Legal Cost Specialists

Faster trial pilot

Costs budgeting was, in theory, meant to operate akin to summary assessment at the outset of a claim. The serious flaws with the implementation process and numerous practical problems, with which readers will be more than familiar, has made costs budgeting an expensive mess with little of the hoped for benefits being delivered.

A new shorter trial pilot scheme is being introduced into the courts in the Rolls Building that will seek to bypass these problems. This will dispense with costs budgeting, unless the parties agree otherwise. Within 21 days of the conclusion of the trial, or such other period as ordered by the court, the parties shall each file and exchange schedules of their costs incurred in the proceedings. These “should contain sufficient detail of the costs incurred in relation to each applicable phase identified by Precedent H… to enable the trial judge to be in a position to make a summary assessment thereof following judgement”. The court will summarily assess the costs save in exceptional circumstances.

The expense of costs budgeting will be avoided. The costs of assessment should be slashed.

The downside over costs budgeting is that it deprives the parties of the opportunity to know what costs they will face. Why not bring back District Judge Lethem’s routine costs capping orders?

The summary assessment of potentially significant costs will still lead to the problem of largely arbitrary figures being allowed, but the fact this will be based retrospectively on the costs actually incurred rather than based prospectively on speculative future budgets is no more likely to result in injustice that the costs budgeting process. With proportionality now being the overriding factor, and trumping reasonableness or necessity, rough justice is all that can be expected.

If the pilot scheme is successful for these types of commercial claims, and there is no reason to suppose it will not be given its simple approach, it will only be a matter of time before this is extended to other litigation.

How much simpler Lord Justice Jackson’s Report might have been if it had simply said:

“Scrap detailed assessment. Summarily assess everything upon settlement with the costs capped at a proportionate figure disregarding reasonableness or necessity.”

No need to end recoverability of additional liabilities. No need for Qualified One Way Costs Shifting. No costs budgeting. No new Bill of Costs format. No new relief from sanctions test and the Mitchell/Denton farce. Etc. Etc.

9 thoughts on “Faster trial pilot”

  1. Seems to have similarities to the approach I suggested in my comment on the previous posting, ie work out the reasonable and proper costs at the end and then arbitrarily slash them by one third in order to comply with what is clearly the new (but unwritten) overriding objective, namely to ensure that the successful party always receives less than justice.

  2. @Peter, nobody is depriving a successful party of justice – It’s just not appropriate to achieve it at any price. The new Overriding Objective is very clear, and written in unambiguous terms – as is CPR 44.2
    I agree it is unacceptable that parties are likely to be left in the dark and at the whim of a Trial Judge on whatever arbitrary amount is awarded, particularly when it may be said in the main Judges really do not know the realities of the costs of litigation, nor much about costs generally, but the present rules are a by-product of years of practitioners buffeting the system with outrageous demands for costs which frankly were never going to be sustainable
    And remember. such solicitors have been aided and abetted in such claims, by certain firms of draftsmen whom have been only too keen to advertise how they can “maximise your profit costs” and claim amounts and rates which should never have seen the light of day

  3. “but the present rules are a by-product of years of practitioners buffeting the system with outrageous demands for costs which frankly were never going to be sustainable”

    Rubbish. You’re forgetting there were two clear limits on any “outrageous” claims for costs.

    1. Negotiation.
    2. Assessment.

    You write as if a bill was bunged in and paid.

    The costs industry had settled after the early fiasco (dramatically titled the Costs Wars, presumably by middle aged men wishing they were in the SAS) and worked perfectly well.

    If a receiving party ever recovered “outrageous” costs that was the fault of the paying party’s nominated legal representative or their costs person.

    Jacksons’ report is largely utter b******s and anyone with half a brain at the coal face knows this.

  4. @ me and my cat

    That’s a well reasoned response, thank you.

