Legal Cost Specialists

Detailed assessments after costs budgeting?

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.

4 thoughts on “Detailed assessments after costs budgeting?”

  1. Ok, been a few doom and gloom stories on here in the past. All attract readers and are good advertising I guess

    And no I am not niave as I do have grave concerns too

    What I want to know is Simon’s thoughts as to expected impact of the above on GWS?

  2. Simon will no doubt say, as do most Defendants, that this wont effect them substantially, as there is enough “big stuff” around to keep them and other Costs Lawyers in clover for years to come.

    Funnily enough, if you look at many of the main Defendant Solicitor Costs Specialist firms, they are all heavily recuiting – and they deal mainly with bottom end costs claims.

    Either (1) Defendants are being incredibly naive, or (2) they are gearing for the new wave of costs challenges, which they inevitably propogate

  3. If HHJ SB QC and those of like mind have their way, then the days of detailed assessments even (perhaps especially) in large cases are coming to an end. The fairly clear aim is for procedural judges to set staged budgets which, for all the rhetoric, will act both as caps on how much the receing party can expect to recover and as a a determination of what the paying party can expect to pay (and all in 10 mins at a CMC).

    Judicial tarrifs by another name.

    Whether that will happen, whether rules seeeking to achieve this will survive challenge and whether, even if they do, it will just shift the battle ground from one hearing to another is another matter.

    However, don’t underestimate the determination of some of those involved to replace inter partes arguments about costs with judicial tarrifs.

  4. Whilst I sometimes put 2 and 2 together and get 22, is the fact that Defendant firms are recruiting linked to the fact that every time a budget is submitted it will be fully challenged meaning an end to one final detailed assessment, but lots and lots of mini ones on the way. No wonder Professor Dominic Regan was stating that costs wars 2000 were a teddy bear’s picnic to what is to come.

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