Legal Cost Specialists

Posts made in May, 2015

Contents and timing of Replies to Points of Dispute

By on May 29, 2015 | 5 comments

The Association of Costs Lawyers recently set up a working party, which I was roped into, on the new(ish) provisional assessment process. One of the problems identified (although this is not strictly a problem limited to provisional assessment) is the timing and content of Replies to Points of Dispute. CPR 47.13 states: “(1) Where any party to the detailed assessment proceedings serves points of dispute, the receiving party may serve a reply on the other parties to the assessment proceedings. (2) The receiving party may do so within 21 days after being served with the points of dispute to which the reply relates.” What are the consequences of serving outside 21 days? As to content, PD 47 para.12.1 states: “A reply served by the receiving party under Rule 47.13 must be limited to points of principle and concessions only. It must not contain general denials, specific denials or standard form responses.” Other than the very limited examples given in Precedent G, what does this allow and not allow? The decision in Pipe v Electrothermal Engineering Ltd (SCCO, 2014) from Costs Judge Master Rowley gives some guidance on the issue. At the risk of doing a serious injustice to a very carefully considered, reserved, judgment, it might be summarised as: serve what you like when you like and the only adverse consequence is likely to be in costs. Of course, this is not a binding decision (even on Master Rowley) and I have had different results before other judges. The Regional Costs Judge in Manchester struck out Replies that had been served late and without permission and ruled that if the receiving party wished to rely on the same they would need to make a formal application for permission to serve late. The Senior Costs Judge Master Gordon-Saker disallowed late Replies where the application for permission to rely on the same was made orally at a detailed assessment hearing, as there was no good reason for late service. He did observe that the argument was really about the costs of the late Replies, as opposed to the admissibility of the same. Replies are optional and the receiving party could simply recite orally the contents of the Replies even if permission for...

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Costs budgeting and detailed assessment

By on May 26, 2015 | 4 comments

I note one of Lord Justice Jackson’s recent recommendations concerning costs budgeting is: “Until the new form bill of costs is developed, in those cases where detailed assessment proceedings are commenced, the receiving party should lodge a summary of its bill in a format which matches Precedent H” Is it just me or is it hopelessly naive to believe that a receiving party who discovers they have overspent on one phase of a budget but underspent on another will not simply shift the work over in the summary from the overspend to the underspend? In the absence of a detailed bill showing what work has actually been done by phase, how is the true position to be established? I also find it difficult to see how the information provided by a summary (even if accurate) is then meant to be applied to a detailed bill that is not drafted by phase. For example, if the summary shows an overspend of £10,000 on a particular phase, where does the judge make the deduction from the detailed bill? Does the judge just not knock £10,000 off the total bill at the end of the...

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Cap on costs budgeting fees

By on May 20, 2015 | 8 comments

The post-Jackson CPR remains a mess of badly drafted and confusing rules. The Glossary to the CPR defines “Budget” as: “An estimate of the reasonable and proportionate costs (including disbursements) which a party intends to incur in the proceedings.” The words “intends to incur” suggests that “budget” is limited to future costs. However, PD 3E para.6 states: “Unless the court otherwise orders, a budget must be in the form of Precedent H annexed to this Practice Direction.” There is no doubt that Precedent H requires both past (“incurred”) costs and future (“estimated”) costs to be included. A completed budget (following Precedent H) will therefore include, by necessity, both past and future costs. PD 3E para.7.4, under the hearing “Costs management orders” states: “As part of the costs management process the court may not approve costs incurred before the date of any budget. The court may, however, record its comments on those costs and will take those costs into account when considering the reasonableness and proportionality of all subsequent costs.” It is therefore clear that a costs management order can only “approve” future costs. This is well established and not disputable. PD 3E para.7.2 states: “Save in exceptional circumstances – (a) the recoverable costs of initially completing Precedent H shall not exceed the higher of £1,000 or 1% of the approved or agreed budget” What though, for these purposes, is the “approved or agreed budget”? The court cannot “approve” costs already incurred. I am sure that this was intended to mean that if a budget filed by a party totalled £110,000 which was agreed/approved in full, the costs of completing that budget would be limited to £1,100 (being 1% of £110,000). But, what if the budget includes £110,000 incurred costs and £110,000 future estimated costs and the same is agreed/approved in full? Which of these applies: The cap of the total for preparing the whole budget is £1,100 (being 1% of the £110,000 future costs) with nothing recoverable for the work including in the budget the incurred costs? The cap on preparing the part of the budget relating to the future costs is £1,100 (being 1% of the £110,000 future costs) with no cap on the recoverable costs for the work...

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Costs budgeting here to stay

By on May 18, 2015 | 0 comments

In a surprise development, Lord Justice Jackson, the architect of the costs budgeting regime, has come out in support of the retention, largely unchanged, of costs budgeting. The one thing we can now be certain of is that the extension of fixed fees will come sooner rather than later. This would immediately: Remove the need for costs budgeting in those cases and thus save court time avoiding the need for costs management hearings. Ensure “proportionality” of the costs recovered. Save further court time by reducing the number of provisional/detailed assessments. I am becoming increasingly convinced that the total balls-up of the introduction of the Jackson reforms is a cunning plan to make fixed costs across the board...

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Shock non-reduction in claim numbers post-Jackson

By on May 12, 2015 | 1 comment

Another financial year passes and, regular as clockwork, the Association of Personal Injury Lawyers (APIL) release another misleading set of figures relating to claim numbers that totally misses the real story. Regular readers will remember last year’s APIL story “that an information request from the Compensation Recovery Unit (CRU) has shown the number of whiplash claims has fallen by 29% in only four years.” This has been trotted out again with it being reported: “the number of whiplash claims registered with the government has fallen by 23% since the Jackson reforms. A freedom of information request by the Association of Personal Injury Lawyers (APIL) found that a total of 376,513 claims, mostly following road collisions, were made during 2014/15”. Jonathan Wheeler, APIL’s new president blogged: “Government figures tell us that whiplash claims have fallen over the last four years by more than a third – that’s almost 200,000 claims. A Freedom of Information Act request made by APIL shows that they have fallen by eight per cent in the past year alone”. So what do the CRU figures actually show for the number of RTA cases registered to CRU for recent years: 2014/15           761,878 2013/14           772,843 2012/13           818,334 2011/12           828,489 2010/11           790,999 This shows a modest reduction of under 4% in RTA claims from 2010/11. Even from the peak of 2011/12, this is only an 8% reduction. If whiplash claims are declining, it must have strangely coincided with a large increase in non-whiplash claims. The far more likely explanation is that the same types of claim have (for unexplained reasons) been recategorised from whiplash to non-whiplash. The real story from the latest CRU figures concerns the total numbers of new claims reported (RTA and non-RTA): 2014/15           998,359 2013/14           1,016,801 2012/13           1,048,309 2011/12           1,041,150 2010/11           987,381 The total number of new claims is virtually unchanged from pre-Jackson and, indeed, slightly up on 2010/11. So, the real story is that, contrary to all the scaremongering that went on pre-Jackson, two full years post-Jackson there has been no massive drop in the number of claims being brought (the Access to Justice Action Group predicted a 25% drop). No doubt claimant solicitors are feeling the pinch in terms of profits post-Jackson, but access...

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