Motto v Trafigura Ltd

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For those yet to read the preliminary judgment of Master Hurst, the Senior Costs Judge, in Motto & Ors v Trafigura Ltd & Anor [2011] EWHC 90201 (Costs) (15 February 2011) don’t make the mistake that I did when visiting BAILII and press the print button. (My invoice for five reams of papers and a new printer cartridge is on its way to Master Hurst.)

Given the Claimants’ bills of costs totalled £104,707,772.72 it is perhaps not surprising that this is a fairly lengthy judgment.

To give a feeling for the nature of the detailed assessment, in the words of Master Hurst:

“I have been given electronic copies of the bills, which I am told run to some 55,000 items, all of which are challenged in the Points of Dispute. For the purpose of these key issues I was presented with in excess of 60 ring-binders of documents, and in spite of the remarks of the President of the Queen’s Bench Division, Sir Anthony May, in Khader v Aziz [2010] EWCA Civ 716; [2010] 1 WLR 2673, being drawn to the attention of the parties, the Defendants’ skeleton argument, including supporting schedules, ran to over 1,000 pages, this being in addition to a witness statement of Mr Nurney dealing with the key issues, which, with exhibits, ran to over 3,000 pages. The Claimants’ skeleton runs to 73 pages, and their supporting witness statements, including exhibits, run to 923 pages.”

There were three barristers acting for each party, including five QCs. However, given Nick Bacon QC acted for one side and Ben Williams for the other, one does have to wonder whether the others were somewhat surplus to requirements.

The scope of the judgment covers a wide range of preliminary issues. Although it is important to remember that this judgment is not binding, and there are some aspects of the judgment that other costs judges in the Senior Courts Costs Office are not following, this judgment is nevertheless likely to be produced at countless detailed assessments in the future as “authority” for various propositions. I will therefore try to put together a handful of short posts to discuss some of the more interesting aspects of this decision.

Fixed costs – Another Jackson myth

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At this year’s Association of Costs Lawyers’ National Conference, one of the guest speakers, a regional costs judge, observed that the introduction of fixed fees for fast-track personal injury matters was not something that those present needed to be concerned about as most fast-track matters were currently dealt with by way of summary assessment.

The logic was presumably that costs lawyers did not currently see much fast-track costs work as this was dealt with by way of summary assessment at the conclusion of a trial and the introduction of fixed fees would therefore make no real difference to costs lawyers’ workloads.

It is noteworthy that even a judge with a genuine interest in legal costs related matters should have reached this conclusion. This is much the same mistake that Lord Woolf made with his civil justice reforms. He assumed that the costs of preparing for trial would have to be incurred at some stage in any event and it therefore made sense for such costs to be incurred at an early stage in the hope that this would increase the likelihood and speed of settlement. What he overlooked was the fact that the vast majority of cases settled pre-trial and often with limited disclosure. His front-loading of case preparation meant that a large amount of expensive work is now unnecessarily incurred.

Members of the judiciary, inevitably, only see the cases that are litigated and assume that these are typical with a large number of these making it all the way to trial. In reality, of course, the vast majority of cases settle pre-proceedings. For litigated matters, most settle well before trial. Even for those cases that do run close to trial, a high proportion still settle before they actually reach the door of the court. None of these cases are dealt with by way of summary assessment. For all these fast-track claims it is necessary for someone at the receiving party’s end to quantify the costs that have been incurred and then for someone at the paying party’s end to scrutinise the costs claimed. Some of those cases will make it all the way to detailed assessment.

For most law costs draftsmen working in the personal injury field, fixed costs for the fast-track is indeed something to worry about.

Costs budgeting

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Is costs budgeting and costs management going to come to the rescue of costs lawyers and law costs draftsmen once Jackson in implemented?  My article on this topic can be read on the Solicitors Journal website.