Legal Cost Specialists

Posts made in July, 2016

Timing of orders for interim costs payments

By on Jul 27, 2016 | 3 comments

I have previously commented on the issue of the timing of orders for interim costs payments. CPR 44.2(8) reads: “Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.” CPR 47.16(1) reads: “The court may at any time after the receiving party has filed a request for a detailed assessment hearing – (a) issue an interim costs certificate for such sum as it considers appropriate; or (b) amend or cancel an interim certificate.” I had always read this to mean there were two stages at which such an order could be made: At the same time an order for costs is being made (usually following a trial). After a request has been filed for a detailed assessment hearing. If an order for a payment on account had not been made when the costs order was being made, the next opportunity to obtain an order for an interim payment would not arise until after a request for a detailed assessment hearing had been made.  This is the view shared by the authors of Cook on Costs. This issue came up for determination in the recent case of Ashman v Thomas [2016] EWHC 1810 (Ch) (19 July 2016). Chancery Master Matthews had given judgment and awarded costs to the defendant.  Subsequently, when trying to agree the terms of the order, the parties fell out over an attempt by the defendant to include a term for a payment on account of costs, which the claimant objected to.  The matter was referred back to the Master for a decision to be made on written submissions. The claimant argued that a payment on account should be sought at the time that the costs order is made.  The alternative was that an interim costs certificate may be issued at any time after the commencement of the detailed assessment process, under CPR 44.16(1).  (This is a typo in the judgment and should clearly be CPR 47.16(1)).  As there had been no request for a payment on account at the time the order was made and as no detailed assessment proceedings...

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Offers in detailed assessment proceedings

By on Jul 25, 2016 | 0 comments

On Day One of Contract Law they teach you that if a party makes an offer (“Offer A”) and the other party rejects the offer, the rejection of the offer means Offer A is no longer open for acceptance in the future. They also teach you that if a party makes an offer (“Offer B”) and the other party makes a counter-offer (“Offer C”), that counter-offer amounts to rejection of Offer B and Offer B therefore cannot be accepted in the future. It is also well established that Part 36 is a self-contained code which provides expressly for the manner in which offers may be made, modified and withdrawn and that as such it displaces the ordinary rules of common law.  The CPR provides that unless a Part 36 offer is expressed to be time limited, it remains open for acceptance unless written notice has been served withdrawing the offer.  This means, for example, that where a party makes an offer (“Offer D”) the other party can make as many counter-offers or counter-Part 36 offers as they like but still accept Offer D at some point in the future (if it has not been expressly withdrawn by that stage). An interesting twist on this issue come in the recent case of DB UK Bank v Jacobs Solicitors (claim no. HC2013000358) on which Andrew Hochhauser QC, sitting as a High Court judge, said there was “apparently no authority directly on the point”. The court ruled that that a claimant’s Part 36 offer amounted to a counter-offer, meaning that an earlier common law offer by the defendants was no longer open for acceptance.  In other words, where a party makes an ordinary offer (“Offer E”) and the other party makes a Part 36 offer in response (“Offer F”), the consequence is that Offer E is no longer open for acceptance. Although this is relevant for all litigation, it is particularly important in the context of costs litigation. PD47 para.8.3 states: “The paying party must state in an open letter accompanying the points of dispute what sum, if any, that party offers to pay in settlement of the total costs claimed.  The paying party may also make an offer under Part 36.”...

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Law Costs Firm of the Year – Gibbs Wyatt Stone

