Posts by Simon Gibbs

What to include in a costs budget

By on Aug 14, 2019 | 6 comments

I have seen a number of Precedent H costs budgets which include, within the ADR/Settlement phase, the anticipated court fee for the Consent Order recording the settlement agreement. Is this correct? Costs budgets are predicated on the basis that the matter will proceed to a final trial. That is why there is a Trial phase. The total figure for the budget therefore reflects the anticipated costs that will be incurred if the matter does not settle and proceeds all the way to trial. Given that is clearly correct, surely the court fee for a Consent Order should not be included. On the other hand, the Guidance Notes on Precedent H include, under examples of the work to be included within the Settlement phase: “Drafting settlement agreement or Tomlin order” That would therefore suggest that any corresponding court fee should indeed be included. What happens then if a budget is approved/agreed that includes the court fee but the matter does not settle before trial? On detailed assessment, does the fact that one of the assumptions on which the budget was prepared (that the matter would settle within the ADR/Settlement phase) did not occur mean that there is a “good reason” to depart downwards from the budget? If so, to what extent? For example, a claimant’s budget is prepared estimating, for the ADR/Settlement phase, £2,000 profit costs and £100 consent order fee. The budget is approved as drafted. Negotiations are unsuccessful and so no settlement agreement or Tomlin order is drafted and no consent order is filed. The claim succeeds at trial. The claimant serves a bill claiming exactly £2,100 profit costs. The court’s approval of the budget will “relate only to the total figures for budgeted costs of each phase of the proceedings” and the approved figure would have been a global total of £2,100, which the receiving party has not exceeded. As per HHJ Dight CBE in Barts Health NHS Trust v Salmon [2019]: “it seems to me that the fact that the phase of the budget relating to experts was … substantially incomplete was capable of being a good reason, and it would have been open to the Master on that basis to consider whether to reduce the...

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Part 36 clauses in CFAs

By on Jun 26, 2019 | 1 comment

The Law Society Model Conditional Fee Agreement contains the following clause: “It may be that your opponent makes a formal offer to settle your claim which you reject on our advice, and your claim for damages goes ahead to trial where you recover damages that are less than that offer. If this happens, we will [not add our success fee to the basic charges] [not claim any costs] for the work done after we received notice of the offer or payment.” The section in bold gives an either/or option as to the relevant consequence if the offer is not beaten.  The vast majority of claimant solicitors’ CFAs that I have seen have a similar clause. This clause is contractual in nature and therefore, if the “not claim any costs” option is taken, also impacts on the indemnity principle. This would not be a problem, subject to what I say below, for claimant lawyers if the normal costs consequences of CPR 36.17 were automatic (ie the claimant cannot recover costs from the date on which the relevant period expired if an offer is not beaten).  But CPR 36.17 simply sets our the default position.  The consequences of failure to beat a defendant’s offer are not automatic as the court may order otherwise if “it considers it unjust” to apply the default position.  However, if this standard clause is used, the solicitors are unable to charge their client a success fee (at best, if the first option is chosen) or recover any costs from the client or the opponent (at worst, if the second option is chosen) from the date of receipt of the offer or payment, regardless of whether the court limits the period for which costs are recoverable. In any event, the wording of the clause itself is somewhat strange: It refers to “the work done after we received notice of the offer or payment”. CPR 36.17 anticipates that the trigger point will be “from the date on which the relevant period expired”.  The clause therefore also prevents recovery of either any costs or the success fee at least 21 days earlier than CPR 36.17 anticipates. It refers to “formal offer”, not “Part 36 offer”. It is therefore arguable...

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Future of the legal costs industry

By on Jun 24, 2019 | 1 comment

I’ve uploaded an old article from September 2009 that made predictions on the future of the legal costs industry in light of the Preliminary Report from Lord Justice Jackson.  How many of these predictions were accurate?  First published in the Solicitors...

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Why are legal costs so high?

By on May 30, 2019 | 1 comment

I’ve uploaded an old article from April 2011 that originally appeared Litigation Funding magazine.  This was written in response to research commissioned by the National Accident Helpline that formed part of their response to the original Jackson consultation process.  At the time, an article based on this report appeared in the Law Society Gazette, written by the National Accident Helpline.  The thrust of that article (and the research) was to try to justify the continued recoverability of success fees and ATE premiums on the basis that the true cause of high legal costs was delay/unreasonable behaviour by defendant insurers as opposed to recoverable additional liabilities.  In fact, what the research seemed to show was that success fees and ATE premiums were set at excessive levels in light of the very high success rate of claims.  In the event, the research made no difference and the Jackson proposals were...

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