Extension of fixed costs
Lord Justice Jackson has called for the development of a fixed costs scheme for all claims with a value of up to £250,000. Kerry Underwood’s blog helpfully sets out a summary of how this might work and concludes:
“The potential massive losers here are barristers”
Barristers? Sorry? There is one much more important group I can think of that might be losers if this were to happen (and I’m not just talking about costs officers in the Senior Courts Costs Office).
Interestingly, the recent major extension of fixed costs in the fast-track and the end to recoverability of success fee and ATE premiums has already ended much of the clamour for further major costs reforms from claimants and defendants. Once the main run-off of pre-Jackson cases has gone through the system, one would have expected pressure from the judiciary for further change to also end if it was not for one thing: costs budgeting and costs management (or is that two things?).
The new Senior Costs Judge Master Gordon-Saker recently launched a strongly worded attack on the lack of training for judges in costs budgeting. He reported how, at a recent Jackson training session he attended, the group of judges he was with were asked to estimate the costs of a five day professional negligence case at the High Court. The results were estimates varying from £30,000 to £150,000.
We may well see the situation that the nightmare unleashed by the ill-thought-out introduction of costs budgeting will, within a year or two, cause the judiciary (and possibly practitioners alike) to conclude a massive extension of fixed fees is the only solution to the mess that has been created. Indeed, Lord Justice Jackson highlighted one of the advantages of the extension of fixed costs to be:
“Such a scheme may be particularly welcome now, because it will dispense with the need for costs management and costs budgeting in cases valued at less than £250,000.”
Some possible alternatives include:
1. Suspending costs budgeting until there is a new bill of costs format that mirrors costs budgeting phases.
2. A comprehensive survey of costs budgets approved to date to see whether there is any consistency in amounts allowed (or logic to the figures) and whether the amounts allowed are likely to have any downward pressure on the overall costs that may be awarded at the conclusion. The whole purpose of costs budgeting was to control costs. To the best of my knowledge, no attempt has been made to determine (from proper evidence rather than anecdote or self-selecting survey) whether this is achieving that aim.
3. Intensive costs management training for judges (surely a minimum of one week) with no judge allowed to make costs management orders until that training has been completed and the judges understanding properly assessed.
4. A clear and sensible timetable put in place for the exchange and filing of budgets so 1000s of these documents do not continue to be prepared that then serve no useful purpose (either because the matter settles before a costs management hearing or the court decides not to make a costs management order) other than wasting the parties’ time and money.
5. Scrapping costs budgeting for cases where estimated costs do not exceed £100,000. Replace then with costs estimates (giving a global figure) from which the court can make a costs management order. It is wishful thinking on the part of costs budgeting evangelists that a phase-by-phase budget for such cases is likely to produce a more rational, reasoned or fair overall figure than a global costs estimate. This would save an enormous amount of time and expense to the parties and the courts, both at the time of making the costs management order and at any subsequent detailed assessment hearing avoiding arguing over phase-by-phase issues.
No doubt the rules committee would welcome any other helpful suggestions.