Costs management

Members of the Association of Costs Lawyers have received an invitation from His Honour Judge Simon Brown QC for their comments or observations upon costs management and its mechanics under the pilot scheme under PD 51G.

This pilot runs until 31 March 2013 and a final report will be published on 26 March 2013. Costs Lawyers are asked:

“Please do let us have your views on costs management, even if is at the 11th hour. Feedback can still be incorporated in the Final Report, on an anonymised basis, and might lead to further improvements of the costs management procedure.”

And there was me thinking a decision had been taken that costs management was already a good idea (except for large cases), new rules had been published and this was all due to start on April Fools’ Day. Silly me.

The invitation also asks for:

“Any views on the new definition of proportionality?”

That I’m happy to provide. It won’t work because the Court of Appeal will chicken out when the first case reaches them and they give us a meaningless new Lownds II test.

12 thoughts on “Costs management

  1. The idea that a pilot in the rarified world of the TCC & Mercantile Courts throws any light on what will happen when costs budgeting is extended to county court PI litigation is pretty comical. In the TCC, budgets have tended to be agreed. Does anyone really think that that is going to happen in a PI case, when Irwin Mitchell go toe-to-toe with DAC Beachcroft?

  2. Lardon – we always look to settle our budgets but we cannot comment on ”DAC Beachcroft”

  3. Mitchell – I think when a defendant says you should be on band 2 guideline rates, all work done by a grade C, there is likely to be a rather longer argument than the 20 mins or so which Judge Simon Brown QC claims has been typical for costs management in the Mercantile Court. And that will just be on the very first point!

  4. The emphasis on bioth parties is to agree as much as possible before we get to the Court. Indeed we are all under a duty try and agree all directions including budgets under the Rules as has suely always been the case. We will both comply with the rules, directions and spirit of the same, as we always have whilst seeking to do the best for our clients.

    No further comment required.

  5. @Kevin Hassey

    If only things worked that way. Even when the CPR and directions are complied with, the spirit of these is often not.

    Too often parties end up entrenched in quibbling with one another. Paying parties often just raise as many points as possible, knowing that one or two may stick. On the flip side receiving parties often fail to make any real concessions, even when it makes commercial sense to do so.

    It’s not just the Rules that need an overhaul, so does the attitude and approach of those who practice within the legal sector.

  6. “We will both comply with the rules, directions and spirit of the same, as we always have whilst seeking to do the best for our clients.”


    No further comment required.

  7. There was nothing personal about my remark. Irwin Mitchell and DACB are both top firms which fight hard for their clients. My point, which I would have thought obvious, is that firms like those have a gulf between them, when it comes to their clients’ interest, on what “reasonable costs” looks like. One will be saying that it is a top flight specialist firm that levels the playing field for injured claimants taking on big insurers. The other will be saying that there is a public interest in economy, and the case could just as well have been brought with a high street firm charging £100/£150 an hour less. That will give rise to an argument that will take some time. Will there have been any experience of that in the TCC pilot, when you have firms like Pinsents on one side and Ince on the other, both charging about the same? Obviously not. So the pilot has told the court very little about the sort of disputes that will arise in PI litigation, which is obviously going to last in some cases for hours. The one PI area where there is costs budgeting at the moment is group litigation. The disputes about budgets there often last for days. And yet the powers that be think that, in the county courts, 20 mins is going to be enough.

    I hope that clears the air. Looking for insults where there aren’t any is never a good idea; it suggests a guilty conscience…

  8. The idea behind cost management is that it shouldn’t matter whether one party proposes to undertake a task at £1,000,000 per hour for 1 hour and another proposes 1,000,000 hours at £1.00 per hour. So long as the cost budgets are proportionate they will be approved.

    In theory, then, the playing fields are level. Based entirely upon conferences I have attended (one of which was given by a DJ) it appears as though the hourly rate arguments are on the way out.

    I do not think for a moment that budgets will be agreed between the parties in PI cases, however, the bottom line seems to be that, if you get your assumptions correct and you can stand by the budget, then all will be well.

    Clearly, what is proportionate is anyone’s guess. Anyone who wants to chance their arm with prima facie disproportionate costs is running a real risk.

  9. Think Chris is close to the mark. Indications as I have heard are i’m afraid that hourly rates will not be much of an argument, a case of making your submissions but it will not be allowed to be heard at any length, neither will the vast majority of the fine details that comprise the budget.
    Also, seems that whilst there will be a confirmation that a process has been completed in allowing a budget, there will be little by way of detailed reasoning thus giving little or no grounds for appeal.
    Re. all the above comments, we’ll see I guess but I don’t think there will be the room for lengthy disputes as such

  10. Question. What effect will the funding arrangement have on a budget eg what if post April a firm signs up on a DBA, then issues Multi Track proceedings? Is a budget filed? I think in theory yes (just as it will be for Defendant firms on fixed fees)

    I believe the previous posts regarding ignoring hourly rates to be wrong, with respect – the form (H) itself would not be so drawn if that we’re the case, although I agree the idiots in Power have never once looked at the extraordinary degree of argument over rates and grades in PI claim, because they’ve never looked down from their lofty heights in the High Court to see what happens in real life

    Also, what hourly rate would apply in a discounted CCFA case where the budgets are being filed, and what happens in the event the Defendant gets costs post Part 36 failure?

    What happens to a budget limit in DÅ when Part 36 applies at some mid point of various budgeting stages eg when discovery and exchange are in full flow when an offer is made? Will it be necessary to pro rata the budget when comparing against the final bill??

    Presumably you’ve all noted the change in Part 35 regarding experts fees approval when considering budget issues?

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