Regional SCCO please


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Iain Stark, chairman of the Association of Costs Lawyers, was recently reported on the Legal Futures website, in connection with the plan to extend the provisional assessment pilot nationwide, as suggesting that provisional assessments should be handled by regional costs judges, or alternatively that regional costs officers should be appointed.

This is such a no brainer that I really can’t understand why it was not implemented long ago. As the number of detailed assessment hearings will start to decline with the introduction of the Jackson Reforms and roll out of provisional assessments the Senior Courts Costs Office could probably cover the whole of the South of England and a second court could cover the North. You would only need a handful of costs judges/costs officers in the Northern SCCO and the time freed up for other members of the judiciary would cover the “extra” costs of having dedicated judges. Indeed, it would almost certainly lead to an overall saving as full time costs judges/officers invariably deal with detailed assessment hearings much faster than those with little or no experience of costs. The time savings would be even more obvious for provisional assessments.

I’ve yet to meet a costs practitioner against this idea (although I suppose there might be one or two who would hate matters being moved away from their “friendly” local DJ and having the matter looked at objectively in a “neutral” court).

Such a move would bring a large(r) measure of consistency to costs judgments and enable costs professionals to give more accurate advice to clients, thus further reducing the number of cases that run the distance.

The system has worked perfectly well since all cases in London have been dealt with in the SCCO (allowing for the fact they are somewhat overworked at the moment) and would work equally well nationally.

What is there not to like?

Compensation culture


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One of the pleasures of writing the Legal Costs Blog is the comments that readers add to posts. These are usually informative and thoughtful. Sometimes they are critical of the contents of something I have written. Sometimes these are outright (anonymous) personal attacks. I take the view that if one wishes to engage in this type of social media then one has to allow for this type of response. My policy is that so long as comments are not obscene or crude SEO spam, then I allow it in.

Over then to the Sound Off for Justice website. The very name of this campaign suggests it is all about free speech. They have a blog and the blog has a section for readers to add their comments.

The other day, in response to a post headed “Do you support the government’s ripping up of Magna Carta?”- dealing with proposed cuts to the legal aid budget – I tried to post a comment saying I was not aware legal aid had been around in 1215. Admittedly, this was rather an easy target but what do they expect from making comments suggesting that access to the free services of a lawyer has always been the God given right of every Englishman? (Legal aid was first established in this country in 1949.) As it was, the comment was not approved.

I tried again in response to their post headed: “Jackson Reforms Part One: The Compensation culture is a myth”. This consisted of the typical selective use of statistics. So I tried again with the following comment:

“Yes. Let’s look at the truth.

The BRTF’s conclusion that the compensation culture was a myth was based on the fact the total number of claims between 2000 and 2003 were broadly flat and then went down in 2003/2004. A reasonable conclusion based on the evidence.

The Young Report only commented on EL injuries, which have shown a long term decline (probably due to changes in the numbers employed in heavy manufacturing and changes to asbestos disease law).

Now look at CRU figures for registered RTA claims:

2006/07 – 518,821
2007-08 – 551,905
2008/09 – 625,072
2009/10 – 674,997
2010/11 – 790,999

A 52% increase over the period.

CRU figures for clinical negligence:

2006/07 – 8,575
2007-08 – 8,876
2008/09 – 9,880
2009/10 – 10,308
2010/11 – 13,022

A 52% increase.

CRU figures for total claims registered:

2006/07 – 710,784
2007-08 – 732,750
2008/09 – 812,348
2009/10 – 861,325
2010/11 – 987,381

A 39% increase

Damn that ‘compensation myth’.”

Again, it didn’t make it past the censors.

If you’re not prepared to allow criticism, turn off the comments option.

RTA portal to be extended together with fixed costs


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As widely predicted, the Government has announced its intention to extend the RTA portal scheme for cases worth up to £25,000 and also to extend this into employer and public liability personal injury cases. The Government also intends implementing a system of fixed recoverable costs, similar to that proposed by Lord Justice Jackson in his review of civil litigation costs. Interestingly, a cautious approach seems to have been adopted with consideration of timing “following a full evaluation of the existing RTA PI scheme” and further consultation with key stakeholder over details.

