7 July, 2014 at 6:27 am
Recent editions of Costs Law Reports have been so full of cases concerning applications for relief from sanctions they could have been renamed the Relief from Sanctions Law Reports. Sadly, all those trees have been cut down in vain. The Court of Appeal, giving their eagerly awaited post-Mitchell decision on the correct test to apply said:
“We hope that what follows will avoid the need in future to resort to the earlier authorities.”
The press has recently reported a decision of the first-tier tax tribunal as to whether Snowballs are cakes or confectionery, and therefore zero rated for VAT. As to whether the Court of Appeal’s new guidance is a cake or a confection, the answer is that it is a fudge. They were not prepared to state the Mitchell test was wrong but neither were they willing to confirm it was correct. Apparently, the fault lies with other judges being silly enough to believe that the Mitchell test meant what it said.
We now have a different test. The Court of Appeal optimistically hopes the new test will reduce the amount of satellite litigation generated by Mitchell. It appears the Court has forgotten what was said in Mitchell:
“We share the judge's desire to discourage satellite litigation, but that is not a good reason for adopting a more relaxed approach to the enforcement of compliance with rules, practice directions and orders. In our view, once it is well understood that the courts will adopt a firm line on enforcement, litigation will be conducted in a more disciplined way and there should be fewer applications under CPR 3.9. In other words, once the new culture becomes accepted, there should be less satellite litigation, not more.”
It now appears the courts are meant to take a less firm line. Quite how this will lead to less satellite litigation remains a mystery, particularly given the new test creates far more uncertainty as to which way a court may go on an application for relief.
Costs Law Reports will no doubt be full over the next year or two with new decisions attempting to interpret the new test.
4 July, 2014 at 6:27 am
Are you a true legal costs geek, just take a passing interest in the subject or fall firmly into the costs monkey category?
Take our quick test to find out:
Question 1 - Do you prefer to read:
A. Costs Law Reports
B. The cost law case summaries on Litigation Futures
C. OK! magazine
Question 2 - Do you think the indemnity principle is:
A. More important than life itself
B. Probably an outdated legal concept that has outlived its usefulness
Question 3 - Do you dream of:
A. Becoming a costs judge
B. Retiring to the country and spending your spare time fishing
C. Moving to California and becoming a porn star
Question 4 - The impact of Jackson will be:
A. A surge of inevitable satellite litigation around costs. Happy days are here again.
B. Will bring some much needed proportionality back into civil costs but has some worrying implications for access to justice in some areas.
C. Bad, although there’s no denying Billie Jean is a dancefloor classic.
Question 5 - What is the best way to spend a Saturday morning:
A. Attending the panel session of the Association of Costs Lawyer’s Annual Conference.
B. Browsing around flea markets looking for a bargain.
C. Still drunk from the night before.
Question 6 - What do you think of the Costs Wars:
A. They were a necessary evil to provide the required case law on the interpretation of the Access to Justice Act 1999
B. They were an unwelcome distraction in the litigation process generating unnecessary satellite litigation
C. Did George Lucas direct that one?
Question 7 - At night do you like to:
A. Curl up in an armchair with a copy of Friston’s Civil Costs – Law and Practice
B. Curl up on the sofa and watch a scary movie
C. Curl up in bed with a hooker
How did you answer?
Mainly As – Congratulations. You are a true costs geek. Admittedly, you probably have no friends or social life, but never let it be said that anyone knows more than you about the indemnity principle.
Mainly Bs – You would probably pass in public for a relatively well adjusted and normal individual. But you read the Legal Costs Blog. You’re a bit weird really.
Mainly Cs – Oh dear. You are one of life’s costs muppets.
26 June, 2014 at 6:17 am
6 June, 2014 at 5:47 am
Has anyone had any initial decisions on the new proportionality test, either as part of a provisional/detailed assessment or as part of a costs management decision?
29 May, 2014 at 6:21 am
Susan Dunn of Harbour Funding writing in Costs Lawyer magazine:
“We have had varied experiences with Costs Lawyers, who are a great help on detailed assessments and bill challenges at the end of cases. However, the profession has more to do in perfecting its approach to estimating how much a case is going to cost.”