By on Jul 22, 2016 | 2 comments

I am delighted to announce that Gibbs Wyatt Stone has won the prestigious ‘Law Costs Firm of the Year’ award. I have to confess that this did not come as a complete surprise.  Readers may recall we had previously been awarded ‘Most Outstanding Law Firm of 2016, the UK’ by Wealth & Finance INTL magazine.  They recently chased this up to see if we wanted to take out one of their expensive packages to promote the fact we had won this award. I responded: “Dear Mandeep, I write further to your email below and have discussed this with my fellow partners. We operate in a very niche area of law (law costs drafting) and feel that ‘Most Outstanding Law Firm of 2016, the UK’ is rather too general an award to have any marketing potential from our perspective. I do not know whether Wealth & Finance INTL has a specific award for the category of ‘Law Costs Firm of the Year’.  If such a category did exist, given our success in being awarded ‘Most Outstanding Law Firm’, I would hope your awards panel might look favourably on us being considered for the same. If we did happen to be successful in such a category, it is likely that my fellow partners would look very favourably on taking one of your packages to publicise our success. Kind regards, Simon Gibbs” All credit to the efficiency of their awards panel because within a little over one hour I received this response: “Hi Simon thanks for your email. I have spoken to my team about this request, and I am pleased to inform you that this would be an option, our research team would be delighted to award you the title of Most Outstanding Law Firm of 2016 – Law Costs Firm of the Year’. Do let me know you [sic] thoughts on this and if you have any queries. Kind regards Mandeep Singh” I must admit to being rather overwhelmed by all this.  I take no personal credit for this success but believe it is a reflection of the hard-work, talent and sheer determination of my fellow partners and colleagues at Gibbs Wyatt Stone. If anyone else fancies a similar award,...

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Date to file costs budgets

By on Jul 19, 2016 | 3 comments

When costs budgeting was first introduced there was a fair amount of uncertainty as to when the budgets should be filed and exchanged (a problem caused by the apparent conflict in wording between the rules and the contents of the directions questionnaire). The latest version of the rules (coming into force on 6 April 2016 and applying to cases where proceedings are issued after 6 April 2016) provides: “CPR 3.13(1) Unless the court otherwise orders, all parties except litigants in person must file and exchange budgets— (a) where the stated value of the claim on the claim form is less than £50,000, with their directions questionnaires; or (b) in any other case, not later than 21 days before the first case management conference.” It is difficult to see the logic behind the different dates for when the budgets should be filed and exchanged.  To do so with the directions questionnaire, for lower value claims, is inevitably a costs front-loading step.  It is likely to be a more disproportionate additional cost for these lower value claims than it would be for higher value ones.  It is also more likely to be an additional wasted cost as lower value claims are, on average, more likely to settle at an early stage in proceedings and often well before a CMC (when a costs management order might actually be made). The latter problem is compounded by the fact that the courts continue to struggle to list matters for CMCs at an early stage.  The consequence of this is that by the time the matter does reach a CMC the earlier costs budgets will often be out-of-date and largely redundant (with the work therefore either being wasted or having to be repeated with up-to-date budgets). It is unfortunate that the rules have been drafted in such a way as to generate a largely unnecessary and unhelpful front-loading of costs.  Unless you are a costs lawyer or law costs draftsman I...

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Applying the new costs proportionality test

By on Jul 15, 2016 | 3 comments

Costs Law Reports’ latest Costs Bulletin contains some interesting comments on the new proportionality test. Giving the background to the previous approach: “Hitherto, there are rules and a body of case law which enable matters such as hourly rates, success fees and the indemnity principle to be predicted with a degree of certainty. In this way, the outcome of the line by line assessment can be calculated closely enough to enable decisions to be taken on Part 36 offers etc with confidence.” I have some doubts that the position was ever quite this rosy such that a decision could be made with “confidence”.  An experienced costs lawyer or law costs draftsman could certainly predict the likely outcome, within a certain range, of what would be allowed by the average judge on detailed assessment.  Regrettably, not all judges behaved in a predictable way.  One might be 90% confident that the hourly rates for a routine low value claim would be limited to Grade C rates, but that was of little comfort when faced with a judge who was happy allowed Grade A rates.  Matters were obviously complicated by normally not knowing in advance whether a matter would be listed before an experienced judge or before a deputy district judge who possibly had no knowledge of even the basics of costs law.  A practitioner who has never walked out of court shell-shocked by how generous/harsh a judge has been is almost certainly a practitioner who rarely walks into court in the first place. It was certainly possible to recommend acceptance of a “generous” Part 36 that would give a fairly clear windfall to one’s client if accepted.    Equally, it was possible to pitch an offer that was sufficiently “generous” to give excellent protection, but such offers were also likely to give the other side a windfall if accepted.  The difficulty was advising on offers that placed the client at potential risk but which were anything but generous. Commenting on the new proportionality test, the Costs Bulletin states: “Costs lawyers are experts in costs. In the same way that they have developed expertise in working out what a bill is likely to be worth at detailed assessment, a new skill is now...

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