    There was no mention of a bill being “bunged in and paid”. The emphasis was on what is claimed . Negotiation and assessment is no limit to that, and indeed your comments largely prove the point that excess in claims has been the expected norm in some poor quarters. The DOH for example quote the gross excess in costs claims against them, to introduce fixed fees. Result, fixed fees will be introduced.

    The costs “industry” (interesting use of that work, as it implies manufacturing, rather than something professional, which latter term I always preferred for my own work & career) may well have settled as you suggest, but largely to its own ends, which is probably why their cries of lost career now falls on deaf ears.

    As for it “worked perfectly well”? The Jackson Reform was driven by the need to control costs, which tends to suggest that your view is insular. How it was then implemented into poorly thought out rule changes, and the consequences in some areas, is a matter for another debate

  5. wheretheresblame.....

    Hey Simon,

    For what it is worth here is my view;-

    1) Doctrine of proportionality has never worked and never will, not just because of bad rule drafting but also because the bulk of the wolf reforms guaranteed most claimant lawyers (not claimants) disproportionate costs. Lets not forget the government controlled the hourly rates, the only other big factors were success fee and ATE premiums and these were allowed on assessment at levels beyond extortionate. These have been waived through in so many cases to include those decisions handed down in the Appeal Courts.

    2) Bad draftsmen were/are a factor, the people who draw bills containing 8 or 9 fee earners claiming costs for inter fee earner discussions and internal emails, or knowingly claiming £250 per hour for the office junior etc etc.

    3) Law firms with a medical agency owned by a Partners wife/husband situated in the same building (meaning of “agency” a desk, a computer and a printer to create the invoices).

    4) The biggest factor is however Judges who allow 2 & 3, and don’t/didn’t understand that 1 was the root cause.

    Question:- Will costs budgeting work???, Answer:- look at the CPR its just a pointless layer that has no end goal, of course it won’t.

    P.S Costs Wars:- I was involved in some of those battles and some of the greedy people at the receiving end were already millionaires living abroad. Those challenges were necessary and had they not taken place we would have been in a complete fixed costs regime already.

  6. Replying belatedly to anonymous on October 9th at 9:33am, I agree that it’s the arbitrariness of the process by which costs are reduced that is offensive. When a budget is prepared the costs draftsman has to toil for many hours to work out the incurred costs by case stage. The fee-earner then has to toil for further hours providing the best estimate they can of the future work that is likely to be required. The resultant calculation then comes before someone who, as you say ‘does not know much about costs generally’, who will therefore not want to be told or to understand the detail of the calculation, and who then makes an arbitrary reduction in the amount permitted for future work. Where is the justice in that?

    I am not aware of any evidence that the process of detailed assessment fails to prevent the recovery of excessive costs. That, after all, is its function and one that it has exercised for a very long time. Most claims for costs are agreed in the light of the parties’ realistic assessment of their prospects if the bill is subjected to detailed assessment.

    As one of the declared objective of the Jackson ‘reforms’ is to control costs by allowing less than the amount that is reasonable and even necessary to conduct a successful case, I still think my proposal is better. It cuts out the entire budgetary process, which only serves to make litigation slower, more expensive and unjust, and has the virtue of showing exactly what the ‘reforms’ mean in reality.

  7. Doesn’t this simply go back to the fact that the Judiciary views Costs Draftsmen, Costs Lawyers etc (or whatever we are calling ourselves this week) as the a*se end of the legal profession? This is why the ACL only get to sit on kiddy chairs at meetings with the Judiciary. They will only be happy when they have exterminated us all. It sounds as if commercial law is the next thing to go for fixed costs. As I said in a previous post, I am just glad I am coming to the end of my career and I am not starting out.

  8. In response to Ticklemebills at 11:10

    Not everyone takes such a low view of costs draftsmen. When people (normal ones, I mean, not lawyers) ask me what I do, I have found that the reply that generates the highest level of understanding and goodwill is to say that just as the solicitor is a parasite on the client, I am a parasite on the solicitor. Always goes down well.

    We may in fact be at the top end of the food-chain rather than the a*se end.

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