The former chief whip Mr Mitchell is suing the Sun newspaper for reporting that he called police officers “plebs”. It has now been announced that Toby Rowland, the police officer at the centre of the row, is in turn to sue Mr Mitchell for libel, presumably on the basis that Mr Mitchell wrongly said the police officer lied as to whether he had used the word “pleb”.
Note to solicitors acting for Mr Rowland: try to remember to file your costs budget at least 7 days before the first CMC.
The Jackson reforms have led to a significant increase in fixed fees in personal injury litigation. The judiciary has already made threatening noises that if the Jackson reforms do not work it may be necessary to scrap the current hourly rates system entirely.
But, who would have thought that the threat would come from within? QualitySolicitors have announced their network is to abandon hourly rates in favour of fixed fees for all their services next year, with the new model to be piloted at 15 member firms this month where they will stop charging for work by the hour for all services, including litigation.
The beginning of the end?
The following question and answer appeared in the Judicial Line section of the recent edition of New Law Journal:
Q Is there power for the court to apply the multi-track costs budget regime to pre-1 April 2013 claims?
A The costs management powers in the CPR (r 3.12 et seq) only apply to multi-track cases commenced on or after 1 April 2013. However, nothing prevents a judge in the exercise of his general case management powers from ordering the filing of costs budgets if they were so minded. The order would need to expressly provide for the sanction for non-compliance.
I am not sure the need for the sanction to be expressly provided for in the order is still correct in light of Mitchell v News Group Newspapers Ltd  EWCA Civ 1526. In that case the claimant had failed to comply with the rule requiring the filing of the costs budget 7 days before the CMC, the pilot scheme contained no sanction, but the Court of Appeal nevertheless held that applying the sanction (costs limited to court fees) was appropriate.
There was much fuss when the new portal fees were being proposed. Karl Tonks, previous president of APIL, said:
“Lawyers cannot reasonably be expected to run cases at a loss. But if the proposed fees are implemented, the only alternative will be to turn claimants away or take legal fees from a claimant’s damages, which flies in the face of the principles of justice.”
Interesting that I’ve just come across a Form of Authority that was signed by a claimant on 19 June 2010 giving the following authorisation to his solicitor:
“Client Management Fee – as per my signed Client Agreement with AAH to irrevocably and unconditionally pay on my behalf the AAH CMF in the sum of £379.00 plus VAT from my damages [emphasis added] to AAH (or as it shall direct) at the conclusion of my claim”
It’s not clear what the Client Management Fee is designed to cover or what service the claims management company performs that goes further than that offered by the solicitors. Nevertheless, it does seem that many solicitors (ie those who were panel members of this scheme) were happy to see their clients recover less than 100% of their damages prior to the fee change. And given the scheme is endorsed by Esther Rantzen it must be OK.
The Court of Appeal has unanimously dismissed the appeal in the costs budgeting case of Mitchell v News Group Newspapers Ltd  EWCA Civ 1526 (part of the “Plebgate” saga).
Although the decision is itself crucially important for costs budgeting purposes – fail to serve and file a budget on time and your costs will be limited to court fees only, with no real hope of relief from sanctions – it has much wider implications for the future of civil litigation. The courts can now be expected to take a very robust approach to compliance with rules. Failures to comply will be punished harshly. Relief from sanctions applications will be doomed to failure unless unusual circumstances can be shown for the breach. A mere failure to show prejudice will not come close to being sufficient.
Conclusion of the Court’s judgment:
“In the result, we hope that our decision will send out a clear message. If it does, we are confident that, in time, legal representatives will become more efficient and will routinely comply with rules, practice directions and orders. If this happens, then we would expect that satellite litigation of this kind, which is so expensive and damaging to the civil justice system, will become a thing of the past.”
The recent case of Vitol Bahrain EC v Nasdec General Trading LLC and others  All ER (D) 38 (Nov) provides an interesting insight into how the courts may interpret proportionality under the new test.
The matter related to an interim anti-suit injunction to prevent the defendants from pursuing any application to join the claimant to proceedings in the United Arab Emirates. The issue was whether the question of title of two oil cargoes should be litigated in England or in the UAE. The Commercial Court held the anti-suit injunction should not continue and awarded costs to the defendants to be summarily assessed on the standard basis. The value of the cargoes was some US $119m, but the hearing was not about who had title to the oil, it was about whether an injunction should be granted to restrain the defendants from joining the claimant into existing proceedings in the UAE.
The claimant’s statement of costs sought a total sum of £242,760.48, which included the costs of the without notice application as well as the costs of the return date hearing. The defendants’ statement of costs sought a total of £165,421.80.
