Extension of fixed costs

Lord Justice Jackson has called for the development of a fixed costs scheme for all claims with a value of up to £250,000. Kerry Underwood’s blog helpfully sets out a summary of how this might work and concludes:

“The potential massive losers here are barristers”

Barristers? Sorry? There is one much more important group I can think of that might be losers if this were to happen (and I’m not just talking about costs officers in the Senior Courts Costs Office).

Interestingly, the recent major extension of fixed costs in the fast-track and the end to recoverability of success fee and ATE premiums has already ended much of the clamour for further major costs reforms from claimants and defendants. Once the main run-off of pre-Jackson cases has gone through the system, one would have expected pressure from the judiciary for further change to also end if it was not for one thing: costs budgeting and costs management (or is that two things?).

The new Senior Costs Judge Master Gordon-Saker recently launched a strongly worded attack on the lack of training for judges in costs budgeting. He reported how, at a recent Jackson training session he attended, the group of judges he was with were asked to estimate the costs of a five day professional negligence case at the High Court. The results were estimates varying from £30,000 to £150,000.

We may well see the situation that the nightmare unleashed by the ill-thought-out introduction of costs budgeting will, within a year or two, cause the judiciary (and possibly practitioners alike) to conclude a massive extension of fixed fees is the only solution to the mess that has been created. Indeed, Lord Justice Jackson highlighted one of the advantages of the extension of fixed costs to be:

“Such a scheme may be particularly welcome now, because it will dispense with the need for costs management and costs budgeting in cases valued at less than £250,000.”

Some possible alternatives include:

1. Suspending costs budgeting until there is a new bill of costs format that mirrors costs budgeting phases.

2. A comprehensive survey of costs budgets approved to date to see whether there is any consistency in amounts allowed (or logic to the figures) and whether the amounts allowed are likely to have any downward pressure on the overall costs that may be awarded at the conclusion. The whole purpose of costs budgeting was to control costs. To the best of my knowledge, no attempt has been made to determine (from proper evidence rather than anecdote or self-selecting survey) whether this is achieving that aim.

3. Intensive costs management training for judges (surely a minimum of one week) with no judge allowed to make costs management orders until that training has been completed and the judges understanding properly assessed.

4. A clear and sensible timetable put in place for the exchange and filing of budgets so 1000s of these documents do not continue to be prepared that then serve no useful purpose (either because the matter settles before a costs management hearing or the court decides not to make a costs management order) other than wasting the parties’ time and money.

5. Scrapping costs budgeting for cases where estimated costs do not exceed £100,000. Replace then with costs estimates (giving a global figure) from which the court can make a costs management order. It is wishful thinking on the part of costs budgeting evangelists that a phase-by-phase budget for such cases is likely to produce a more rational, reasoned or fair overall figure than a global costs estimate. This would save an enormous amount of time and expense to the parties and the courts, both at the time of making the costs management order and at any subsequent detailed assessment hearing avoiding arguing over phase-by-phase issues.

No doubt the rules committee would welcome any other helpful suggestions.

10 thoughts on “Extension of fixed costs

  1. “… It is wishful thinking on the part of costs budgeting evangelists that a phase-by-phase budget for such cases is likely to produce a more rational, reasoned or fair overall figure than a global costs estimate…”

    The words of someone who has never seen it happen in action.

    Global is a word any true costs specialist or lawyer should despise.

  2. Hybrid Fixed Costs
    Extend fixed cost upto £250K Damages. Allow all civil cases to be budgeted at Allocation stage and just before Trial to ensure that the fixed fees are economical to the work carried out. If budget higher or lower than fixed costs carry out provisional type assessments on budgets.

    With decrease in cost hearings at the SCCO make it the designated court to deal with all cost matters.

  3. Lord Jackson’s comments further demonstrate how disconnected our legal profession really is.

    I welcome change and the method of how things evolve. However I also support democracy and the idea of one person’s vision evolving by way of shared input into something that is workable and required.

