Costs budgets

Susan Dunn of Harbour Funding writing in Costs Lawyer magazine:

“We have had varied experiences with Costs Lawyers, who are a great help on detailed assessments and bill challenges at the end of cases. However, the profession has more to do in perfecting its approach to estimating how much a case is going to cost.”

I thought we were all meant to be brilliant at costs budgeting.

Costs management hearings

The Association of Costs Lawyers’ submissions to the Civil Justice Council on the impact of the Jackson reforms included:

“One court is dealing with case management on one day and then costs budgeting on a second day. This seems to be appreciated as it enables budgets to be adjusted to meet the case management decisions.”

It may be appreciated but it completely undermines the costs budgeting process. Case management and costs management are meant to go hand-in-hand. If the budgets appear disproportionate, the court adapts the case management decisions to reduce the work required and reduces the parties’ budgets accordingly. It should be clear from a properly drafted budget what impact reducing, for example, the number of expert witnesses will have. Or, at the very least, this information should be available at the case management/costs management hearing so the judge can make informed decisions. How can a judge make proportionate case management decisions if he does not know what size budgets these will produce?

Judges who are ordering split hearings are flying in the face of the judicial training on this.

Hallam Estates Ltd v Baker – Extensions of time for Points of Dispute

Lord Justice Jackson handed down yesterday an important decision on applications to extend time for serving points of dispute in Hallam Estates Ltd & Anor v Baker [2014] EWCA Civ 661. Master Gordon-Saker’s earlier sensible decision was reinstated.

The judgment contains a helpful “executive summary” (more of these please in judgments):

“In detailed assessment proceedings the paying parties applied for a reasonable extension of time in which to serve their points of dispute. That extension of time would not imperil any hearing dates or otherwise disrupt the proceedings. The costs judge granted that extension of time and subsequently rejected an application to set it aside.

The receiving party appealed to the High Court against the latter decision. The judge allowed the appeal on the grounds that (i) there had been non-disclosure and (ii) the costs judge had impermissibly granted relief from sanctions. The allegations of non-disclosure are now withdrawn. Furthermore, the costs judge was not dealing with relief from sanctions. He was making a case management decision about extension of time. The judge ought not to have interfered with the costs judge’s exercise of discretion.”

The decision does highlight one current problem area that parties apparently cannot agree such extensions without the court’s approval being sought:

“Pursuant to rule 3.8 (3) the court’s approval would have been required for any such agreement, but that would have been a formality. By way of digression I comment that rule 3.8 will shortly be amended so that in the ordinary way parties can, without reference to the court, agree extensions of time up to 28 days, provided that this does not put at risk any hearing date.”

Crucially, for applications for extensions made before expiry of the deadline:

“An application for an extension of the time allowed to take any particular step in litigation is not an application for relief from sanctions, provided that the applicant files his application notice before expiry of the permitted time period. This is the case even if the court deals with that application after the expiry of the relevant period. … It therefore follows that on 16th May 2013 the costs judge was dealing with an in-time application. This was a straightforward application to extend time under rule 3.1(2)(a). The principles concerning relief from sanctions which the Court of Appeal enunciated in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537; [2014] 1 WLR 795 are not applicable.”

A word of warning in respect of parties unreasonably refusing to agree to extensions of time:

“Nevertheless it was no part of my recommendations that parties should refrain from agreeing reasonable extensions of time, which neither imperil hearing dates nor otherwise disrupt the proceedings. The contrary is the case…”

Cap for provisional assessment costs

District Judge Marshall Phillips commenting at the Association of Costs Lawyers’ Annual Conference on the £1,500 cap for provisional assessment, stated that he would normally allow less for a £15,000 bill than a £70,000 bill.

This is sensible as the £1,500 is a maximum, not a minimum or fixed, amount.

Costs law – the judges speak

Views from the panel discussion at the Association of Costs Lawyers’ Annual Conference:

Master Campbell – late service of Replies, if they are helpful to the Court, may be allowed in.

Master Gordon-Saker – Replies are “rarely helpful”.

Regional Costs Judge Besford – Replies served late in provisional assessment cases might not be considered by the Court.

Master Hurst – Replies served late could be in difficulties without an application for permission.

Guideline Hourly Rates 2014

A reliable source at the Association of Costs Lawyers Annual Conference suggested that any movement in the new Guideline Hourly Rates is unlikely to be in an upwards direction.

You heard it hear first.

Or second if you were at the Conference.

Or third if you had heard this before the Conference and attended the Conference and have just read this.

Costs Lawyers’ Annual Conference

The Association of Costs Lawyers held their Annual Conference last Friday/Saturday and it proved to be another excellent event.

However, I do sometimes wonder whether I was listening to the same talks as everyone else.

A long list of speakers commented on the rosy future for Costs Lawyers.

Topics covered included progress with the new bill of costs format and Mr Justice Ramsey hoping this would be introduced later this year.

This is implementation of Lord Justice Jackson’s proposal, in his Final Report, that:

“In my view, modern technology provides the solution. Time recording systems must capture relevant information as work proceeds. The bill format must be compatible with existing time recording systems, so that at any given point in a piece of litigation a bill of costs can be generated automatically [my emphasis]. Such a bill of costs must contain the necessary explanatory material, which is currently lacking from the bills prepared for detailed assessment. Crucially, the costs software must be capable of presenting the bill at different levels of generality. This will enable the solicitor to provide either (a) a user-friendly synopsis or (b) a detailed bill with all the information and explanation needed for a detailed assessment [my emphasis] or (c) an intermediate document somewhere between (a) and (b). The software must provide for work which is not chargeable or work which is written off to be allocated to a separate file.”

Although it is clear this cannot actually be totally automated, it is equally clear that this will reduce bill drafting time by 70-80%.

Dominic Regan reminded us that Lord Justice Jackson has recently mooted the possibility of fixed fees for cases with a value of up to £250,000.

Then there were the comments that we are moving away entirely from an hourly rate approach to legal fees and there was no future for hourly rates.

Of course, none of this may happen in our lifetimes. Just look at the Jackson Report that was kicked into the long grass and is quietly gathering dust somewhere long forgotten. But if even half does…