirmishing in correspondence for
which each side attempted to blame the other.
V’s statement of costs sought a total of
£242,700, including the costs of the without
notice application as well as those of the return
date hearing. It did not provide a full breakdown
as between those hearings, but £142,400 was
for work done by V’s solicitors; £72,800 for
counsel’s fees; £20,000 for UAE lawyers; and
the balance for miscellaneous items. F’s
statement was for £165,400: £70,600 for their
solicitors; £43,100 for counsel’s fees; £50,400
for UAE lawyers; and a few miscellaneous items.
HELD: It was to be expected that V’s costs
would be greater than F’s, as they had incurred
those of the without notice hearing and
because they had the responsibility of
preparing the documents for the hearing.
Nevertheless, the figures on both sides
represented charging on an epic scale. Lawyers
were free to agree fees with clients according to
what the competitive legal market would bear,
and clients would presumably have been told
what to expect. The substantive issues in the
case concerned who had title to oil cargoes
purchased for some US$119 million, so it was
a high-value claim.
However, the hearing was not about oil,
but about whether an injunction should be
granted restraining F from joining V to existing
proceedings in the UAE, and although
sometimes the place of trial was critical to
success, that was not so in the instant case.
V had not suggested that justice could not be
done in the UAE, and had argued that the UAE
claim would be bound to fail. V’s desire to litigate
in the UK appeared to be only a preference, and
F did not suggest that the issue of title could
not be litigated in the UK. Essentially, the parties
had spent over £400,000 to determine which
of two courts should decide the title issue,
when both accepted that either court could
decide it justly.
The rules made clear that costs recoverable
by the successful party from the losing party
were limited to what was reasonable and
proportionate. Although there was a need for
specialist solicitors and counsel, including
UAE lawyers, the costs claimed were grossly
disproportionate. The Commercial Court
Continued overleaf...
18. would not assess such levels of costs summarily
merely because those on each side were
broadly comparable; the assessment for
each side was for £75,000.
However, even if the new rules on costs
budgeting had been applied in the Commercial
Court, it would not have prevented the high
levels of costs incurred in the instant case.
Many commercial cases such as the instant
one involved jurisdiction issues, and anti-suit
injunctions could require substantial costs at a
stage when it was unknown whether the instant
court had, or would exercise, jurisdiction over
foreign defendants, and to require parties to
submit costs budgets at that stage would be
impracticable.
(1) KATHERINE LUMSDON (2) RUFUS TAYLOR
(3) DAVID HOWKER (4) CHRISTOPHER
HEWERTSON (Claimants) v LEGAL SERVICES
BOARD (Defendant) and (1) GENERAL
COUNCIL OF THE BAR (acting as BAR
STANDARDS BOARD) (2) SOLICITORS
REGULATION AUTHORITY (3) ILEX
PROFESSIONAL STANDARDS (4) LAW
SOCIETY OF ENGLAND AND WALES
(Interested Parties) (2013)
[2013] EWHC 3289 (ADMIN) (Bean J)
30/10/2013
The High Court refused to vary the costs cap
in a protective costs order granted to four
barristers, backed by the Criminal Bar
Association, who had brought a judicial review
claim against the Legal Services Board over the
Quality Assurance Scheme for Advocates.
The applicants (L) applied to vary a
protective costs order granted in judicial review
proceedings against the respondent (LSB).
L were four members of the Criminal Bar
Association (CBA). L had sought a declaration
that the Quality Assurance Scheme for
Advocates approved by the LSB was unlawful.
The joint application for the approval of the
scheme was made by the Bar Standards Board,
the first interested party, and by the Solicitors
Regulation Authority and ILEX Professional
Standards, the second and third interested
parties. The claim included an application for
a protective costs order (PCO) with a cap of
£15,000. The LSB suggested that their costs
of defending the claim might come close to
£400,000. The judge concluded that whilst
a cap of £15,000 would be a fair limit if just
L were the claimants, the CBA stood behind
them, and its ability to raise funds from its
membership as a whole was relevant. He
concluded that a per capita contribution
of £100 from at least 1,500 of the CBA’s
members would not be unreasonable and
he accordingly imposed a cap of £150,000.