The small claims track limit will be increased from £5,000 to £10,000 but the limit for personal injury and housing disrepair claims remaining the same.

An interesting footnote to the various proposals announced is the plan for a single county court: “The single county court will replace the current county court structure by removing the geographical and jurisdictional boundaries that enable county court houses to represent the district in which they are located and to operate with their own identity”.  An end to forum shopping? (Yes, you know who you are.)

Is there anything left on Jackson’s wish list that has yet to be ticked off?

Need to serve statement of costs


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Forthcoming change to Costs Practice Direction deletes the current CPD 45.3:

“No party should file or serve a statement of costs of the detailed assessment proceedings unless the court orders him to do so.”

That will mean that the existing CPD 13.5(4) will kick in:

“The statement of costs must be filed at court and copies of it must be served on any party against whom an order for payment of those costs is intended to be sought. The statement of costs must be filed and the copies of it must be served as soon as possible and in any event –

(b) for all other hearings, not less than 24 hours before the time fixed for the hearing.”

I wonder if this was intended.  The current system works perfectly well, even if it does sometimes cause some nasty shocks at the end of a hearing.  

Access to Justice Action Group explains


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I recently commented on the apparent contradiction between Andrew Dismore’s, co-ordinator of the Access to Justice Action Group, letter to the Guardian newspaper predicting that “there will be at least 25% fewer claimants” as a result of the proposed changes to the no win, no fee system and his other prediction, in relation to clinical negligence matters, that the proposed changes would lead to “an increase in the number of cases of 1/3rd”.

Andrew has kindly elaborated.

The prediction that there will be a 25% drop in overall claim number is reached by two routes, firstly, by making a comparison with the number of claims pursued in Scotland. In Scotland, additional liabilities are not recoverable from the other side. There are 25% fewer claims reported to the CRU for Scotland, on a pro-rata basis given the size of the population, compared to the number of claims brought in England and Wales. Scottish Sherriff Court starts compared with county court case numbers produces a similar disparity. It is therefore assumed that if recovery of success fees and ATE premiums ends here, it will lead to claims numbers reducing to a similar level as seen in Scotland.

Secondly, an analysis was undertaken of 69,000 claims pursued via a claims management company. New claims accepted by the claims management company are offered to different firms of solicitors unless and until one is prepared to take the case on a CFA basis. Of these claims, two-thirds were accepted by either the first, second or third firm to be offered the claim. The balance were accepted by the fourth to twenty-fourth firm offered the claim. AJAG predict that it is this one-third of cases that will be considerably less attractive once success fees and ATE premiums cease to be recoverable and therefore estimate that 25% of the total claims currently run will not be taken on.

Different considerations are thought to apply to clinical negligence claims, which represent a tiny proportion of overall claim numbers. Currently a high proportion of claims are accepted by solicitors but then turned down by either the Legal Aid Board or by ATE insurers, and therefore do not proceed. ATE insurers apparently turn down two-thirds of cases presented to them. This acts as a filtering process. If Legal Aid and recoverable success fees ends for these claims it will remove this filtering process and mean more claims are pursued. This will be exacerbated by Qualified One-Way Costs Shifting (QOCS). Without the risk of adverse costs it will encourage more claims to be brought that might not otherwise have been.

Andrew Dismore does not consider there to be a comparable ATE filtering process for most non-clinical negligence claims. Therefore the removal of recoverable ATE premium will not lead to a corresponding increase in other types of claim.

It is not believed that QOCS will lead to any corresponding increase in numbers in non-clinical negligence claims. This is because current Government plans are to allow recoverable ATE premiums in respect of disbursements for investigation expert reports in clinical negligence claims. That, combined with QOCS, means claimants in clinical negligence claims, can litigate with little risk. However, because there is no provision for the claimant’s own disbursements in failed non-clinical negligence claims, the impact of QOCS in that area will not remove the deterrent effect of this risk on claim numbers.

This is the analysis that leads to the conclusion that overall claims will reduce by 25% but clinical negligence claims will increase by 1/3rd.

