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.