The defendant costs specialists

Posts made in August, 2017

Cleaning up costs draftsmen’s mistakes

By on Aug 29, 2017 | 0 comments

At some stage, most experienced lawyers are instructed to try to sort out the mess that another lawyer has created.  Over the past couple of months I have twice been instructed to clear up problems created by defective retainers. On both occasions, the source of the problem was firms of solicitors who have traditionally undertaken defendant insurer work but had looked to move into dealing with some claimant matters.  They had wished to undertake this work on a CFA or CCFA basis but lacked previous experience of running cases with these funding models. In the first case, they had attempted to draft the relevant retainer documents themselves (and inadvertently created an unlawful hybrid DBA).  Such are the dangers of dabbling in something one is not an expert in. In the second case, a CCFA had been set up between a firm of solicitors and a claims management company (CMC).  The solicitors had sensibly, you might think, instructed a costs draftsman to undertake this work.  The firm instructed appears to have been a very well known costs firm.  I say this because the name of the firm appears twice in the body of the CCFA notwithstanding the fact that they are not a party to the agreement and where there is nothing in the agreement to suggest they will undertake any work in connection with the handling of the claims. The agreement itself is so badly drafted that is it difficult to determine how the various clauses operate in practice or, indeed, how certain aspects of the agreement were even intended to operate. Time does not allow me to list all the shortcomings with the agreement, but these key ones that stand out, and it is a remarkable drafting achievement for so much to have gone wrong in a relatively short document: Combined with the individual CFA each claimant was expected to enter into, the agreement was an unlawful hybrid DBA. The overall success fee payable to the solicitors would exceed the 25% cap on general damages and damages for pecuniary loss, other than future pecuniary loss. The CCFA creates an unlawful referral fee arrangement between the solicitors and the CMC. There is a breach of the indemnity principle. The...

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Dividing Bills of Costs where multiple defendants

By on Aug 23, 2017 | 1 comment

I have a case where a claim was brought against two Defendants.  The claim succeeded against both Defendants. The matter was subject to a Costs Management Order with the Claimant having a single approved costs budget in respect of costs concerning both Defendants (with no apportionment between work concerning one Defendant or the other). The final costs order was simply that: “The Defendants shall pay the Claimant’s costs of the action” (ie the Defendants are jointly and severally liable for the Claimant’s costs, with no apportionment between work concerning one Defendant or the other). What therefore possessed the Claimant’s costs draftsman to prepare the Bill of Costs such that for each relevant phase the Bill is split into three separate parts: one for “generic costs” that related to the work concerning both Defendants and two further parts that include the work specific to each Defendant? The Bill therefore consists of 41 different parts when it only required 15.  The task of comparing the costs claimed to the approved budget has been made more time consuming than necessary, as has preparation of the Points of Dispute and any subsequent detailed assessment hearing. True it is that PD 47 para.5.8(5) requires: “Where the bill covers costs payable under an order or orders under which there are different paying parties the bill must be divided into parts so as to deal separately with the costs payable by each paying party.” However, that is clearly not applicable where, as here, the costs that each of the Defendants are required to pay are...

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Good reason to depart from costs budget

By on Aug 18, 2017 | 6 comments

n Harrison v University Hospitals Coventry & Warwickshire NHS Trust [2017] EWCA Civ 792 the Court of Appeal confirmed that a court, on detailed assessment, would not depart upwards or downwards from the last agreed or approved budget unless there was a good reason to do so.  The battle has now moved on to the issue of what constitutes a “good reason”. An interesting decision on this issue comes in the case of RNB v London Borough of Newham [2017] EWHC B15 (Costs). Deputy Master Campbell decided that there was a “good reason” where the hourly rates claimed in the agreed/approved budget were in excess of the reasonable hourly rates as determined as part of the detailed assessment process. This decision is contrary to my understanding as to the judicial training for costs budgeting.  The rules expressly state (at PD3E para.7.3): “The court’s approval will relate only to the total figures for budgeted costs of each phase of the proceedings, although in the course of its review the court may have regard to the constituent elements of each total figure.” and (at PD3E para.7.10): “The making of a costs management order under rule 3.15 concerns the totals allowed for each phase of the budget. It is not the role of the court in the cost management hearing to fix or approve the hourly rates claimed in the budget. The underlying detail in the budget for each phase used by the party to calculate the totals claimed is provided for reference purposes only to assist the court in fixing a budget.” It was generally understood that the purpose of these provisions was to set a globally reasonable and proportionate figure for each phase of a case.  It was not to dictate how the work for that phase would then be undertaken. For example, a budget might include 10 hours at £300 per hour by a Grade A fee earner for the witness statement phase, equating to a total of £3,000.  If that figure is agreed/approved for the phase, it is then entirely a matter for that party as to whether the work is actually done by a Grade A fee earner in 10 hours, or by a Grade D fee earner charging £150 per...