L applied to vary the order by substituting a
lower figure of £75,000 and to require the
LSB and BSB to file costs budgets within
seven days.
L submitted that, since the variation was
made by them as claimants, they should have
a “little more latitude” than would apply if the
application were being made by the defendant.
L argued that there had been three material
changes since the order was granted, namely
that (i) the circuits had combined with the
CBA to guarantee payment of costs up to the
full amount of the £150,000 cap; (ii) by an
application, the Law Society was granted leave
to intervene in the proceedings and made it
clear that their submissions would be in support
of L’s case: L could therefore be viewed as
representing the whole profession; and (iii) the
LSB appeared to have reduced drastically the
tentative costs estimate to £240,000.
HELD: (1) A claimant who was applying for a
PCO on the basis that if it was refused the claim
would be withdrawn was in an analogous
position to when he was applying for
permission. The unfavourable decision on
paper would bring the claim to an end subject to
the claimant’s right to request reconsideration
in an oral hearing. That was to be contrasted
with the instant application for a PCO where all
of the parties had been given an opportunity to
put their points dealing with the matter on
Legal update
ISSUE 1 | JANUARY/FEBRUARY 2014
18
19. paper and the judge had granted permission,
fixed a particular figure and given detailed
reasons for doing so.
In such a case, whether it was the claimant or
the defendant who was seeking a variation of
the PCO, there had to be a compelling reason to
alter the order made, namely a material change
of circumstance, which would be likely to lead
the first judge to reach a different decision,
R. (Compton) v Wiltshire Primary Care Trust
[2008] EWCA Civ. 749, [2009] 1 W.L.R. 1436
followed (see paras 10-11 of judgment).
(2) It was not accepted that the fact that L
were now indemnified for the full amount of
£150,000 was a reason to reduce that figure
as set by the judge. It was right and proper
that the four individual claimants should
not be exposed to personal liability for costs
and that the CBA and circuits should stand
behind them. Otherwise, as their witness
statements made clear, they would not
continue with the claim. But the fact that L
now had an indemnity was no reason to reduce
the order. In considering the issue of a PCO,
the Law Society’s intervention, like the support
of the circuits, was not a reason for reducing
the £150,000 figure.
The Law Society had far more members than
the CBA; if L had included one or more solicitor
advocates, with the financial backing of the Law
Society it was possible that the judge would
not have granted a PCO at all. The decision
did not attach importance to the figure of
£400,000 referred to in the LSB’s submissions
(paras 13-14).
(3) The alternative application to require the
LSB and BSB to submit costs budgets was also
refused. It would be inappropriate to order the
submission of costs budgets by parties whose
recoverable costs were already the subject of a
PCO. Moreover, an important purpose of a costs
budget was to impose pressure on parties to
litigate more economically, and in the case of
the LSB the application for a PCO had already
had that effect (para 16).
PGF II SA v OMFS CO 1 Ltd [2013] EWCA
Civ. 1288
(Maurice Kay LJ, Beatson LJ, Briggs LJ)
The Court of Appeal extended the guidelines
set out in Halsey v Milton Keynes General NHS
Trust [2004] EWCA Civ. 576, [2004] 1 W.L.R.
3002 regarding whether a refusal to engage
in alternative dispute resolution amounted to
unreasonable conduct that should attract a
costs penalty. As a general rule, silence in the
face of an invitation to participate in ADR was
itself unreasonable, regardless of whether
there was a good reason for a refusal to engage
in ADR.
The appellant (P) appealed against a
decision ([2012] 3 Costs L.O. 404) that it could
not recover some of its costs following the late
acceptance of its Part 36 offer by the
respondent (C) because it had failed to
respond to C’s invitation to mediate.
