Extension of new claims process “imminent”

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Legal Futures reports:

“The government is set to take forward Lord Young’s proposals to extend the road traffic claims process to all low-value personal injury and clinical negligence cases, while the Jackson reforms are imminent, the Ministry of Justice (MoJ) confirmed [on Monday].

Publishing its business plan and milestones for 2011-15 for consultation as part of a government transparency initiative, the MoJ said it is currently developing proposals to extend the claims process ahead of a consultation in March 2011. This will form part of a wider consultation on civil justice reforms. A final report will be published in October 2011.

Meanwhile, the business plan also said that the green paper on implementing Lord Justice Jackson’s costs reforms will be published this month. The consultation will run until February, with a plan for implementing the changes to civil litigation funding and costs published in April. If primary legislation is needed, it will be introduced in spring 2011.

The civil justice reforms will aim to promote wider use of alternative dispute resolution, including mediation, and make it easier for people to get advice and guidance. Legislation to effect them will be introduced in May 2012.”

The clock is ticking.

Are you ready for the new legal costs landscape?

Tech savvy law costs draftsmen

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I recently received an email from a costs draftsman that had the following words at the bottom:

Sent from my iPhone

As you can imagine, I was suitably impressed.  My mobile phone is only one step up from a tin can and one end of a long piece of string.  Only with worse reception.

However, I’m now going to let you into a little secret.  You can change the email signature at the bottom of the emails you send from your ordinary computer to show exactly the same message. 

Nobody ever need know you don’t really own one. 



Sent from my iPad


The costs lawyer’s office cat

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This month’s edition of Costs Lawyer magazine contains at article from the Association of Law Costs Draftsmen’s Chairman Iain Stark continuing the discussion on the issue, raised by an earlier article by District Judge Hill, of whether independent law costs draftsmen, who are not costs lawyers, are able to appear in court. (See my previous posts on the subject of Rights of audience of law costs draftsmen.)

The article, unsurprisingly, largely supports DJ Hills views.

One interesting point that was raised was the following:

“the ALCD at present regulates only individuals and not entities. As a consequence the rights conveyed to a costs lawyer are as an individual and cannot be extended to other persons. For example, where a costs lawyer is on the record, they cannot delegate their right of audience to a non-costs lawyer. Delegation is only permitted to another costs lawyer or member of the legal profession in receipt of such rights.”

If this is true, it is contrary to my reading of the Act. I am more than happy to be corrected here and the Legal Services Act 2007 has probably not won any Plain English awards.

Employed staff without rights of audience have traditionally been able to attend hearings heard “in chambers”. The Costs Lawyer article seeks to suggest that detailed assessment hearings cannot fall within this category because CPR 39.2 now treats such hearings as being “in public”.

I don’t believe that conclusion follows. PD 1.14 of CPR 39 states:

“References to hearings being in public or private or in a judge’s room contained in the Civil Procedure Rules (including the Rules of the Supreme Court and the County Court Rules scheduled to Part 50) and the practice directions which supplement them do not restrict any existing rights of audience or confer any new rights of audience in respect of applications or proceedings which under the rules previously in force would have been heard in court or in chambers respectively.”

A detailed assessment hearing can be treated as being both “in chambers” and “in public” with no apparent conflict so far as rights of audience are concerned.

Consider again paragraph 1(7) of Schedule 3 of the Act, which deals with “Exempt Persons” for the purpose of rights of audience:

“The person is exempt if -

(a) the person is an individual whose work includes assisting in the conduct of litigation,

(b) the person is assisting in the conduct of litigation -

(i) under instructions given (either generally or in relation to the proceedings) by an individual to whom sub-paragraph (8) applies, and

(ii) under the supervision of that individual, and

(c) the proceedings are being heard in chambers in the High Court or a county court and are not reserved family proceedings.”

Sub-paragraph (8), so far as relevant, refers to “any authorised person in relation to an activity which constitutes the conduct of litigation”. So a costs lawyer, who is authorised to conduct costs litigation, instructs a non-costs lawyer to undertake the advocacy in relation to a specific detailed assessment hearing. So long as the individual being instructed is properly supervised (whatever that means) do they not fall into the category of “exempt person”?