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Impact of Jackson on Costs Lawyers

By on Aug 10, 2017 | 1 comment

The response to the Jackson reforms has taken the classic five stages of grief: denial, anger, bargaining, depression and acceptance (although not everyone has worked through all the stages yet). When the original reforms were first published, back in 2010, many confidently predicted that the reforms would never come to pass (denial stage) and the report would quietly gather dust, particularly as this coincided with the new coalition government with many anticipating they would have more pressing matters to worry about than civil costs reforms. The “new” proposals for fixed costs across the fast-track are, of course, no more than what had been proposed originally.  The further proposals for fixed fees for most claims with a value of up to £100,000 are more significant and far reaching than originally proposed.  It is certainly true that Jackson’s original report suggested the possibility of extending fixed fees further if his initial reforms were successful, but I suspect most observers anticipated that his original package of reforms would, if implemented, take sufficient heat out of the system such that further reform would be unnecessary.  We therefore now find ourselves in a much “worse” position than expected from the initial Jackson Report. The Association of Costs Lawyers seems to have been particularly susceptible to the denial stage of the grief process. There do appear to have been some members who genuinely believed that the Jackson reforms presented all kinds of exciting opportunities for Costs Lawyers, including costs budgeting and (apparently) the project management of litigation.  In reality, it was difficult to see that any new work generated could realistically compensate for the large volume of lower value work that would disappear.  It is only from the perspective of positive denial that some of the ACL’s past decisions make any real sense. There was, at one stage, quite a lot of discussion about the ACL going to university milk rounds to promote becoming a Costs Lawyer as a wonderful future career.  Post-Jackson this was difficult to justify on any level.  In so far as the ACL’s primary role is to promote the interests of its members, it was not obviously consistent with that role to encourage a new group of, potentially, better qualified new...

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Jackson fixed fee extension proposals

By on Aug 1, 2017 | 3 comments

Ancient Chinese curse: “May you live in interesting times”. And so, Lord Justice Jackson has published his recommendations for extending fixed fees.  The key proposals for extending fixed recoverable costs (“FRC”) to all fast-track cases, and a significant increase in fixed fees for the majority of claims with a value of up to £100,000, are no great surprise. In more detail, he proposes: All recoverable costs in the fast track should be fixed, the figures should be reviewed every three years. A new ‘intermediate’ track with a streamlined procedure should be created for monetary relief cases above the fast track, which are of modest complexity and up to a value of £100,000. There should be a grid of FRC for intermediate track cases, the figures should be reviewed every three years. There should be FRC for (a) applications to approve settlements for children and protected parties and (b) costs only proceedings, in respect of intermediate track cases. Save as set out in recommendation (iv), Part 8 claims should be excluded from the proposed FRC regime. The Civil Justice Council should, in conjunction with the Department of Health, set up a working party to develop a bespoke process for clinical negligence claims up to £25,000, together with a grid of FRC for such cases. There should be a voluntary pilot of capped recoverable costs, in conjunction with streamlined procedures, for business and property cases with a value up to £250,000. If the pilot is successful, such a regime should be made available at the judge’s discretion for any suitable case in the Business and Property Courts or the Business and Property Lists of the County Court. For FRC cases, where a defendant fails to beat a claimant’s Part 36 offer, instead of indemnity costs applying in place of FRC, the claimant should be awarded a 30% or 40% uplift on costs. (This is what I suggested, although with a different level of uplift, 18 months ago.) A mediated agreement has been reached as to a new claims process for NIHL claims, with corresponding FRC, and this is endorsed. The Aarhus Rules should be adapted and extended to all judicial review claims. Costs management should be introduced, at the discretion of...

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