17 May, 2012 at 6:03 am

Retrospective proportionality test?

Filed Under Legal Costs | 2 Comments 

A new proportionality test is shortly to be announced, which will come into force in April 2013. Will it be retrospective? Or rather, will the rules committee remember to draft transitional provisions to deal with this?

15 May, 2012 at 6:14 am

A modest proposal

Filed Under Legal Costs | 6 Comments 

I have a modest proposal.

When serving fee notes and invoices for disbursements in support of a bill of costs, order these in the same order as they appear in the bill. Secondly, given all items in a bill should be numbered, write the number of the item on the top corner of the invoice or by the corresponding entry in the fee note (if counsel’s fee note includes various items).

This is a simple matter of courtesy to your opponent and will avoid the costs judge going ballistic at you when he loses patience trying to locate the correct invoice/fee note in a disordered bundle.

14 May, 2012 at 5:40 am

Association of Costs Lawyers Annual Costs Conference

Filed Under Legal Costs | 8 Comments 

Another absolutely cracking Association of Costs Lawyers Annual Costs Conference last week.

Speakers included (and this is a non-exhaustive list): His Honour Simon Brown QC, Jeremy Morgan QC, Andrew Post QC, Simon Browne QC, Nicholas Bacon QC and Professor Dominic Regan.

Those on the panel session on Saturday: Master Campbell, Master Gordon-Saker, Master Haworth, Regional Costs Judge Besford, Region Costs Judge Lethem and District Judge McIlwaine.

And to top it all, the keynote speaker was Lord Neuberger, Master of the Rolls. His speech was important enough to be reported in both The Telegraph and the Law Society Gazette (and for the Association of Costs Lawyers to get a mention in both). Nice though all this was, the most important development for the ACL was the clear view expressed by Lord Neuberger, in response to a question from the floor, that he could see no reason why a representative from the ACL should not sit as a member of the new Costs Council.

A copy of the speech can be viewed here (well worth reading): Lord Neuberger of Abbotsbury, Master of the Rolls speech: Association of Costs Lawyers’ Annual Conference 2012.

9 May, 2012 at 5:12 am

Teddy bears’ picnic

Filed Under Legal Costs | 4 Comments 

Excellent, and scathing, article from Dominic Regan in the New Law Journal on the botching of the implementation of the Jackson Reforms.

In addition to criticism of the fact that fixed costs for the fast-track will not happen next year (although see yesterday's post), he expresses concerns as to the new proportionality test.

Although it appears that a new proportionality test in line with Lord Justice Jackson's proposals will be introduced, the rules committee will not be providing a Practice Direction giving guidance as to how the new test will be applied. As Regan notes:

"Absent guidelines, there will be a free for all and satellite litigation will roar away. Remember that the test will apply to every case... Well, now we will have utter uncertainty in potentially any and every dispute. This will make the costs wars look like the teddy bears' picnic."

8 May, 2012 at 5:59 am

Small claims limit to be raised?

Filed Under Legal Costs | 2 Comments 

We are finally starting to see a bit of stability and certainty returning to the personal injury and legal costs world.

Obviously, I am joking.

Those responsible for running the RTA portal recently told the Ministry of Justice that it would take 11 months to amend the portal to encompass RTA claims worth up to £25,000 and a further two years and seven months to build and test a new system for EL and PL claims. Some breathing space then? Don’t count on it.

The government is apparently determined to introduce the expanded RTA claims portal in April 2013, as previously planned.

If that looks like a seismic shift, Legal Futures is reporting that the government is planning to revisit the possibility of raising the small claims track limit for personal injury claims from £1,000 to £5,000 and plans to consult over this issue in the summer. That really would have a profound impact on the PI industry.

4 May, 2012 at 5:48 am

Jackson’s Preliminary Report – really that long ago?

Filed Under Legal Costs | Leave a Comment 

Article from June 2009 Solicitors Journal discussing Lord Justice Jackson’s Preliminary Report (what care free and happy times), whether a case that proceeds to summary assessment is to be treated as having settled at “trial” for the purposes of the fixed success fee regime and the issue of disclosure of CFAs (an issue that never seems to go away) now available via Costs Law Articles Archive.

30 April, 2012 at 6:07 am

Pre-proceedings costs

Filed Under Legal Costs | 2 Comments 

The case of Citation plc v Ellis Whittam Ltd [2012] EWHC 764 (QB) raises an interesting issue as to pre-proceedings costs. Summarising the law, Tugendhat J held:

“In summary I take the law to be: (1) if no claim form is issued, then there is no litigation and so there are no costs of litigation, whatever costs may have been incurred in complying with a Pre-Action Protocol; but (2) if a claim form is issued, the costs incurred in complying with a Pre-Action Protocol may be recoverable as costs 'incidental to' any subsequent proceedings.”

So far, so uncontroversial.

Slightly more questionable is the view that:

“The CPR provides a strong incentive to parties to engage in pre-action communications, with the risk to those who do not do this that they may not recover their costs, even if they bring an action in which they are the successful party.”

(A successful claimant who has failed to comply with a Pre-Action Protocol may have some of their costs disallowed but I cannot immediately recall a case where their costs were disallowed in their entirety for this reason alone.)

In concluding that the Claimant should not have issued proceeding (the claim being struck out as an abuse of process), Tugendhat J ordered the Claimant to pay the Defendant’s costs from the date of service of the claim form. However:

“As to the costs up to the service of the claim form, I make no order. If the Claimant had not commenced the proceedings (and I have held that it ought not to have commenced the proceedings) then the Defendant could not have sought an order for its costs for that period to be paid by the Claimant. The fact that the Claimant did commence proceedings in this case ought not to lead to the result that it becomes liable to pay to the Defendant costs which it would not have been liable to pay if it had not commenced proceedings.”

