Legal Cost Specialists

Posts made in October, 2014

Recoverability of costs of negotiating costs

By on Oct 15, 2014 | 5 comments

A recent post discussed the Court of Appeal’s decision in Tasleem v Beverley [2013] EWCA Civ 1805 and apparent suggestion (flying in the face of an earlier Court of Appeal decision) that issuing Part 8 costs-only proceedings was not part of the detailed assessment proceedings (with the apparent consequence that such costs would fall outside the £1,500 cap for provisional assessment). The crucial passage was: “The bringing of Part 8 costs-only proceedings is not the commencement of, or part of, the detailed assessment proceedings, albeit it is a necessary preliminary to that process if there are no underlying proceedings in existence.” This leads on to a secondary issue of work done in relation to negotiating costs prior to Part 8 proceedings being issued. The earlier Court of Appeal decision in Crosbie v Munroe [2003] EWCA Civ 350, [2003] 1 WLR 2033 was simple and logical. There were two types of costs: 1. Those costs incurred in relation to the substantive claim. 2. Those costs incurred quantifying the costs of the substantive claim. This would cover all work post-settlement of the substantive claim negotiating costs, dealing with Part 8 proceedings and through the assessment process. Brooke LJ explained at paragraph 34: “By this route it is easy to see that even when Part 8 proceedings have to be commenced in order to obtain a court order for detailed assessment, the ‘costs of the proceedings’ within the meaning of CPR 47.19 still relate only to the costs leading up to the disposal (on this occasion by agreement) of the substantive claim. They are ‘the proceedings which gave rise to the assessment proceedings’, and the assessment proceedings cover the whole period of negotiations about the amount of costs payable through the Part 8 proceedings to the ultimate disposal of those proceedings, whether by agreement or court order.” It all seemed neat and straightforward until Tasleem v Beverley. Some of the difficulties are created by the confusingly worded CPR and Practice Directions. CPR 46.6(1) (mirroring the pre-Jackson wording) states: “Detailed assessment proceedings are commenced by the receiving party serving on the paying party – (a) notice of commencement in the relevant practice form; and (b) a copy of the bill of costs.” That...

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J-Codes and bills of costs

By on Oct 13, 2014 | 1 comment

There appears to be some confusion over the role the new J-Codes will play and whether it will be compulsory to use case management software that incorporates the J-Codes. I am therefore grateful to Alexander Hutton QC, who sits on the committee responsible for developing the new bill of costs format, for the following comments: “It is not mandatory to use the J-Codes now, nor is it planned that it shall ever be so. Many one-man/woman band solicitors and certainly many litigants in person may be unlikely ever to do so. All that is planned is that there will be a model bill of costs in the relevant Practice Direction just like there is now but which will be our committee’s recommended bill based on the J-Code time recording system (although it will be able to construct from scratch not having used the J-Codes, just as now). It will however be much easier to prepare a bill like this having time recorded by the J-Codes, as it will not involve reinventing the wheel by a costs draftsman drafting a bill from scratch, but instead using the time recording system itself to generate both a Precedent H form and a bill of costs, and where the bill can easily be compared to whatever was allowed in the approved budget in relation to each phase. That is the plan. It is obviously up to others if and when that plan comes in. While the senior judiciary have approved the J-Codes in principle, they have no official status at the moment in the rules. If and when the model bill of costs is changed in the rules to ours (and obviously that is up to others ultimately), then those who have been using the J-Codes from now will have a much easier time of it. But ultimately, at this stage, all we have done is publish them and it is up to others to use them or not as they see...

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Hourly rate indemnity principle problems

By on Oct 10, 2014 | 1 comment

A recent post commented on the potential problems caused by CCFAs which define “basic charges” along the following or similar lines: “charges for work done by or on behalf of Smith and Jones Solicitors, calculated on the basis of the hourly rates allowable for the work in the court in which the claim in question is conducted or would be conducted if proceedings were to be issued” I suggested “allowable” was meant refer to the Guideline Hourly Rates for the relevant court and that treating “allowable” as meaning whatever hourly rates it might be possible to persuade a judge to allow at the conclusion of the case would create all kinds of indemnity principle problems. Of the various comments posted in response Jacques Hughes (whose contributions are always most welcome) stated: “Why would the broader interpretation of ‘allowable’ create indemnity principle problems? ‘Work will be paid for by the hour at a rate to be determined by the court’ gives rise to no issues of uncertainty, any more than, say, a lease which provides that rents will be determined annually by a nominated surveyor” I therefore thought it might be worth expanding on my thoughts. As no more than an aside, given leases are presumably not subject to the indemnity principle, no such issue would arise with the wording of a lease drafted in such a manner. I would suggest that a lease that said no more than the rents would be those rents “allowable”, without further qualification, almost certainly would cause problems. If such CCFAs are meant to mean “Work will be paid for by the hour at a rate to be determined by the court”, why do they not say that? At best this is sloppy drafting. However, if that is what they are meant to mean, there is a clear indemnity principle problem. A bill of costs must be accompanied by a signed certificate confirming the accuracy of the bill, which has always been treated to mean that there has been no breach of the indemnity principle. If the appropriate hourly rate is to be determined by the Court at some future date, how can a bill be prepared, with accompanying certificate of accuracy, claiming a...

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Extension of fixed costs

By on Oct 6, 2014 | 10 comments

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...

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Growth in legal costs work

By on Oct 3, 2014 | 11 comments

Many costs firms appear to be busy expanding and recruiting. However, one recent comment on a post stated: “I know of at least 6 north west cost drafting firms who are making redundancies.” There is perhaps no mystery to these two apparently conflicting accounts at this stage in the post-Jackson cycle. Costs budgeting, etc has increased the need for experienced law costs draftsmen and Costs Lawyers for higher-end costs work where we have yet to see a significant reduction of work caused by other elements of the Jackson reforms. However, the impact of an expansion of fixed costs work at the lower-end should now have begun to kick-in and impact on work volumes for some firms. It is therefore perfectly possible that some firms are currently expanding at the same time as others are shrinking. Is this an accurate summary of the current...

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