C had brought proceedings against P for
alleged breaches of tenants’ repairing covenants
in a lease of a commercial building. C claimed
approximately £1.9 million. C made two Part 36
offers, of £1.125 million and £1.25 million, which
were not accepted by P. It then sent P a detailed
invitation to participate in mediation. P did
not respond, even though the invitation was
repeated a few months later. Instead, P made a
Part 36 offer of £700,000, which C eventually
accepted shortly before trial. Ordinarily, upon
acceptance of the offer, C would have been
obliged to pay P’s costs. However, the judge
considered Halsey and concluded that P had
unreasonably refused to participate in
mediation. He therefore deprived P of its costs
for the relevant period under the CPR r.36.10,
19
JANUARY/FEBRUARY 2014 | ISSUE 1
Legal update
Continued overleaf...
20. ISSUE 1 | JANUARY/FEBRUARY 2014
20
Legal update
but did not order P to pay C’s costs. P appealed,
and C cross-appealed against the judge’s
refusal to award costs to it.
P submitted that (1) it had not acted
unreasonably; (2) its silence did not amount to
a refusal to engage in mediation; (3) mediation
stood no reasonable prospect of success in any
event because of the distance between the
parties’ Part 36 offers; and (4) the judge’s costs
sanction was too harsh as he had not weighed
C’s responsibility for failing to accept P’s Part 36
offer earlier.
HELD: (1) The time had come for the court to
firmly endorse the advice given in the ADR
Handbook that, as a general rule, silence in the
face of an invitation to participate in ADR was
itself unreasonable. This was regardless of
whether a refusal to engage in ADR might have
been justified. It was possible, however, that
there might be rare cases where ADR was so
obviously inappropriate that to characterise
silence as unreasonable would be pure
formalism, or where the failure to respond was
a result of a mistake, in which case the onus
would be on the recipient of the invitation to
make that explanation good.
There were sound practical and policy
reasons for such a modest extension to the
guidelines set out in Halsey; first, because an
investigation of the reasons for refusing to
mediate, advanced for the first time at a costs
hearing perhaps months or years later, posed
forensic difficulties for the court concerning
whether those reasons were genuine.
Second, a failure to provide reasons for a
refusal was destructive to the objective of
encouraging parties to consider and discuss
ADR. Any difficulties or reasonable objection to
a particular ADR proposal should be discussed,
so that the parties could narrow their
differences. That occurred routinely in relation
to expert issues; there was no reason why the
same should not apply to ADR.
Third, it would also serve the policy of
proportionality. Accordingly, P’s silence in the
face of two requests to mediate was itself
unreasonable conduct sufficient to warrant a
costs sanction (see paras 34-40 of judgment).
(2) It would be perverse not to regard silence
in the face of repeated requests for mediation
as anything other than a refusal. That was all the
more so because C’s first request was couched
in such detailed and sensible terms that it could
not reasonably have been regarded as a mere
tactic (para 42).
(3) Part 36 offers did not necessarily
represent the parties’ respective “bottom line”.
Accordingly, there was no unbridgeable gulf
between C and P’s respective Part 36 offers,
which could not in any circumstances have
been overcome in mediation. The dispute was
eminently suited to mediation, and it had had a
reasonable prospect of success when offered
by C (paras 46-48).
(4) A finding of unreasonable conduct
by a refusal to mediate did not produce an
automatic result in terms of a costs penalty.
The judge was plainly conscious that he was
exercising a broad discretion. To deprive P of
the whole of its costs during the relevant period
was within the range of proper responses to its
seriously unreasonable conduct. The judge’s
lack of an express balancing exercise did not
demonstrate that he did not in fact carry it
out in his mind (paras 51, 54-56).
(5) There was no recognition in Halsey
that the court might go further and order
the otherwise successful party to pay all
or part of the unsuccessful party’s costs.