Even if DJ Hill is correct and rights of audience generally are restricted to direct employees of solicitors, in the context of costs proceedings this would apply equally to those working directly with/for costs lawyers (so long as supervision could be shown to be in place).

If my interpretation is correct (and I sleep soundly knowing there will be plenty to correct me if I am mistaken) the ALCD’s recent decision to upgrade large numbers of its membership to costs lawyer status has, for all practical purposes, also granted rights of audience to the very large number of non-costs lawyers who work with/for costs lawyers.

Fixed costs – “exceptional circumstances”

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The predictable costs regime allows for costs in excess of fixed fees to be allowed in certain circumstances under CPR 45.12(1):

“The court will entertain a claim for an amount of costs (excluding any success fee or disbursements) greater than the fixed recoverable costs but only if it considers that there are exceptional circumstances making it appropriate to do so.”

The issue of what amounts to “exceptional circumstances” was considered in a recent case by District Judge Wyatt in Carlon v Domino’s Pizza (Birmingham CC 27/8/2010) (judgment available on Lawtel).

The case was a relatively routine fast track road accident case except for the fact that the claimant was a minor and an initial psychological assessment suggested that the accident may have been responsible for the claimant developing anorexia nervosa and further investigations were undertaken.

The judge concluded that:

“I have come to the view that the element of the possibility that there was a connection between her eating disorder or its exacerbation and this accident is and amounts to in itself exceptional circumstances. … [T]he possible connection to a severe eating disorder, particularly one that led to a prolonged period of inpatient treatment, was something that took this case well outside the normal range of orthopaedic and psychological consequences of a road accident that would be otherwise likely to fall within the fast track regime.”

The judge was reinforced in his view by virtue of the fact the claimant was a child and it was appropriate to fully investigate this element.

Costs in excess of fixed costs were therefore allowed.

On the face of it, this decision cannot be criticised. An eating disorder caused by an RTA must be ““exceptional circumstances”. There is, however, one further element that does not appear to have been argued before the judge.

Upon further investigation the treating psychiatrist was unable to directly attribute the onset or acceleration of the eating disorder to the accident. The claim therefore settled for £3,950 with, presumably, no element to reflect the eating disorder.

This raises an interesting issue of law and one in which there appear to be two schools of thought.

The first one is that the reasonableness of work claimed is to be judged as at the date it was undertaken. Hindsight should not be applied (Francis v Francis and Dickerson [1956] P 87 at 91.). The legal representatives would have clearly been negligent not to explore this issue (although that might be regarded as being a solicitor/own client problem) and therefore acted entirely appropriately investigating the issue further. The additional costs incurred should be allowed to reflect this “reasonable” work even if it did not result in higher damages being recovered.

The second school of thought, and one that has found increasing favour in recent years, is that a party may be deprived of costs in relation to a head of claim on which they have lost and regardless of whether they were “unreasonable” in pursuing that head:

• In AEI Ltd v Phonographic Performance Limited [1999] 1 WLR 1507, Lord Woolf MR stated at 1523H:

“…it is no longer necessary for a party to have acted unreasonably or improperly to be deprived of his costs of a particular issue on which he has failed.”

• Referring to this judgment Longmore LJ, in Summit Property Ltd v Pitmans (A Firm) [2001] EWCA Civ 2020, at paragraph 16, approved this view and went further:

“In my judgment, it is also no longer necessary for a party to have acted unreasonably or improperly before he can be required to pay the costs of the other party of a particular issue on which he (the first party) has failed. That is the substance of what the Master of the Rolls was there saying.”

• In Dudley Fleming v Chief Constable of Sussex [2004] EWCA Civ 643, Potter LJ observed at paragraph 36:

“The principles are too well known to require to be set out in detail. The pre-CPR working rule to be found in the judgment of Nourse LJ in Re Elgindata Ltd (No 2) 1 WLR 1207 was modified by the observations of Woolf Lord in AEI Rediffusion Music Ltd v Phonographic Performance Ltd to the effect that it is no longer necessary for a party to have acted unreasonably or improperly to be deprived of his costs on a particular issue on which he has failed.”

