Legal Cost Specialists

White Paper costs conference

Another day, another costs conference.

Yesterday I was speaking at the White Paper, rather longwindedly titled: Costs, Funding, Litigation, Jackson: Shaping LASPO into a Highly Developed Litigation Business Model conference on the subject of costs budgeting.

This was another sell out event for White Paper. Hardly a surprise given the quality of their speakers (with one obvious exception yesterday) and given the fantastic pricing. The event is due to be repeated in March and I believe there are still some places left (see link).

One of the other speakers was cost judge Master Haworth. There has been much discussion as to how costs judges will apply the new proportionality test. As Master Haworth pointed out, this issue may not arise. Where a costs management order has been made, which will apply to most multi-track cases in theory (fast-track matters being subject to fixed fees where the issue of proportionality will therefore not arise), we will have an answer as to what costs are deemed to be proportionate. The judge making the costs management order is meant to apply the new proportionality test when setting the budget. It would be unusual for a costs judge to revisit the issue. Costs up to the budget will be deemed proportionate.

None of this provides any kind of an answer as to what level of costs it is proportionate to incur to recover, for example, £30,000. That will now be the dilemma for the judge making the costs management order.

Oh, and then the Court of Appeal.

Oh, and then the Supreme Court.

Oh, and then probably the ECHR for good measure. 

6 thoughts on “White Paper costs conference”

  1. Master H is forgetting about a situation where a DJ waves a budget through on a damages case said to be worth say £300K but then a Circuit Judge decides at trial that the damages should be £50K. The same situation would arise in relation to the Claimant’s acceptance of a vastly lower Part 36 offer. The DJ will be testing the budget and not the evidence / worth of the case.

    Surely a DJ who conducts the DAH will have to say that the costs should be proportionate to the damages and that can only be dealt with at the DAH.

  2. Depends. On the basis of Motto and Lownds, unless the judge finds that the claim for the £300k was unreasonably brought and/or that the claimant did not have a bona fide belief in the value of that claim at the time he or she was bringing it, then proportionality will be judged by the value of the claim as it reasonably appeared to C, and not the sum finally awarded.
    Of course, Lownds is at least partly redundant post April and Motto may fall to be revisited…

  3. Comment at 11:27am.

    Jackson has said all along that disproportionate costs don’t suddenly become proportionate because they were necessary. Applying the ruling in Motto and Lownds would simply be preserving the status quo.

    Surely if a Solicitor incurs £300K on a case which may originally have been worth £300K but evidence reduced it to say £30K, the £300K costs are surely disproportionate.

    The issue is not really whether the costs are proportionate or disproportionate, it is what is the extent of the remit the Court will be given if there is a ruling of disproportionate costs.

    The current test of necessity does not have any teeth and Court’s are often reluctant to sharpen their sword. The net result is that the difference between a test of reasonableness and a test of necessity produces no real difference.

  4. Wouldn’t a simpler way of dealing with the issue described above be by asking for a % based order for costs? Allowing only 20% of the budget to reflect the failed heads (or whatever) is surely the easiest way to go about things?

  5. Hank – that is not relevant with a Part 36 acceptance though is it – the quantum of costs will be left to the DJ at the DAH to decide.

  6. I take your point but tactics will have to change and in any case where there are the issues identified above, then I think it likely that a P36 would not be made. Summers in the Supreme Court recognised this. In fact, with QOCS, the example given above would be an ideal case to try and get an issue based order to try and offset some of the claimant’s damages against D’s costs.

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