I thought we were all meant to be brilliant at costs budgeting.
28 May, 2014 at 6:25 am
I’ve just received Replies that seek to justify the time spent by the fee earner who prepared the Bill of Costs on the basis that they are a “Fellow of the Association of Costs Lawyers”. Since when did we start having those?
27 May, 2014 at 5:32 am
The Association of Costs Lawyers’ submissions to the Civil Justice Council on the impact of the Jackson reforms included:
“One court is dealing with case management on one day and then costs budgeting on a second day. This seems to be appreciated as it enables budgets to be adjusted to meet the case management decisions.”
It may be appreciated but it completely undermines the costs budgeting process. Case management and costs management are meant to go hand-in-hand. If the budgets appear disproportionate, the court adapts the case management decisions to reduce the work required and reduces the parties’ budgets accordingly. It should be clear from a properly drafted budget what impact reducing, for example, the number of expert witnesses will have. Or, at the very least, this information should be available at the case management/costs management hearing so the judge can make informed decisions. How can a judge make proportionate case management decisions if he does not know what size budgets these will produce?
Judges who are ordering split hearings are flying in the face of the judicial training on this.
20 May, 2014 at 6:13 am
Lord Justice Jackson handed down yesterday an important decision on applications to extend time for serving points of dispute in Hallam Estates Ltd & Anor v Baker  EWCA Civ 661. Master Gordon-Saker’s earlier sensible decision was reinstated.
The judgment contains a helpful “executive summary” (more of these please in judgments):
“In detailed assessment proceedings the paying parties applied for a reasonable extension of time in which to serve their points of dispute. That extension of time would not imperil any hearing dates or otherwise disrupt the proceedings. The costs judge granted that extension of time and subsequently rejected an application to set it aside.
The receiving party appealed to the High Court against the latter decision. The judge allowed the appeal on the grounds that (i) there had been non-disclosure and (ii) the costs judge had impermissibly granted relief from sanctions. The allegations of non-disclosure are now withdrawn. Furthermore, the costs judge was not dealing with relief from sanctions. He was making a case management decision about extension of time. The judge ought not to have interfered with the costs judge's exercise of discretion.”
The decision does highlight one current problem area that parties apparently cannot agree such extensions without the court’s approval being sought:
“Pursuant to rule 3.8 (3) the court's approval would have been required for any such agreement, but that would have been a formality. By way of digression I comment that rule 3.8 will shortly be amended so that in the ordinary way parties can, without reference to the court, agree extensions of time up to 28 days, provided that this does not put at risk any hearing date.”
Crucially, for applications for extensions made before expiry of the deadline:
“An application for an extension of the time allowed to take any particular step in litigation is not an application for relief from sanctions, provided that the applicant files his application notice before expiry of the permitted time period. This is the case even if the court deals with that application after the expiry of the relevant period. … It therefore follows that on 16th May 2013 the costs judge was dealing with an in-time application. This was a straightforward application to extend time under rule 3.1(2)(a). The principles concerning relief from sanctions which the Court of Appeal enunciated in Mitchell v News Group Newspapers Ltd  EWCA Civ 1537;  1 WLR 795 are not applicable.”
A word of warning in respect of parties unreasonably refusing to agree to extensions of time:
“Nevertheless it was no part of my recommendations that parties should refrain from agreeing reasonable extensions of time, which neither imperil hearing dates nor otherwise disrupt the proceedings. The contrary is the case…”
16 May, 2014 at 5:41 am
District Judge Marshall Phillips commenting at the Association of Costs Lawyers’ Annual Conference on the £1,500 cap for provisional assessment, stated that he would normally allow less for a £15,000 bill than a £70,000 bill.
This is sensible as the £1,500 is a maximum, not a minimum or fixed, amount.
14 May, 2014 at 5:44 am
Views from the panel discussion at the Association of Costs Lawyers’ Annual Conference:
Master Campbell – late service of Replies, if they are helpful to the Court, may be allowed in.
Master Gordon-Saker – Replies are “rarely helpful”.
Regional Costs Judge Besford – Replies served late in provisional assessment cases might not be considered by the Court.
Master Hurst – Replies served late could be in difficulties without an application for permission.