Death by a thousand cuts


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Some people are “glass half full” types.  Some people are “glass half empty” types. Some people are “who nicked my bloody glass” types.  

Forget for the moment the other Jackson proposals and what impact they may have and just look at two forthcoming changes to the Costs Practice Direction:

• An end to lengthy points of dispute
• An almost complete end to replies

Then add in Jackson’s green light to rolling out provisional assessments across the country, effectively ending detailed assessment hearings for bills under £25,000.

This is before we even start to get to the heart of the Jackson reforms.

Death by a thousand cuts for many working in legal costs?

Replies to Points of Dispute – Goodbye


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One of the superficially innocuous forthcoming changes to the Costs Practice Direction relates to the contents of Replies. Replies are currently, of course, optional and one therefore might have expected these only to be drafted in cases, and in relation to specific disputes, where it might usefully narrow the issues or where positive concessions are being offered. Not in this writer’s experience.

CPD 39 will now read:

“39.1 A reply served by the receiving party under rule 47.13 must be limited to points of principle and concessions only. It must not contain general denials, specific denials or standard form responses.

39.2 Whenever practicable, the reply must be set out in the form of Precedent G.”

Sharp intake of breath from a large number of law costs draftsmen and costs lawyers. This particular gravy train is coming to a crashing halt.

The example of a point of principle given in the new Precedent G is: “The claimant was at the time a child/protected person/insolvent and did not have the capacity to authorise the solicitors to bring these proceedings.”

A challenge to whether a matter required a Grade A fee earner or whether it was reasonable to instruct non-local solicitors is not a point of principle. No reply needed or allowed (note the use of the word “must” in CPD 39.1). A challenge to the number of hours spent in attendances on the claimant is not a point of principle. A challenge to a conference with counsel is not a point of principle. A challenge to the level of success fee is not, under ordinary circumstances, a point of principle (not that we’ll have those shortly). With the changes (clarification) of how points of dispute should look, we’ll no longer have item-by-item challenges to document schedules. Even if we did, this is not a point of principle and no reply allowed.

There are no doubt plenty of law costs draftsmen and costs lawyers who make almost as much money drafting prolix replies as they do from anything else they do. I currently have a case where I drafted points of dispute running to 8 pages. In response I received replies running to 34 pages which resembled a skeleton argument, but did nothing to narrow the issues. Those days are about to end.

In fact, there is now no justification to continue the current abuse of the system until the rule change formally comes into force. Next time, as a receiving party, you receive points of dispute, pause and reflect. Unless there is a point of principle or you are making a concession, no need for replies. That is why they are optional.

In future, most points of dispute will not justify replies. Where replies are justified they are likely to be limited to a few narrow points and it will be rare for more than 30 minutes to be required on the task.

I look forward to making my first application to have replies struck for failing to comply with CPD 39.1.

Should no-win, no-fee be banned?


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Has the Guardian newspaper gone mad? Well, obviously yes, but nothing new there. Rather, what incoherent drivel is their latest poll?

The headline reads:

“Should no-win, no-fee be banned?”

It then continues:

“The legal aid bill proposes altering conditional fee agreements so that successful claimants will have to pay their own lawyers’ fees. Lord Prescott says this will affect vulnerable individuals. Do you agree?”

The first sentence of this is obviously entirely different to the headline. No ban is proposed. Those with any understanding of the proposed changes know that the sentence: “The legal aid bill proposes altering conditional fee agreements so that successful claimants will have to pay their own lawyers’ fees” is inaccurate. Firstly, it proposes only that successful claimants should pay an element of their solicitors’ fees (the success fee). In any event, since when did the current law make CFA Lites compulsory? Solicitors have always been able to make their claimant clients pay something towards their fees. This is the solicitor/own client element.

And what does this mean: “Do you agree?”. There may be a number of propositions one might be prepared signing up to, but one that says you agree with Lord Prescott is unlikely to be one of them.

And then we get the actual question, which is totally different again: “Should CFAs be reformed?” Entirely different to what has gone before.