While in principle the court had that power,
a sanction that draconian should be reserved
for only the most serious and flagrant failures
to engage with ADR, for example where
the court encouraged the parties to do so,
and its encouragement was ignored
(paras 51-52). I
21. Lynn Plumbley, chief executive of the Costs
Lawyer Standards Board (CLSB), provides a
round-up of regulatory developments
Regulatory
update
Costs lawyer practising certificate
fee 2014
TheLegalServicesBoard(LSB)hasapprovedthe
feefora2014costslawyerpractisingcertificate
atthesumof£250.Throughcontinuedsound
financialmanagement,theCostsLawyer
StandardsBoard(CLSB)hasbeenabletokeep
itsfeethesameforthethirdconsecutiveyear.
A costs lawyer practising certificate identifies
the holder to costs judges, clients and legal
practitioners as being a qualified and regulated
legal professional who adheres to a professional
code of conduct, undertakes continued
professional development and has both
insurance and a complaints procedure in place.
Further, it affords the Costs Lawyer the rights to
conduct the following reserved legal activities
under the Legal Services Act 2007:
G The exercise of a right of audience
G The conduct of litigation
G The administration of oaths
The name of a Costs Lawyer with a practising
certificate will appear on the public domain
register of regulated costs lawyers, a copy of
which will be sent by the CLSB to all costs judges
at the beginning of 2014 for their reference
during the year. Further, LawCare cover will
remain in place during 2014 (see below).
Tax relief on costs lawyer practising
certificate fee
Tax relief is now available on a costs lawyer
practising certificate fee, under Statutory
Instrument 1126/2013 (the Income Tax
(Professional Fees) Order 2013), which adds
“fees payable to the Costs Lawyer Standards
Board on applying for a costs lawyer practising
certificate” to the table of those fees qualifying
for relief under S.343 Income Tax (Earnings
Pensions) Act 2003.
LawCare cover with a costs lawyer
practising certificate
LawCare is a charity that is supported by
14 professional bodies, including the CLSB,
Law Society, Bar Council, CILEX, MOJ, Institute
of Paralegals and Institute of Barristers Clerks.
The organisation offers health support and
advice for legal professionals, and its website –
which contains information on alcohol, drugs,
depression, eating disorders, panic attacks and
assessing and addressing stress in professional
and personal lives – can be accessed at
www.lawcare.org.uk
LawCare can be contacted on 0800 279
6888 in total confidence; not only in regard to
your own concerns, but also those you have
about a colleague or family member.
The organisation also issues newsletters,
which the CLSB has agreed to forward on
to all costs lawyers with a current practising
certificate. Costs lawyers are therefore
requested to ensure that the CLSB has
their current email address.
Changes of residential address
during 2013
As the CLSB posts to residential addresses,
costs lawyers who have changed their home
address during 2013 are asked to notify us in
order to ensure effective delivery of their 2014
practising certificate forms.
Legal Ombudsman CPD-accredited
courses 2014
Following a successful pilot course on
complaints handling, the Legal Ombudsman
has extended its CPD-accredited programme
for the legal profession. Dates for the next
CPD sessions are:
G Thursday 23rd January 2014, Legal
Ombudsman office, Birmingham
(9:00-13:00)
G Tuesday 18th February 2014, Northumbria
University, Newcastle upon Tyne
(13:00-17:00)
G Wednesday 19th March 2014, Cardiff City Hall
(12:30-16:30)
G An additional date is planned for November
2014 for Bristol
The course is suitable for those who would
like to learn more about complaints handling
or refresh existing knowledge. It aims to clarify
the process and principles that the Legal
Ombudsman follows when it investigates
complaints and considers implications for
best practice and internal complaint handling
procedures.
The course costs £100 + VAT per person,
and carries four CPD points. Enquiries should
be submitted to Janet Edwards at
janet.edwards@legalombudsman.org.uk I
21
Update
CostsLawyerStandardsBoard(CLSB)
CenturionHouse,129Deansgate,
ManchesterM33WR
Tel:01612147904
Email:enquiries@clsb.info
JANUARY/FEBRUARY 2014 | ISSUE 1
22. ISSUE 1 | JANUARY/FEBRUARY 2014
22
t the ACL Costs
Conference, Margaret
McDonald of Kenworthy’s
Chambers reviewed the case
of Henry v News Group
Newspapers [2013] EWCA 19.
