New costs rules

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The new CPR rules implementing large swathes of the Jackson costs reforms are apparently due to be released today.

Because recoverability of additional liabilities is due to end, large parts of the CPR and Costs Practice Direction will become redundant. The relevant parts of the CPR and CPD are therefore due to be have a complete makeover with the end result anticipated to me much shorter and, in theory, easier to navigate.

The only problem is that recoverability is not due to end retrospectively. We will still have several years of claims where the old rules will apply. To put this in context, a file has just landed on my desk where it looks suspiciously as though the CFA will be found to be in breach of the CFA Regulations notwithstanding that those Regulations were revoked as far back as 2005. Eight years down the line the old rules are still relevant.

How will legal publishers deal with this? Will they consign the old rules to Volume 2 of the White Book? Don’t throw out your old copy on 1st April.

Costs Lawyer Standards Board

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The Costs Lawyer Standards Board has started sending newsletters to costs lawyers updating them as to its work.

Included in the first newsletter was a report on a disciplinary hearing.

This reported that:

“In brief, Costs Lawyer W failed to make required disclosures on their signed Application for Reinstatement and signed Application for a Practising Certificate relating to offences. After robust discussion on the allegations, the evidence before it and after hearing Costs Lawyer W, the Conduct Committee found against Costs Lawyer W on all the alleged code/rule breaches.”

The Costs Lawyer had his practising certificate suspended for two years and was fined. His subsequent appeal failed.

This kind of information is invaluable. Costs Lawyers are entitled to employ non-Costs Lawyers and delegate their own rights, such as rights of audience, to non-Costs Lawyers.

In the event that I receive a job application from somebody called W, I will immediately know they are unsuitable for employment.

Equally, once their two year suspension is over, if a Costs Lawyers called W applies for a job I will be able to make an informed decision as to whether I consider them suitable given their failure to declare their “offences”.

More newsletters with this kind of useful information please.

White Paper costs conference

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Another day, another costs conference.

Yesterday I was speaking at the White Paper, rather longwindedly titled: Costs, Funding, Litigation, Jackson: Shaping LASPO into a Highly Developed Litigation Business Model conference on the subject of costs budgeting.

This was another sell out event for White Paper. Hardly a surprise given the quality of their speakers (with one obvious exception yesterday) and given the fantastic pricing. The event is due to be repeated in March and I believe there are still some places left (see link).

One of the other speakers was cost judge Master Haworth. There has been much discussion as to how costs judges will apply the new proportionality test. As Master Haworth pointed out, this issue may not arise. Where a costs management order has been made, which will apply to most multi-track cases in theory (fast-track matters being subject to fixed fees where the issue of proportionality will therefore not arise), we will have an answer as to what costs are deemed to be proportionate. The judge making the costs management order is meant to apply the new proportionality test when setting the budget. It would be unusual for a costs judge to revisit the issue. Costs up to the budget will be deemed proportionate.

None of this provides any kind of an answer as to what level of costs it is proportionate to incur to recover, for example, £30,000. That will now be the dilemma for the judge making the costs management order.

Oh, and then the Court of Appeal.

Oh, and then the Supreme Court.

Oh, and then probably the ECHR for good measure. 

Provisional costs assessment

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The new rules for provisional assessment will apparently follow the provisional assessment pilot scheme which requires the receiving party to file with the court not much more than a copy of the bill of costs, a copy of the points of dispute, a copy of any replies served, a copy of all costs orders and copies of the fee notes.

The solicitors’ actual file of papers does not need to be filed.

Given provisional assessment will apply to bills up to £75,000 it may well cover claims for costs that include, for example, a conference with counsel and a medical expert together with two fee earners from the solicitors. How is a judge possibly meant to consider the reasonableness or, where appropriate, the proportionality of that step without sight of the instructions to counsel or the expert and without sight of the relevant attendance note?

Provisional assessment may well be intended to amount to rough justice but the new rules have abandoned even the merest pretence of offering any form of justice to either party. Implementation of the Jackson reforms is rapidly descending into an omnishambles.

Apparently the Senior Courts Costs Office has recognised the unworkable nature of these rules and will require in all cases before them, as they are entitled to order, that the solicitors’ full papers are to be lodged. The SCCO is to be heartily congratulated on this step, not least because they obviously recognise the extra drain this will undoubtedly place on their already stretched resources.

Best of luck if you find yourself outside London.

Costs budgeting

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HH Judge Simon Brown QC writing in the New Law Journal on the perils of getting costs budgeting wrong:

“There are now quite a few cases being reported of leading law firms making an expensive hash of electronic disclosure and paying for it. There must be many cases where unbudgeted or low budgeted disclosure costs have proved wildly inadequate when the case proceeded to detailed assessment. Who then pays the costs of it, particularly if the disclosure has been badly handled or been excessive or out of control as the result of poor co-operation between the parties? Answer, the errant laws firms.”

New court fee for provisional assessments?

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If all bills valued up to £75,000 are to be subject to provisional assessment there will presumably need to be new court fee introduced. The current fee payable for requesting a detailed assessment for a bill where the costs claimed are between £50,000 to £100,000 is £980. Hearings for bills of that size can easily last a full day or more.

Given provisional assessments take place on paper and with very limited (at least under the provisional assessment pilot) documentation before the court, the judicial time required to undertake a provisional assessment is a fraction of that for a full detailed assessment.

Presumably the new fees will be set at an appropriately modest level.

If not, here is something else to worry about. The wording of the draft CPR amendments that I have seen read:

“The court will not award more than £1,500 to any party in respect of the costs of the provisional assessment”.

The term “costs” is obviously wide enough to include both the court fee and VAT. It does not say refer to “recoverable fees” or make any mention of court fees being payable in addition.

If the court fee is not reduced in time for April 2013, and VAT is included in the figure, that leaves £433.33 profit costs for dealing with bill of costs up to £75,000.

You couldn’t make it up.

This is clearly a drafting oversight but has it/will it be amended in the published rules (apparently due in the second week in February)?