The two answers available are:

“Yes – they limit freedom of expression by making fighting libel cases inhibitingly expensive for newspapers”

Or

“No – they allow individuals fighting multinationals access to the courts”

That’s totally different again. You might agree or disagree with the proposal that CFAs should be “reformed” but not necessarily for the reasons given in the answers.

The Electoral Commission would have an aneurysm.

None of this nonsense has stopped the Access to Justice Group promoting this poll or APIL excitedly tweeting: “No-win no-fee should NOT be reformed according to 94.4% (currently) in the @guardian poll bit.ly/wo7rGh”.

Given those who vote are therefore likely to be either members of the public who know nothing about the current law or the proposed changes, and will be none the wiser after reading the incoherent preamble to the question, or claimant lawyers furiously clicking away at the “No” button, I’m sure the Government will give the result of this poll the weight it deserves.

Open offers in detailed assessment proceedings


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The forthcoming changes to the Costs Practice Direction substitute for paragraph 35.3:

“The paying party must state in an open letter accompanying the points of dispute what sum, if any, it offers to pay in settlement of the total costs claimed. The paying party may also make an offer under Part 36.”

I really don’t know what to make of this.

Under the current rules, which will remain, Points of Dispute must be served within 21 days of service of the Bill (subject to any extension being obtained). Receiving parties have the luxury of 3 months to prepare a Bill (why the huge difference in timescale?). It can be bad enough for paying parties to instruct a costs draftsman, get the papers to them, the costs draftsman to draft the points of dispute (which can require several days of reading in time), arrange for approval and serve within 21 days. There are many cases where quantifying an offer and obtaining instructions (especially where there are multiple defendants or insurers) within 21 days is simply not realistic.

What will be the sanction for failure to make the open offer? The new rules are silent. Does it invalidate service of the Points of Dispute? Or does one just shrug?

What happened to the suggestion of being able to make a conditional offer, such as where there was an issue over a retainer?

The paying party’s offer is meant to be contained within an open letter. Does this mean it can be referred to during a detailed assessment hearing? If so, it potentially prejudices paying parties. There is no corresponding requirement for the receiving party to make an open offer.

What role does this open offer play? The rule is absolutely silent. We are expressly told that the general rules relating to Part 36 will apply in the future to assessment proceedings. A paying party can therefore make an improved Part 36 offer at any stage, notwithstanding the open offer.

Costs Practice Direction 46.1 currently states:

“An offer made by the paying party should usually be made within 14 days after service of the notice of commencement on that party. If the offer is made by the receiving party, it should normally be made within 14 days after the service of points of dispute by the paying party. Offers made after these periods are likely to be given less weight by the court in deciding what order as to costs to make unless there is good reason for the offer not being made until the later time.”

Although most courts will currently take into account offers made long after 14 days, offers made at a very late stage are often given less weight. CPD 46.1 is to be scrapped and a Part 36 offer may therefore be made at any stage. A paying party may not have any costs protection until they do make a good Part 36 offer (subject to how “successful party” is to be interpreted for the purposes of CPR 44.3(2)), but overall the change to the rules makes an early offer less important than under the current rules. Why then the mandatory open offer requirement?

If the normal Part 36 rules will apply to assessment, which is what we are told, where does the open offer come into play? For example, a paying party makes an open offer of £10,000 on a £100,000 bill. Six months later the paying party makes a Part 36 offer of £90,000. At assessment the bill is assessed at £80,000. The receiving party will get their costs from 21 days after they made their Part 36 offer plus interest on those costs. What relevance then the open offer of £10,000? Why have a rule requiring an offer to be made that becomes irrelevant once a better Part 36 offer is made?

Or, is this to deal with the issue I raised the other day about the fact the new rules appear to remove the presumption a receiving party is entitled to the costs of assessment? Is the open offer to be the key factor the court takes into account unless and until a successful Part 36 offer is made? Will beating the open offer be treated as meaning the receiving party is the successful party for the purposes of Part 44.3(2) and, if not, that the paying party is the successful party?

Rules committee, please explain.

The new rules are presumably meant to simplify matters but I am struggling with the basics at this point. I’m going to have a right go at the costs lawyers sitting on the rules committee who came up with this mess. Please remind me of their names again.