The case arose out of the pilot
costs management scheme
that had been introduced for
defamation proceedings.
Paragraph 5.6 of Practice
Direction 51D provided that, when
assessing costs on the standard
basis, “the court would have regard
to the receiving party’s last
approved budget” and would
“not depart from such approved
budget unless there was good
reason to do so”.
In Henry, the claimant’s
budget had been approved at
approximately £380,000, but circa
£650,000 costs were claimed.
Was there good reason to depart
from the approved budget?
The senior costs judge Master
Hurst found that a vigorous and
lengthy defence had been
mounted, in which the
amendments to and changing
nature of the defence were not
minor inconveniences.
However, the senior costs judge
held the claimant had failed to
comply with the provisions of
Practice Direction 51D – the
requirements to have the budget
approved – and there was no good
reason to depart from the
approved budget.
Simon Murray of Neo Law, in his
subsequent talk on the case, said
the claimants argued that the
increases in budget could not have
been predicted, and had told the
defendant of the costs figure
before settlement.
The costs judge held that there
was no good reason to depart from
the budget as the claimant had not
kept the court or the defendant
fully informed of the increases in
costs. The claimant had not
therefore complied with the PD51,
which is mandatory, so despite
being likely to show that costs were
recoverable on direct assessment,
they should be disallowed.
Moore-Bick speaks out
On appeal, the Court of Appeal
said Master Hurst had interpreted
“good reason” too narrowly.
Compliance with PD51 is not
essential before a party can ask the
court to depart from the budget;
rather, it is one factor to be taken
into account, as “budgeting is not
intended to act as a cap”.
The failure to comply with PD51,
McDonald pointed out, did not
lead to an inequality of arms or
disproportionate costs, nor
had “the essential object of the
scheme been frustrated”.
The decision, McDonald added,
was arguably fact-specific, pointing
to Lord Justice Moore-Bick’s obiter
dicta in saying the extent of
recovery in excess of the budget
“would depend principally on the
extent to which the costs… were
reasonable and proportionate
to what was at stake… and to
which they could have been
properly reduced” if PD51 had
been followed.
The Court of Appeal
acknowledged that the new
costs rules imposed “greater
responsibility on the court
for the management of costs
proceedings… and on the
parties for keeping budgets
under review as proceedings
progress”, with greater emphasis
on the approved budget in
providing a limit on costs.
It held that “the primary function
of the budget is to ensure that
the costs incurred are not only
reasonable but proportionate
to what is at stake in the
proceedings”. The Court of
Appeal overturned the first
instance ruling and allowed the
claimant to recover their costs.
ACL conference review
A
[The Henry decision]
creates the erroneous
impression that a party
which outspends the
defendant can still
recover full costs
“
“
Simon
Murray
Thecostswars
continueDelegates at the ACL’s recent Costs
Conference in Manchester heard a
variety of views on the thorny issue of
costs budgeting case law, prior to the announcement
of the Mitchell decision, as Ben Rigby reports
23. 23
JANUARY/FEBRUARY 2014 | ISSUE 1
Breaking ranks
Simon Murray, quoting Professor
Dominic Regan, said that the
Henry decision was “dangerously
deceptive”, explaining that “it
creates the erroneous impression
that a party which outspends the
defendant can still recover full
costs. If only!”
Murray cited (but distinguished)
two cases – Troy Foods v Manton,
[2013] EWCA Civ. 615 and
Safetynet Security v Coppage
– that might suggest a looser
interpretation of the budgeting
process. In the former, in giving
leave to appeal, Moore-Bick LJ
said: “Costs judges should [not]
treat the court’s approval of a
budget as demonstrating…
that the costs incurred by the
receiving party are reasonable
or proportionate, simply because
they fall within the scope [of that
budget].” So, just because costs
are within budget does not mean
they are either reasonable or
proportionate, although the
case settled before the appeal
hearing itself.
