The defendant costs specialists

Posts made in February, 2013

Flaws with new guidance for Precedent H

By on Feb 28, 2013 | 1 comment

News: Latest news on new RTA portal fees and timing of extension of portal for employers’ and public liability cases over on Litigation Futures. I’m getting Jackson indigestion. Comment: Excellent analysis from Costs Lawyer Matthew Harman on flaws with new guidance for Precedent H. Also, why does Precedent H clearly state: “This estimate excludes VAT (if applicable), court fees, success fees and ATE insurance premiums (if applicable), costs of detailed assessment, costs of any appeals, costs of enforcing any judgment and [complete as appropriate]” but then have on the next four pages a row for “Court...

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New Costs Practice Direction

By on Feb 27, 2013 | 21 comments

The new Costs Practice Direction has finally been released. Now we have both the new CPR rules and the new CPD I will start to analyse these in detail. Obviously, it’s perfectly possible that between now and 1 April 2013 half the rules will have been rewritten, but we might as well start somewhere. First up, and in no particular order, is the provision governing the recoverable costs for the new provisional assessment process that will deal with bills where the costs claimed are £75,000 or less. By CPR 47.15(1): “This rule applies to any detailed assessment proceedings commenced in the High Court or a county court on or after 1 April 2013 in which the costs claimed are the amount set out in paragraph 14.1 of the practice direction supplementing this Part, or less.” By virtue of CPR 47.6(1) (as before): “Detailed assessment proceedings are commenced by the receiving party serving on the paying party— (a) notice of commencement in the relevant practice form; and (b) a copy of the bill of costs.” The claims to which this will apply are therefore clear. CPR 47.15(5) states: “The court will not award more than £1,500 to any party in respect of the costs of the provisional assessment.” “Costs” retains its current definition (but now under CPR 44.1): “’costs’ includes fees, charges, disbursements, expenses, remuneration, reimbursement allowed to a litigant in person under rule 46.5 and any fee or reward charged by a lay representative for acting on behalf of a party in proceedings allocated to the small claims track” This is clearly broad enough to include (as it has always been treated as doing) both court fees and VAT. Secondly, and I suspect this is an oversight on the part of those making the rules, this includes any success fee (the term is “costs” not “base costs”). It will therefore apply to claims being conducted with recoverable success fees where the detailed assessment proceedings are commenced on or after 1 April 2013. A paying party who is VAT registered will therefore be able to recover the full £1,500 as profit costs. A receiving party not registered for VAT will get £1,500 less the court fee, less VAT and to...

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Qualified One Way Costs Shifting

By on Feb 26, 2013 | 0 comments

Kerry Underwood has produced another masterly costs update analysing Qualified One Way Costs Shifting. This highlights another of the bizarre aspects of the implementation of the Jackson Reforms and one that seems to have attracted very little attention. At the risk of oversimplification, in personal injury claims successful claimants will be able to recover costs from defendants in the ordinary way. However, successful defendants will only be able to recover costs, except in some limited situations (such as dishonest claims), up the level of any damages awarded to the claimant. Therefore, where the claimant fails on liability there will be no pot of money from which to recover costs. If a defendant wins on a Part 36 offer and the claimant’s damages are assessed at £2,000, that is the maximum that can be recovered in costs by the defendant. The new rules come into force on 1 April 2013 at which stage: “orders for costs made against a claimant may be enforced without the permission of the court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for damages and interest made in favour of the claimant. Orders for costs made against a claimant may only be enforced after the proceedings have been concluded and the costs have been assessed or agreed.” Again, the transitional provisions are crucial: “This Section does not apply to proceedings where the claimant has entered into a pre-commencement funding arrangement (as defined in rule 48.2).” In simple terms a “pre-commencement funding arrangement”, with some exceptions, is a CFA, CCFA, ATE or ATE equivalent entered into/obtained before 1 April 2013. As Kerry points out, this means that Qualified One Way Costs Shifting is retrospective in all cases where there is no such funding arrangement in place. My reading is that this will be retrospective even where there is an existing costs order in the defendant’s favour. Claimants do not need to wait until 1 April 2013 before discontinuing. Unless it is possible to enforce the costs order before 1 April 2013 (ie in itself requiring costs to have been agreed/assessed by then) the order becomes, in a...

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The beginning of the end?

By on Feb 25, 2013 | 7 comments

Lord Neuberger’s speech at the Association of Costs Lawyers’ Annual Conference 2012 finished with the warning: “the Jackson reforms represent the boldest attempt to cure our costs problem yet attempted. Should they fail to reduce costs, it seems to me that we will face a stark choice: the rejection of the English costs rule and the adoption of either a US-style costs rule or a German-style fixed costs regime.” Is the spectacularly botched implementation of the Jackson reforms a cunning way to guarantee this...

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Proportionality v Costs Budgeting

By on Feb 22, 2013 | 3 comments

Costs budgeting is the new hot topic in costs law (although possibly gone rather off the boil with news that a growing number of claims will be exempt from automatic costs management) and so I share on the Costs Law Articles Archive section of Legal Costs Central my article discussing the logic of both proportionality and costs budgeting/detailed assessment, previously published in Solicitors...

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