You wait ages for an interesting legal costs decision from the Court of Appeal and then two come along together.
Monthly Archives: February 2010
Middleton v Vosper Thornecroft (UK) Ltd
In the event, this decision was not decisive to the outcome of the detailed assessment and I still managed to comfortably win on the Defendant’s offer. However, I was left with the strong feeling that the judge was wrong but unable to identify quite where he had gone wrong. The best I was able to do was note that the heading to the section listing the documents to be served is worded: “Commencement of detailed assessment proceedings”. Common sense therefore suggests that the timing for service of the documents is at the same time as commencement of the detailed assessment proceedings (ie when the bill and notice of commencement is served, as per CPR 47.6).
Before travelling to the hearing I had put in my briefcase a copy of a judgment I had come across on Lawtel that looked interesting. I didn’t have a chance to read this on the day of the hearing. You can imagine how annoyed I was when, a few days later, I got around to reading the judgment only to discover it was exactly the case I needed.
Business Environment Bow Lane Ltd v Deanwater Estates Ltd
Where a claimant has picked up one or more costs orders in its favour on the way to a trial, but fails very badly at the trial (for example due to exaggeration), can the costs judge assess those costs at nil on the footing that they were not, as it turned out, reasonably incurred because they had been incurred in an action that sought an exaggerated sum which should never have been claimed? No, according to Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2009] EWHC 2014 (Ch).
Specialist costs counsel
The 2010 edition of the Association of Law Costs Draftsmen’s diary contains advertisements from six barristers’ chambers holding themselves out as specialists in legal costs matters. Five of these give the names of the barristers in their costs teams. The number of named individuals totals 49. There are a number of other chambers who have costs specialists who did not advertise in the diary. So how many specialist costs barristers are there? There were a large number of names I did not recognise and it may be that there is a certain amount of wishful thinking going on as to who can be properly described as a costs specialist. Alternatively, it may be that they operate in areas of costs law that I do not deal with and our paths therefore do not cross.
A number of years ago, and before there were anything like the current number of specialist costs counsel, a senior judge (can anyone remind me who?) expressed displeasure about the fact that the complexity and number of legal costs disputes had reached the level that some lawyers were basing their whole career on costs matters.
Quite how many will be left in the post-Jackson world remains to be seen but their prospects are probably better than those of a large number of costs draftsmen.
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Jackson Report – Success fees
Arguably, Lord Justice Jackson’s most significant recommendation, in his Final Report, is an end to recovery between the parties of success fees.
This proposal will lead to obvious and huge savings to defendants. Those who think that current political uncertainty will lead to much of the Report being shelved should think again. Whichever party is in power after the general election, there will be a pressing need to control public expenditure. In terms of the money paid out by the NHSLA alone, and ignoring all the other areas where the public purse pays for litigation, this will be a compelling reason to adopt this recommendation. This is great news for defendants but really bad news for claimant lawyers.
Yes, solicitors can still enter into CFAs with their clients and charge a success fee. But there are two big problems. Firstly:
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Heavy advertising in recent years telling potential claimants that they will keep 100% of their damages will make it very unattractive for claimant solicitors to now start taking a cut of their clients’ damages. There will be enough firms who decide to take the hit themselves that others will be forced to follow. Success fees in personal injury claims are likely to disappear. For the lower-end RTA claims, the loss of the 12.5% success fee will not be dramatic but it will come straight from solicitors’ profit margins. It is likely to discourage some claims from being pushed to trial where the incentive of the automatic 100% success fee will disappear. On the other hand, the removal of the 100% threat will encourage defendants to take more cases to court, especially in relation to quantum disputes.
Even if firms do feel able to charge success fees, Jackson LJ’s proposed cap will limit to a large extent the amount that can be charged. Not only is a cap of 25% of damages recommended, but Jackson LJ’s master-stroke is that this cap will exclude damages referable to future loss. The element of damages that claimants will be required to pay as success fee will be limited to the general damages and past losses. In heavy litigation, and in particular catastrophic injury and clinical negligence claims, the cap is going to bite significantly in a high proportion of claims. This will have a big impact on profit margins for some firms.
The claimant lobby has been arguing that this proposal will reduce access to justice. This argument fails for a number of reasons. These proposals largely revert the position to the one that existed prior to the Access to Justice Act 1999. As Jackson LJ happily notes: “During 1996 APIL confirmed that those arrangements provided access to justice for personal injury claimants and that those arrangements were satisfactory”. He further notes: “In this regard, it is significant that in Scotland personal injury cases are conducted satisfactorily on CFAs, despite the fact that success fees are not recoverable”. Until recently, most BTE work and trade union work was conducted on unwritten speccing arrangements. It is not obvious that recoverability of success fees brought about an increase in the kind of claim that was pursued. The same kind of claim will still be run but the profit margins will shrink.
The Jackson package, and in particular this recommendation, is designed, at least in relation to personal injury work, to reduce legal costs at the expense of claimant lawyers. And that can be no bad thing.
Dr Friston’s Civil Costs – A short teaser
I have recently been commenting on the forthcoming publication of Civil Costs – Law and Practice, a new book by Dr Mark Friston. To give you some idea as to the scope and ambition of this book have a look at this sample chapter (external link).
This chapter deals with the important topic of contracts made away from solicitors’ places of business. If this looks like a difficult and obscure subject that you can ignore, think again. If a solicitor’s paperwork is not in order their bill will be unenforceable. In the current edition of Claims Management magazine, Andrew Twambley, managing partner at Amelans, wrote: “Well, I have a word from the dark side – from the deepest annals of defendant burrows, from behind the largest rock – that an attack is imminent. Mark my words, brace yourselves and hope you are not the ones chosen by them, to be the receivers of test litigation”.