In Safetynet, the need for
detailed assessment was waived
by HHJ Simon Browne. The case,
said Murray, could be distinguished
on its facts by the judge concerned
– who had run the costs pilot – and
so was case-specific and unlikely
to be the norm. That, however, was
before ‘Plebgate’...
Plebgate
Signature Law’s Graham Huntley,
speaking to Costs Lawyer in March,
said: “We can expect vigorous
argument as to whether the new
rules coming into effect in April
2013 are so materially different
from those in the pilot scheme
as to justify future courts being
less lenient.”
One such opportunity has
arisen. In Andrew Mitchell MP v
News Group Newspapers [2013]
EWHC 2355, the claimant’s
solicitors failed to file a budget
on time. The claimant asked for
relief from sanctions, but Master
McCloud refused that application
and reduced costs to court fees.
In Mitchell, however, the case
management conference, listed at
short notice, had been adjourned
with costs. The judge had chased
the claimant for costs budgets,
which were filed the day before
the hearing, but not seven days
before as CPR 3.13 required, and
the explanations given by the
claimant’s firm (e.g. pressure
of work, small firm, dealing with
unexpected delays with counsel)
“were not unusual and carried
even less weight post-Jackson”,
said McCloud.
The defendant, using costs
lawyers, had dealt with the matter
promptly so that time was not too
short, nor unfairly so. Nor would
Mitchell be prejudiced, she noted.
Murray, in his talk, pointed out
that as a general rule, either the
solicitors’ professional indemnity
insurance – or his costs lawyers’
– would probably apply in cases
involving the missing of time limits
or mistakes in budgets.
McDonald said that what
distinguished Mitchell from
Henry was that new CPR 3.9
applied, with a full argument from
experienced costs counsel and the
benefit of witness evidence. The
subsequent appeal was heard on
7th November by Lord Dyson MR.
Speaking at the conference,
Professor Dominic Regan
suggested that McCloud was
right to identify the case as
important, as a test case of the
Jackson reforms implementing
cost budgeting reforms that had
been approved by the judiciary.
ACL conference review
Explanations
given by the
claimant’s firm…
‘were not unusual
and carried even
less weight post-
Jackson’
“
“
Margaret
McDonald
He also did not see a future
Court of Appeal undermining
those reforms.
Meanwhile, enter Willis
Mitchell is not the only case in
which budgeting has been an issue.
Murray cited Willis v MRJ Rundell, a
professional negligence claim
worth £1.6 million in which both
sides were heavily criticised for
budgets of nearly £900,000 and
£700,000 respectively.
Mr Justice Coulson refused to
approve either side’s budgets,
saying they were disproportionate
and unreasonable. “It will cost
significantly more to fight this
case than either side will ever
recover,” he noted.
However, “just because an
estimate of £900,000 at this
stage of the case… appears
disproportionate and
unreasonable…” he added,
“does not mean that a final
recovery of £450,000… would
not be appropriate”.
Pending Mitchell, Murray said
that Justice Coulson’s judgments
have been “very robust and very
Jacksonian in tenor”. Whilst some
might see them as yet another
‘green light’ to avoid making costs
management orders, the fact that
he has given a level of direction
makes it “an important judgment”,
he added.
Against that, Regan’s words
on the judiciary’s wider approach
are still worth bearing in mind. He
noted a recent speech given by
Lord Dyson to the Judicial College,
in which he suggested the courts
would emphasise “the centrality
of dealing with cases at pro-
portionate cost, and the fact that
the overriding objective requires
the court to place a greater weight
than it might have done previously
on enforcing compliance”.