• In the case of Shirely v Caswell [2001] 1 Costs LR 1, Chadwick, LJ, giving the judgment of the Court of Appeal, stated:

“The costs of issues abandoned, or not pursued at trial, ought, prima facie, to be disallowed against the party incurring them on an assessment of the costs of that party by the costs judge – because, again prima facie, they are costs which have been unnecessarily incurred in the litigation.”

In this case the claimant was awarded additional costs (ie non-fixed costs) in relation to work undertaken pursuing a potential head of claim that was then abandoned (ie the eating disorder).

There remains a tension in the authorities as to the correct approach to the “blameless”, but ultimately unsuccessful, claimant who fails in relation to a specific head of claim.

Please remember to turn off the lights

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What does the Young Report mean for the legal profession, the insurance industry and the legal costs world?

Lord Young recommends the implementation of Lord Justice Jackson’s Costs Report:

“It is my firm belief that the government should adopt Lord Justice Jackson’s proposals as soon as possible”

The Government has approved the Young Report with the Prime Minister saying:

“Lord Young has come forward with a wide range of far reaching proposals which this Government fully supports”

Lord Young has also proposed the expansion of the RTA claims process into other personal injury and lower value clinical negligence claims. Separately, the Government has advised it wants to press ahead with Lord Justice Jackson’s proposals to end the recoverability of success fees and ATE insurance premiums as a matter of urgency.

It is not quite clear how extension of the RTA claims process would tie in with Jackson’s proposal to introduce fixed fees for all stages of fast-track matters. Presumably there would be a different fixed fee system for those cases which fall outside the extended claims process.

For claimant lawyers the future is clear. The end to recoverability of success fees will greatly reduce their fee income.

For defendant lawyers the future is less easy to predict. The expansion of the current claims process may reduce litigation generally and reduce work volumes.

Insurers will hope that the proposed increase in general damages will be more than off-set by the end to recoverability of success fees and ATE premiums.

And those working in the legal costs world? Well, for those dealing with party and party costs, most will lose their jobs.

How quickly? Lord Young gives a target date of April 2012 for the extension of the claims process. Allowing about a six-month run-off period for older cases (the change will not be retrospective) gives us a date about two years from today when the impact will start to seriously bite in terms of work volumes. That means a couple of years from now most of the law costs draftsmen, legal costs negotiators and costs lawyers (yes, you too) reading this will no longer be reading the Legal Costs Blog as it will be irrelevant to whatever new line of work they are then in.

I’m planning on retraining as an acrylic nail technician (trust me, that’s where the big money will be). As for the rest of you, best of luck.

Oh, wait.

Michael Cook, speaking at this years’ Association of Law Costs Draftsmen’s National Conference said he saw Jackson as a “costs lawyer’s charter” for reviving “ancient skills” such as budgeting, costs management and solicitor/own client work, with costs management being “the costs lawyer’s dream”. He concluded:

“Let’s not have any more talk about Jackson putting costs draftsmen out of business.”

I guess one of us is going to end up looking pretty silly.

Halloween hell

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How I hate Halloween.

Whenever I go to a Halloween fancy dress party I invariably end up wearing something that turns about to be totally inappropriate.

For three consecutive years I dressed as an historical figure from different countries. Italy, Spain and Germany respectively. You have no idea what divisive characters Mussolini, Franco and Hitler turn out to be.

Another year I dressed as a soldier with a uniform that featured little skulls that I thought would tie in nicely with the Halloween theme. Apparently, after the Price Harry episode it turns out that it’s not just Africa Corps outfits that are deemed inappropriate party dress wear.

Last year I decided to play it safe and went as a ghost. This was about the same time as the whole vampire mania thing started to take over film and TV and so I decided to take a large wooden cross to “ward off”all those who would inevitably be dressed as vampires. On the way into the party the large cross knocked over one of the carved pumpkins by the front door and the candle inside set the wooden cross on fire. Looking back I suppose the sheet over my head did look a bit “pointy” but I still think the whole episode was blown entirely out of proportion.

This year, however, was the worst one ever.

It was an event run by the local law society and it is no exaggeration to say I was virtually lynched the moment I walked through the door. I had to flee the building in fear for my life. As soon as the fancy dress shop opens this morning I’m going straight back to demand a full refund on the Lord Justice Jackson costume.