    Prior to Lord Jackson making the comments he did, I wonder whether he should have had a meeting with the chair person and council members of the Association of Cost Lawyers to obtain constructive feedback from industry members. I can only assume that this was not the case as there has been no publication from the ACL prior to or after the statement made by Lord Jackson.

    As stated above, it’s not the idea suggested by Lord Jackson that I do not agree with, it’s the method in which Lord Jackson has hinted further changes.

    Imagine how the perspective Cost Lawyers are now feeling having paid their course fees, I am sure that they feel pretty nervous as to what the industry landscape will look like after their course concludes.

    Also imagine how directors and shareholders feel, who have already made significant changes to their business to make it successful and are now dealt further uncertainty.

    So the one place that members of our industry should be able to turn you would have thought would be the Association of Cost Lawyers. I am bit startled that there is no mention of anything regarding the speech by Lord Jackson from the Association of Cost Lawyers.

    Earlier in the year a Master of the SCCO advised that the SCCO had not received many requests for provisional assessment and that if requests were to be received that the court was more than equipped to deal with them. Why then is it taking over 3 months for the SCCO to deal with such requests, and furthermore has the ACL written to the court on behalf of its members to convey the issue, and presumably dissatisfaction of its clients?

    As I have said I welcome change and the method of how things evolve, and maybe the ACL has reached a point in its existence whereby it urgently needs to evolve, and perhaps to act for the industry as a whole rather than just for Cost Lawyers.

    I was once advised in a leading company that there used to be board meetings with directors to discuss what hoover should be bought for the cleaner, these meeting were very time consuming and very often unconstructive. The Chairman decided to ask the cleaner what type of hoover was required. By using this simple example the company learnt to involve the people who carry out their employed roles at the company and doing so the company became a very successful company. It had learnt that shareholders, directors may have the authority and the capital but they do not always have the knowledge.

  4. Is it not time for the ACL to close shop?
    Where was the guidance on matters leading up to Jackson? J codes? new format bills, proposed fixed costs for cases up to 250k, position and updates on the backlog at the SCCO ?

  5. Better Together, 8.37 am

    Surely there can only be one answer to the question you posit. Without a doubt, the answer is a Henry. I for one have never come across a more functional, sturdy hoover.

  6. The ACL, has never been anything more than representative, of it’s closed shop hierarchy, and champion of it’s blinkered view that CLowns are better than monkeys, because they sit for a days (paid for) lecture that tells them so.
    And while they play silly games, their members and the profession gets put out to pasture
    I am not a CLown, neither am I monkey. And I will be here in 20 years still having adapted to what’s needed, as costs will always be the heart of litigation, if only the CLowns had seen it

  7. Breaking news from the ACL this morning “Jackson LJ calls for more fixed costs”……

  8. Simple fact is that if the CLSB didn’t allow CLs two hours for reading the ACL’s monthly magazine within their CPD points allocation, a lot of CLs wouldn’t renew their membership. I know that I begrudge writing a cheque out every year. The ACL are essentially useless.

  9. There is an article in the Telegraph today, “Britain is the cash cow of Europe for Lawyers”, with one of the most expensive legal aid systems. It also advises that DJs are paid around £100,000 per annum and High Court Judges around £197,000 per annum. Is this common knowledge? Prompted me to query why no one has raised the cost of the judiciary throughout the cuts consultations? Jackson happy to sit in his ivory tower and put thousands of people out of employment…

  10. Will the admin person ban this idiot who keeps posting “CLowns”. This is person is likely to be a failed Solicitor, an overpaid numbers guy or simply someone who either failed the exam or never never had the b*lls to sit it!

    Why are people blaming the ACL? Dont get me wrong i’ll be the first to criticise them if need be but this guy needs some therapy or even better some mediation with Mr Stark haha.

    If he does respond to this post force him to put his name to his words so he can qualify his comments, I suspect he will not (coward) and the reason for that is that i suspect he is probably one of these new age drafters who has never heard of a green form or scale 1 and thinks that provisional assessment is a new idea.

    In other words…. without the ACL (for all their faults) we wouldnt be where we are today, so if you dont like it ……. go and do politics, we need people who are not afraid to speak their minds!

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