This part of the judgment is more problematic. It is not unusual for both parties to incur legal costs pre-proceedings in their attempts to settle the matter without proceedings. It is well established that a successful claimant will be able to recover their pre-proceedings costs as being costs ‘incidental to’ the subsequent proceedings. Why should successful defendants not be in the same position?

27 April, 2012 at 5:13 am

Temporary exemption for mesothelioma claims

Filed Under Legal Costs | 1 Comment 

In a surprise development the government is to exempt mesothelioma claims from the ending of recoverability of success fees and ATE premiums in April 2013. However, this is potentially only a temporary reprieve with Justice Minister Jonathan Djanogly announcing:

“On careful reflection about the special position of mesothelioma sufferers, I can now give the House the assurance that we will not commence the relevant provisions in clause 43, on success fees, and clause 45, on after-the-event insurance, in respect of mesothelioma claims in April next year. Rather, we will implement the clauses in respect of those claims at a later date, once we are satisfied on the way forward for those who are unable to trace their employer’s insurer. The amendment commits the Lord Chancellor to carrying out a review of the likely effect of the clauses in relation to mesothelioma proceedings and to publish a report before those clauses are implemented.”

25 April, 2012 at 5:37 am

Detailed assessments after costs budgeting?

Filed Under detailed assessment | 4 Comments 

This year’s White Paper Conference Company costs conference on Costs, Funding, CFAs and Jackson was such a success it was repeated twice and sold out on both occasions almost immediately. (That’s what you get when you promote a costs event via the Legal Costs Blog.)

One of the speakers, Michael Kain from costs firm Kain Knight, talking about costs budgeting, warned the delegates to “Be afraid…Be very afraid”. This warning was in large part no doubt aimed at the costs professionals attending as he predicted that costs budgeting would largely mean an end to detailed assessments. Specialist costs counsel Jeremy Morgan QC has made similar predictions where costs management is applied, suggesting it is “hard to see any room for arguments on proportionality, hourly rates or the reasonableness of the work done”. With an end to recovery of additional liabilities around the corner, that doesn’t leave much left.

HH Judge Simon Brown QC, the judge responsible for one of the current costs budgeting pilots, writing in the New Law Journal, stated:

“if the budget of the receiving party is approved, then its costs are likely to be paid in full without delay or further later assessment at the end of the case.”

Although those involved in running the costs management/budgeting pilots have been keen to emphasise that it is not meant to be the equivalent of costs capping or performing a pre-emptive detailed assessment, it is difficult to see much scope for detailed assessment where the costs come in on budget. Where the budget is exceeded, the rules as currently drafted provide that any judge assessing costs will not depart from such approved budget unless satisfied that there is good reason to do so. And, as HH Judge Simon Brown QC notes, where detailed assessment is required because of inaccurate estimating: “the expense of that process [is] likely to be upon the defaulting receiving party”.

Perhaps most chillingly, he concluded:

“The days of putting in a bill at the end of a case based on a multiple of billable hours x £x per hour and expecting to be paid are over.”

Whichever way the issue is viewed, the importance of accurately setting budgets cannot be overstated.

23 April, 2012 at 5:54 am

Still nothing better to do?

Filed Under costs draftsmen | 8 Comments 

I mentioned the other day receiving an email from the other side's costs draftsman on 30th March 2012 reading:

“Please can you provide an update on the current position of our clients cost cheque in relation to this matter? Costs were agreed on 23rd March in the amount of £7,000.00 on 14 day payment terms”.

I suggested the other side did not appear to have anything better to do other than sending premature chase-ups.

Much heated commentary on this post followed as to whether the chase-up was a reasonable step or not, with one wag noting that “the ‘issue’ has certainly prompted a lengthier debate than entity regulation of the costs profession did”.

I have a further postscript to add. On 4th April 2012 I received the following email on the same case:

“Please can you urgently provide the current position on our clients costs cheque.

Costs were agreed on 23rd March in the sum of £7,000.00.

Please note receipt of payment is strictly 14 days from when costs were agreed, on day 15 we would be in the position to issue enforcement proceedings to recover the agreed amount.”

Given there was no costs order, they presumably meant they would be in a position to issue proceedings for breach of contract on day 15.

At this stage I went away to review the papers:

8th March 2012 – Defendant makes offer of £7,000

23rd March 2012 – Claimant says they “confirm costs are now agreed in the sum of £7,000. Settlement in the agreed sum is strictly subject to receipt of the payment in satisfaction within 14 days from the sate of this letter”.

I will confess that I rather lost interest in contract law after week one of my law degree and therefore never really mastered much beyond offer, acceptance, rejection and counter-offer. However, my limited understanding of such matters is that if you purport to accept an offer but then seek to impose a fresh condition upon acceptance, such as:

• Payment is made within a certain timescale, or
• Payment is made in used £10 notes left in a paper bag under a park bench, or
• Payment is hand delivered by Pippa Middleton who will then proceed to smear the fee earner in chocolate sauce before licking it all off,

then you have not actually accepted the offer put forward. You have instead made a counter-offer, and thereby rejected the original offer. In this case, the Claimant’s counter-offer of £7,000 subject to payment being made within 14 days was not accepted. Therefore there was no agreement and no breach of any agreement such as to give rise to the right to “issue enforcement proceedings”.

No doubt an offer to settle costs comes with an implied term that payment will be within a reasonable period and failure to pay within a reasonable period would give rise a claim for breach of contact. Whether failure to pay within 14 days can be taken as amounting to a breach of such an implied term is a moot point however given the facts of this case.

The Defendant’s original offer of £7,000 was made “strictly subject to disclosure of an enforceable CFA covering the claims against the [Defendants]”. To date, there has been no such disclosure.

You couldn’t make it up.

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