Males J held that the amounts claimed were grossly disproportionate. He commented that the message should go out loud and clear that the Commercial Court would not assess costs summarily in such disproportionate amounts merely because the figures on both sides were broadly comparable. Control would be exercised to ensure that the costs claimed from the unsuccessful party were reasonable and proportionate. Having considered the defendants’ statement of costs, his lordship assessed their costs summarily in the amount of £75,000.
This decision envisages the interesting prospect of paying parties arguing that the receiving party’s costs are disproportionate notwithstanding that they themselves have incurred costs at a level as high or higher.
It is not clear from the case summary available how the judge reached the figure of £75,000. I suspect that this was not as a result of a line-by-line analysis of the Defendants' statement of costs.
The note at 44.5.3 of the White Book, admittedly dealing with the pre-1 April 2013 rules, states:
“The judge in a trademark dispute summarily assessed the costs at the end of the trial at £10,000 as against the £38,000 claimed. In carrying out the summary assessment the judge had not gone into any sort of detailed analysis of the objector’s statement of costs but appeared to have applied his own tariff as to what costs were appropriate for a one day paper only appeal. That approach was wrong in principle: 1-800 Flowers Inc v Phonenames Ltd  EWCA Civ 721; The Times, July 9, 2001.”
It is questionable whether this still represents good law as the new proportionality rules specifically state: “Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred”. There seems little purpose in undertaking a item-by-item assessment if the end figure will then be knocked down further to produce a proportionate amount. Of course, that is exactly the same issue that will arise on detailed assessment. Lord Justice Jackson seems to envisage that the item-by-item approach is still the first step in the process. No doubt that sometimes will be appropriate but there must be other cases where it must be preferable for the judge to say to advocates at the outset: “The damages were £x and I’m not going to allow costs of more than £y at the conclusion of the assessment. Do I need to hear from either of you further?”
The Civil Justice Council’s Costs Committee is currently undertaking a review into Guideline Hourly Rates. As part of that process they are considering whether to introduce a further category of fee earner for costs lawyers and costs clerks (their term not mine).
If this is done, will costs lawyers be placed in a higher category to costs clerks? Would non-costs lawyers be able to obtain similar rates as costs lawyers where they had “equivalent experience”? If so, what would that amount to? Would the costs lawyer qualification count for more than simply the number of years working in costs?
The Senior Courts Costs Office Guide 2013 correctly describes the approach to disclosure in detailed assessment hearings of potentially privileged documents:
“If, having examined documents lodged with or produced to the court, the court is minded to determine a point of dispute wholly or partly in favour of the receiving party it does not automatically follow that the paying party will have a right to see all of the documents relied on by the court in reaching that decision. The court should enquire of the paying party whether the paying party is content to accept that ruling (subject to appeal) or whether the paying party wishes to see the documents relied on by the court in making the ruling. In many cases the paying party will be content to agree that the court alone should see those documents. The alternatives (see below) may lead to additional delay and an increase in costs.
(b) If the paying party declines to accept the court’s ruling without inspecting documents, then, save as explained in paras (f) to (h) below, the court will put the receiving party to his election between showing the documents in question to the paying party or not relying upon them and offering to prove the fact of which the document is evidence by some other means. Alternatively the receiving party may decide to withdraw the claim for the costs of it. The court may give directions enabling the receiving party to have a fair opportunity to provide other evidence. In reaching its final decision on the issue the court will not take account of documents which the receiving party has elected not to show to the paying party.”
Those costs draftsmen and costs lawyers who continue to believe that they can simply show the documents they rely on to the judge without also having to potentially show the same to the other side have misunderstood the true position.
Extract from Narrative to bill of costs:
“Computer technology was utilised wherever possible. … The Claimants' solicitors have tried to use novel and efficient ways of dealing with the claim. Wherever possible standard documents have been prepared including questionnaires and in some cases, standard letters. Meetings with the individual Claimants have been minimised. Pro-active use of Part 36 offers and proposed schemes of settlement were intended to enable claims to be resolved in a cost effective and efficient manner”
“Novel”? Computer technology, questionnaires and standard letters?
Welcome to the Twentieth Century.
The “novel” element is also wearing a bit thin given this same standard wording is included in all bills prepared by these costs draftsmen for this firm of solicitors.
Regional Costs Judge Marshall Phillips writing in the Solicitors Journal:
“In cases issued on or after 1 April 2013, the receiving party should differentiate between work done before and after that date, proving a total for work done before and a total for work done after. The court will be applying a different proportionality test for work done during these two periods”.
For many cases, this is no doubt a sensible suggestion, but it is not required by the rules.
Secondly, so far as the courts “applying a differently proportionality test for work done during these two periods”, not necessarily. See: proportionality transitional provisions.