Legal Cost Specialists

Posts made in October, 2014

Costs of requesting oral hearing after provisional assessment

By on Oct 29, 2014 | 25 comments

If a party is unhappy with the outcome of a provisional assessment they have the automatic right to request an oral hearing. The large disincentive is that if they fail to achieve an improvement in their favour of 20% or more of the provisionally assessed amount that party will pay the costs of and incidental to that hearing. I suspect that many have interpreted the rule to mean that if a party does achieve an improvement of 20% or more than they will recover their costs of the oral hearing. However, is that what the rule actually says? The wording of CPR 47.15(10) is: “Any party which has requested an oral hearing, will pay the costs of and incidental to that hearing unless – (a) it achieves an adjustment in its own favour by 20% or more of the sum provisionally assessed; or (b) the court otherwise orders.” CPR 47.15(10)(b) appears to be drafted widely enough such that the court has a discretion not to order the party who requested the hearing, but failed to achieve the 20% threshold, to pay for the costs of the hearing. However, what costs, and by virtue of which rule, is a party who requested a hearing and achieved a 20% improvement entitled...

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Guidance on the new proportionality test

By on Oct 27, 2014 | 10 comments

The new Senior Costs Judge Master Gordon-Saker recently suggested there was no need for further guidance on the new proportionality test. He said: “It is said that we will need guidance on how to apply the new test. I disagree. The guidance is already there. It is likely that somebody will in some case or another seek to appeal the approach that has been taken. But I would suggest that there is no reason to suppose that the court hearing the appeal will do other than restate the guidance that has already been given by Jackson LJ in his final report: … I propose that in an assessment of costs on the standard basis, proportionality should prevail over reasonableness and the proportionality test should be applied on a global basis. The court should first make an assessment of reasonable costs, having regard to the individual items in the bill, the time reasonably spent on those items and the other factors listed in CPR rule 44.5(3). The court should then stand back and consider whether the total figure is proportionate. If the total figure is not proportionate, the court should make an appropriate reduction. There is already a precedent for this approach in relation to the assessment of legal aid costs in criminal proceedings: see R v Supreme Court Taxing Office ex p John Singh and Co [1997] 1 Costs LR 49.” This is to be contrasted with the views of Professor Dominic Regan, writing in the New Law Journal, that: “it is going to cost a lot of money by way of test cases to determine the new, sensible approach to proportionate costs” So, which view is correct? In one sense, I would suggest they are both wrong. A more detailed analysis of this issue can be seen here, but the problem boils down to the fact the new test is probably unworkable. On the one hand, guidance is clearly needed as to how the court should approach the issue of proportionality where, for example, a routine claim settles for £50,000 and the “reasonable” costs are assessed at £200,000. What should the court reduce this to applying the new proportionality test? If the answer to this is obvious from...

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Understanding costs orders

By on Oct 24, 2014 | 9 comments

£17,000 bill of costs served in relation to appeal. Notice of Commencement relies on a court order and attaches a copy of the same. The costs provision of the order reads: “No order as to costs” You couldn’t make it up. Perhaps when the new “automatic” bill drafting software is introduced it will also be able to interpret what costs orders...

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Fixed costs on the multi-track

By on Oct 20, 2014 | 0 comments

Lord Justice Jackson’s recent suggestion that fixed costs should be extended to disputes worth up to £250,000 was, according to the Association of Costs Lawyers’ e-bulletin, accompanied by the comment: “I appreciate that, in complex and value [sic] cases, fixed costs still won’t work. Here, the only way to control costs in advance would be to continue with costs budgeting and costs management” This is presumably meant to mean no more than cases over £250,000 should be exempt from fixed costs because they are, by their nature, complex and higher value matters where the costs are more variable from case-to-case. The ACL e-bulletin commented this was “an observation that many costs lawyers will be relieved to hear”. I’m sure they will both be very happy. Realistically, £250,000+ cases must make up a very small proportion of the cases that most costs lawyers deal with day-to-day. Further, nice as it would be to have some work remaining to see me through to retirement, once fixed costs are extended up to £250,000 there seems limited logic to stopping at that stage. Fixed costs are not meant to produce a “reasonable” figure on a case-by-case basis. A fixed fee will always be too much or too little when compared to the number of hours spent. Fixed costs, at best, are designed to produce an average figure that is reasonable across a basket of cases (although it might need to be topped up on a solicitor/own client basis). Fixed costs on the fast-track has some logic and justification. Although fast-track cases have varying (relative) degrees of complexity, by their nature, a judge must have decided each case is straightforward enough to be heard in one day. There is a relative cap on the complexity of such cases. Fixed costs for such claims will contain a margin of error as to how close the figures are compared to the time spent, but there should be a limit to the level of discrepancy. However, once you start to introduce fixed costs for claims up to £250,000, any attempt at producing figures that correspond to the actual work undertaken is clearly abandoned. The figure will be an arbitrary payment to the other side, often likely to...

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Automatically generated bills of costs

By on Oct 17, 2014 | 7 comments

The Jackson Final Report stated the purpose of the planned new case management software, for which the new J-Codes have recently been approved, was so the software included the ability to “automatically generate schedules for summary assessment or bills for detailed assessment as and when required”. I’m currently dealing with a bill where the costs order was: “The First Defendant shall pay 37.5% of the Claimant’s generic costs and disbursements of the action until the Second Defendant was added to the proceedings (19 November 2013) and the First Defendant shall pay 75% of the Claimant’s costs and disbursements as incurred solely against the First Defendant from 19 November onwards.” I look forward to seeing the automatically generated bill that properly reflects that order. You couldn’t make it...

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