The issue, therefore, for how
proportionality might be defined
– in costs budgets in particular –
remains a live one. Regan himself
told his audience to “expect war
for two years”. I
24. ISSUE 1 | JANUARY/FEBRUARY 2014
24
Steven Green
and Simon Murray
Exhibitors from
Kings Chambers
His Honour Judge David Hodge QC
Dominic
Regan
Dr Mark
Friston
Margaret
McDonald
Nathan Adams of
Dere Street Barristers
ACL Training Education
Officer Jenny James
Exhibitor
from New
Square
Barristers
Exhibitors from Kerry London
At this year’s ACL Costs Conference, delegates enjoyed
the opportunity to increase their understanding of
recent and ongoing developments in the profession
through a variety of seminars, as pictured here
ACLconference:
inpictures
25. 25
JANUARY/FEBRUARY 2014 | ISSUE 1
Exhibitors from
Clayton Legal
Simon Murray
of Neo Law
His Honour Judge David Hodge QC
Members of the ACL Council
Robert
Marven
of 4 New
Square
Exhibitor
from Boote
Edgar
Esterkin
Exhibitor from Boote Edgar Esterkin
District Judge
Ian Besford,
ACL honorary
vice president
Exhibitors from RBUK
26. ISSUE 1 | JANUARY/FEBRUARY 2014
26
From the outset
G Consider when the budget
should be filed: either by the
date specified in the notice of
proposed allocation (r.26.3 (1));
or seven days before the Case
Management Conference.
Completing Precedent H
G From the outset, when
completing Precedent H,
consider the relevant hourly
rates, both for each fee-earner
involved and any future hourly
rates if they are likely to change.
G Anticipate changes to fee
earners who may be promoted in
that period – i.e. from Grade B to
Grade A – so that their additional
costs can be recovered.
Pre-action costs
G In accordance with the protocol
in investigating the merits and
advising the client, pre-action
costs should be apportioned
properly between the various
phases of the claim. That
includes any early meetings to
discuss liability and quantum
issues.
Pleadings
G The issue of proceedings, such
as draft pleadings, should be
apportioned properly (i.e. under
statements of case rather than
the pre-action stage).
Casemanagementconferences
G Anticipate the costs of one or
more CMCs, their preparation
and attendance, and the
contingency of other CMCs.
This should factor-in: preparing
the case summary; the costs of
any witness evidence; updating
the budget; the hearing itself;
and using counsel.
Witnesses
G Consider how many witness
statements are needed, the
costs of attendance, travel, and
preparation of statements and
updates. Other factors might
include: travel time; travel
expenses; advising the client;
letters; and telephone calls.
G Similarly, with experts’
evidence, consider: how
many will be needed; the
costs of their instructions;
how long it will take to consider
their report; and the costs
of any amendments, updates
and questions.
Disclosure and settlement
G What disclosure is relevant
to the case? Include not just
the correspondence received,
but also consider time spent
reviewing any documents
received and the costs of
preparing the relevant
bundles, as well as the cost
of considering any opponents’
disclosure, plus preparing the
list of documents and any
surveillance, should it be
required.
G The costs of settlement
need to be factored-in, as well
as preparing (and making) any
Part 36 offers; analysing
quantum; joint settlement
meetings; and the costs of
ADR, including mediation,
as a contingency, plus relevant
CRU correspondence.
Trial: before, during
and after
G The costs of pre-trial review
should be properly factored-in;
these can be quite large when
added up, so include all
relevant costs, including
counsel. Similarly, with trial
itself, the summonses for
witnesses and the preparation
of bundles should be
anticipated, as should the brief
to, and any relevant pre-trial
conference with, counsel
themselves.
G How many days are anticipated
for the trial? And who should
attend? Add these factors in,
as well as the costs of drafting
Final Orders.
G Counsel’s fees themselves
should be calculated correctly
– their hourly rates will be under
much closer scrutiny. Likewise,
the costs of experts attending
should be estimated
appropriately, as well as any
post-trial written submissions.
Overall: when submitting
the budget
G The assumptions made
in stating the budget are
important, whether included
separately or in the form; as
is explaining any workings, or
explaining a summary of the
case so that the assumptions
are given a proper narrative
context.I
ACL conference review
At the ACL’s recent Manchester conference, Steven
Green of Irwin Mitchell gave delegates a ready reckoner
as to how to get the best out of the costs budgeting
process, as this summary of his talk demonstrates
Top tip:
Budgets should take the worst
case scenario; that way any
costs consequences could be
anticipated, as well as covering
the nuts and bolts of case
preparation.
