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Posts made in April, 2011

After-the-event (ATE) premium

By on Apr 28, 2011 | 7 comments

A further definition from The (Alternative) Legal Costs Dictionary: After-the-event (ATE) premium n. a sum of money paid or payable for insurance against the risk of incurring a costs liability in proceedings. The premium is rarely paid at the outset and usually not paid at all if the claim is unsuccessful. The amount of the premium payable is often arbitrarily concocted as the case progresses and subsequently adjusted to whatever figure the court arbitrarily allows. An amount which market forces have never knowingly...

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Relief from sanctions

By on Apr 27, 2011 | 11 comments

Lord Justice Jackson has decided that the recovery of success fees from defendants is wrong. The senior judiciary has agreed (see for example paragraph 39 of Sousa v London Borough of Waltham Forest [2011] EWCA Civ 194). The European Court of Human Rights has agreed (see MGN Limited v United Kingdom (Application No. 39401/04)). The government has adopted this view as official policy. How likely is that an application for relief from sanctions, in relation to a failure to give proper notification of funding, will succeed in the current...

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Happy Easter

By on Apr 24, 2011 | 0 comments

Happy Easter from the Legal Costs Blog. [youtube]N5apZmwR9UI[/youtube] You may need to adjust your security settings if you receive this via email or view online.

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April year end?

By on Apr 20, 2011 | 0 comments

No doubt some deals still to be done with those firms whose financial year end is the end of April: billing chaos. Perhaps firms should publish their year end dates and then everyone’s a winner šŸ˜‰

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Costs Practice Direction – VAT amendments

By on Apr 18, 2011 | 5 comments

Amendments have been made to Costs Practice Direction, which came into force on 6 April 2011, which are made to clarify how VAT should be treated in relation to payments to a third party that are shown as disbursements by the legal representatives in bills of costs: ā€œDisbursements not classified as such for VAT purposes 5.11 (1) Legal representatives often make payments to third parties for the supply of goods or services where no VAT was chargeable on the supply by the third party: for example, the cost of meals taken and travel costs. The question whether legal representatives should include VAT in respect of these payments when invoicing their clients or in claims for costs between litigants should be decided in accordance with this Direction and with the criteria set out in the VAT Guide (Notice 700) published by HM Revenue and Customs. (2) Payments to third parties which are normally treated as part of the legal representativeā€™s overheads (for example, postage costs and telephone costs) will not be treated as disbursements. The third party supply should be included as part of the costs of the legal representativesā€™ legal services and VAT must be added to the total bill charged to the client. (3) Disputes may arise in respect of payments made to a third party which the legal representative shows as disbursements in the invoice delivered to the receiving party. Some payments, although correctly described as disbursements for some purposes, are not classified as disbursements for VAT purposes. Items not classified as disbursements for VAT purposes must be shown as part of the services provided by the legal representative and, therefore, VAT must be added in respect of them whether or not VAT was chargeable on the supply by the third party. (4) Guidance as to the circumstances in which disbursements may or may not be classified as disbursements for VAT purposes is given in the VAT Guide (Notice 700, paragraph 25.1). One of the key issues is whether the third party supply (i) was made to the legal representative (and therefore subsumed in the onward supply of legal services), or (ii) was made direct to the receiving party (the third party having no right to demand...

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