Request received this week from costs drafting firm:

“We would be much obliged if you could provide to us your Points of Dispute on computer disk or by email pursuant to Costs Practice Direction 35.6, to enable us to prepare Replies”.

Never let it be said that costs draftsmen do not keep up to date with the latest developments in costs law.

Mr Justice Ramsey, speaking at the IBC Solicitors’ Costs Conference, suggested that under the new proportionality test parties should bear in mind that combined costs should not normally exceed the sum in dispute.

We have been waiting for some helpful guidance on the new test and now we have it. If we assume that the ratio between claimants’ costs and defendant’s costs is roughly 60/40 in favour of claimants, we now have a simple formula for calculating the maximum cap that should be allowed when setting budgets or undertaking assessment under the new test:

• Claimant’s costs capped at 60% of the realistic valuation of the claim when setting a budget or 60% of the damages recovered when assessing costs.

• Defendant’s costs capped at 40% of the realistic valuation of the claim when setting a budget or 40% of the damages recovered when assessing costs.

There are some arguments as to whether the defendant’s costs should be capped at the level of the pleaded case rather than the likely or actual damages, but you get the general idea.

The need for detailed assessment will disappear in a large number of lower value cases as it will be obvious the cap will bite.

The Senior Courts Costs Office (SCCO) is somewhat in a state of disruption, and will be for the next couple of months, with refurbishment works being undertaken to the Thomas More Building (TMB) at the RCJ. Apparently this is part of a planned refurbishment of the Royal Courts of Justice to accommodate the arrival of the Central London County Court (although rumour has it that asbestos was discovered in the building).

In any event, costs judges and costs officers on floors six to eight of the Thomas More Building have been moved around the building. The ACL has helpfully obtained a list showing the change in court rooms for the costs judges and costs officers for the period 10 March to 9 May when the refurbishment ends:

If you are attending the SCCO during this period, you should expect to appear in these court rooms rather than the ones set out on hearing notices previously sent to the parties.

Chief Master Hurst: From TMB 7.07 to court room 52 (1st floor, TMB)
Master O’Hare: From court 58 (7th floor) to court room 95 (5th floor)
Master Campbell: From court 59 (8th floor) to court room 56 (5th floor)
Master Simons: From court 57 (6th floor) to court room 93 (5th floor)
Master Gordon-Saker: From TMB 6.07 to court room 53 (2nd floor)
Master Haworth: From TMB 7.06 to court room 54 (3rd floor)
Master Leonard: From TMB 6.09 to court room 55 (4th floor)
Master Rowley: From TM 7.05 to court room 94 (5th floor)
Deputy Master’s room: From TM 6.11 to court room 91 (4th floor)

Costs Officers Lambert, Martin and Piggott will be on the 3rd and 4th floors:
Mr Lambert: From TM 6.05 to court room 89 (4th floor)
Mr Martin: From TM 8.06 to court room 88 (4th floor)
Mr Piggott: From TM 6.06 to court room 90 (4th floor)

The court staff will be on the 2nd floor; the Public Counter will be on the 3rd floor; and court rooms beginning with a 5 are in what is known as the ‘Stack’, in the corner of the TMB. Court rooms beginning with a 9 are in the main part of the building.

Allow yourself an extra 5 minutes to find the correct room.

The statement of truth used to verify a costs budget will change from 22 April 2014 to:

“This budget is a fair and accurate statement of incurred and estimated costs which it would be reasonable and proportionate for my client to incur in this litigation.”

This amendment was presumably made to deal with some of the problems in-house lawyers experienced signing the old statement:

“The costs stated to have been incurred do not exceed the costs which my client is liable to pay in respect of such work. The future costs stated in this budget are a proper estimate of the reasonable and proportionate costs which my client will incur in this litigation.”

For in-house lawyers no actual payment is usually made.

However, this still leaves the problem of the distinction between inter partes costs and solicitor/own client costs.

Costs budgets are only concerned with what it would be reasonable for the other side to the litigation to pay if a costs order is made in favour of the party preparing the budget. It has nothing to do with what it is reasonable for the client to pay his own solicitor. Solicitor/own client costs have no place in a costs budget but the statement of truth takes no account of this, hence the wording “which it would be reasonable and proportionate for my client to incur”.

There has been some heated debate about whether solicitor/own client costs should be included or excluded in the budget. There are no doubt be grey areas, but what about, for example, costs relating to setting up funding? It may not be recoverable between the parties but should it be in the budget if it is a cost that will be incurred. (We’ll ignore for the moment those costs draftsman who continue to include such work in bills.)