Top tip:
The possibility of ADR should
be included; particularly if there
is a reasonable prospect that
one or either side is mandated
to make it.
Top tip:
Consider the need to include
interlocutory applications (those
reasonably in the parties’
contemplation), e.g. interim
payment applications. This might
be in the initial phase, depending
on the assessment of liability, but
there might be others; split trials,
any relevant inquests and ADR
(see next ‘top tip’).
Costsbudgeting:
inpractice
27. 27
JANUARY/FEBRUARY 2014 | ISSUE 1
ACL conference review
Costsbudgeting:
thedefendant’sview
Simon Murray of Neo Law gave a defendant’s-eye view
of costs proceedings at the conference. The following
abridgment of his presentation outlines the way in which
defendants should approach costs litigation strategy
Lord Justice Jackson, Simon Murray reminded
his audience, has made it clear that the key to
keeping costs proportionate is the court
managing spend throughout, moving arguments
over costs from the end of a case into the
centre of the litigation process.
The essential elements of costs management
are to enable the court not only to say to what
extent costs are approved, but also to manage
the case within that approved budget and then
adjudicate on the retrieval of recoverable costs
in accordance with the approved budget.
Under Part 3 of the CPR, rule 3.13, unless
ordered otherwise, all parties – save for litigants
in person – must file and exchange budgets as
directed. Murray reminded his audience of the
various costs pilots, which focused on managing
cases in a proportionate manner, from the first
case management conference onwards.
The pilots established that judges spent
an average of 14 minutes approving budgets,
suggesting that getting matters right first time is
important. Having the relevant IT to hand to take
judges through the process would also assist.
The new normal
Murray reminded the audience that judges have
been trained to look at the right figures, not the
minutiae of the costs budget. Therefore, they
should take the judges through the individual
arguments in relation to the costs assumptions
as set out in Precedent H. Defendants should
identify any prospective points of dispute,
preparing skeleton arguments as appropriate, to
testthoseargumentsagainstthoseassumptions,
looking at the total costs for each phase of
proceedings, and whether they fall within the
range of reasonable and proportionate costs.
The courts will only review the total figures
for each phase of the proceedings (although
they may possibly look at the constituent
elements of each total) in deciding whether
a section falls in the range of reasonable and
proportionate costs. They won’t, he said, “go
through each item and pick them apart, but will
look at the proportionality of the phases and
costs as a whole”.
It is important to use budgeting tactically,
whether in challenging the use of claimant
experts at certain stages in litigation;
considering the impact of a high defendant
costs budget on a claimant’s potential strategy
(“could it result in a collapse in the batting?”
he questioned); or advancing the use of a
modest defendant budget to act as a positive
comparator to claimants.
At the hearing
Advocates should make focused arguments
and submissions. Advocacy is important, he
said; many clients are instructing costs counsel
to represent them in hearings, as well as dealing
with directions. Costs specialists are needed to
represent the parties, and costs lawyers should
press home that fact.
How such hearings are conducted varies,
he said, but there are certain tips to aid one’s
advocacy. For example, he encouraged costs
lawyers not to overplay minor items, “win the
battle not the war”, push judges to make
decisions on individual items, or encourage
the court to reduce reasonable phase totals
or budgets – the latter only encouraging a
variation application.
Changing the bill
Variations are allowed; there is no limit to the
number of times an amended budget can be
sought, so both sides should be prepared to go
back to the court if it needs to be upwardly, or
downwardly, adjusted.
Managing the budget and going back to court
early is important, he added, if claimants want
to raise their costs or defendants want to
reduce them downwards.
If the case settles, pre-budget costs will be
assessed in the normal way – which means
defendants should beware of any claimant
front-loading.
In assessing costs on the standard basis, the
court will look at the last approved or agreed
budget, and not depart from it unless there is
a good reason to do so. I
The key to keeping
costs proportionate is the
court managing spend
throughout
““
Costs pilots established
that judges spent an
average of 14 minutes
approving budgets
““
Costs specialists
are needed to represent
the parties
““