New Points of Dispute format


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The upcoming changes to the Costs Practice Direction include amendments to the rules concerning Points of Dispute.

The current CPD 35.2 reads:

“Points of dispute should be short and to the point and should follow as closely as possible Precedent G of the Schedule of Costs Precedents annexed to this Practice Direction.”

This is to be replaced by:

“Points of dispute must be short and to the point. They must follow Precedent G in the Schedule of Costs Precedents annexed to this Practice Direction, so far as practicable. They must:

(1) identify any general points or matters of principle which require decision before the individual items in the bill are addressed, and

(2) identify specific points, stating concisely the nature and grounds of dispute. Once a point has been made it should not be repeated but the item numbers where the point arises should be inserted in the left hand box as shown in Precedent G.”

You will note the use of the word “must” in place of “should”. There is now no scope for arguing over the point.

I still receive, on a virtually daily basis, claimants’ Replies arguing that a dispute that simply says: “Hourly rate excessive, reduce to £150” or “Time claimed on documents excessive, reduce to 50 hours” is defective as failing to give sufficient reason for pleading a reduction. These are clearly written by law costs draftsmen or costs lawyers who have never bothered to read the current Precedent G (click to view). We will now have a new Precedent G (click to view) which “must” be followed. Consider the following examples taken from it:

“Point 1 – General point – Rates claimed for the assistant solicitor and other fee earners are excessive. Reduce to £158 and £116 respectively plus VAT.”

“Point 2 – Point of principle – The claimant was at the time a child/protected person/insolvent and did not have the capacity to authorise the solicitors to bring these proceedings.”

“Point 5 – (47) – The total claim for work done on documents by the assistant solicitor is excessive. A reasonable allowance in respect of documents concerning court and counsel is 8 hours, for documents concerning witnesses and the expert witness 6.5 hours, for work done on arithmetic 2.25 hours and for other documents 5.5 hours. Reduce to 22.25 hours.”

Note the absence of references to case law, the absence of lengthy (any?) justification for the reductions proposed and the total lack of a line-by-line challenge to the document time. Failure to comply with Precedent G is likely to lead to costs sanctions. At best, the time that will be allowed for drafting Points of Dispute will be reduced to the time that should have been spent on the task to comply with Precedent G.

None of this is meant to be particularly revolutionary. This is how it was always meant to be done and what costs judges in the Senior Courts Costs Office have been clamouring for over the years. The problem has been that the costs profession has ignored the existing guidance.  This should no longer be possible (if judges do their jobs properly).

Although these “new” rules will not be retrospective, given we now know what is to be expected (and this is no more than what the current Precedent G requires), law costs draftsmen and costs lawyers would be well advised to start following this guidance immediately.

Note the reference to: “Once a point has been made it should not be repeated but the item numbers where the point arises should be inserted in the left hand box as shown in Precedent G”. This is why every individual item on a bill should be numbered. Those who draft bills and those who produce bill drafting software, please note. It’s no good giving all the profit costs a single item number.

The one area where I have concerns is how this links in with the roll out of provisional assessments. Fine if you had regional costs centres (the one failure of Jackson in failing to recommend this) or if everything was listed before a regional costs judge. However, if a district judge is expected to conduct a provisional assessment on paper in one hour faced with such Points of Dispute, are they really all capable of dealing with a dispute as brief as “The claimant was at the time a child/protected person/insolvent and did not have the capacity to authorise the solicitors to bring these proceedings”?

I can’t be alone in having attended a detailed assessment hearing where there is a Wraith v Sheffield Forgemasters Ltd dispute only to discover the judge is unaware of the case or what is it authority for. Will they be expected to research the law without being referred to any case law?  Will they go away and locate copies of judgments if referred to the case law (all in one hour)?  How is one expected to plead this kind of point with no knowledge of the level of costs knowledge the judge will possess? It is often a mistake to assume a judge on assessment has any costs knowledge.

Oh, and some of you might have realised that complying with these rules will be less labour intensive and reduce the fees that can be properly charged.