Legal Cost Specialists

Posts made in January, 2017

Precedent R Budget Discussion Reports

By on Jan 27, 2017 | 4 comments

For cases where proceedings are issued on or after 6 April 2016 and cost budgets have been filed, parties must file an “agreed budget discussion report” no later than 7 days before the first case management conference (CPR 3.13(2)). The budget discussion report must set out (PD 3E para.6A): (a) those figures which are agreed for each phase; (b) those figures which are not agreed for each phase; and (c) a brief summary of the grounds of dispute. The parties are encouraged to use the Precedent R Budget Discussion Report. Precedent R leaves something to be desired. Two of the columns are headed, respectively, “Claimed” and “Offered”. The choice of the word “Claimed” is somewhat odd as nothing can be claimed in a budget in respect of incurred costs.  Incurred costs are there for reference purposes only because a court cannot approve costs incurred before the date of the budget (PD 3E para.7.4).  Future estimated costs are no more than that: an estimate.  There is no “claim” for those costs.  At best, the future estimated costs are the amounts a party is “claiming” should be allowed in a costs management order.  Perhaps I am being overly picky. A weightier issue is the absence (so far as I can see) of any guidance as to what figure is meant to be included in either of the two columns.  Given a court cannot approve incurred costs, should the “Claimed” column not be limited to estimated future costs only?  As a court can only approve future costs, surely it is only in respect of those costs that an opponent can make an “offer” as part of the budget discussions.  If the “Claimed” and “Offered” columns included both incurred and estimated costs, a court would have no way of knowing to what extent an offer correlated to what the court could approve even if it accepted the “offered” amount as being appropriate.  For example, if the Witness Statements phase of the budget includes £1,000 for incurred costs and £1,000 for estimated costs that gives a total of £2,000 for the phase.  If Precedent R is meant to show the total (here £2,000) and the opponent “offers” £1,500, how much of that £1,500 relates...

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Does hindsight now apply to assessment of legal costs?

By on Jan 23, 2017 | 1 comment

I previously commended on the fact the law has traditionally avoided applying hindsight when assessing the reasonableness of legal costs that have been incurred. This approach was confirmed when applying the old proportionality test in Lownds v Home Office [2002] EWCA Civ 365: “the proportionality of the costs incurred by the claimant should be determined having regard to the sum that it was reasonable for him to believe that he might recover at the time he made his claim” I also commented on the problems this creates when trying to apply this in practice. However, has this basic principle survived recent reforms? CPR 44.3(5)(a) certainly provides that “costs incurred are proportionate if they bear a reasonable relationship to the sums in issue in the proceedings”, although that simply begs the question as to what sums really were in issue. I would suggest that the traditional “rule” against applying hindsight may no longer apply. Certainly, in the area of personal injury claims, the majority of matters are now subject to one form or another of fixed fees.  Generally, the greater the level of damages recovered, the higher the award of fixed costs to a successful claimant.  This is intended, on a swings-and-roundabouts basis, to reflect the fact that the higher the level of damages recovered the more complex the matter was likely to have been and the more work that would have been reasonably necessary. However, the crucial point to recognise is that claimants’ costs are calculated by reference to the damages actually recovered, not the amount claimed or the amount it may have been reasonable to expect to recover. If costs in the majority of cases are therefore now expressly subject to hindsight, by reference to the damages recovered, on what logical basis should those cases that fall outside fixed costs be subject to a fundamentally different test?  Lord Justice Jackson is now embarking of a massive further extension of fixed fees.  Again, initial suggestions are that these will based (at least in broad bands) on greater damages recovery meaning greater costs recovery). It would be very odd to have two different general principles (absolute hindsight v no hindsight) operating at the same time in civil claims. It would be nice...

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Costs Lawyer work

By on Jan 16, 2017 | 1 comment

My annual Costs Lawyer Practising Application form needed to be completed before the end of 2016. As usual, this contained a section asking about the source of instructions during the previous year (solicitor, non-solicitor, legal aid, non-legal aid, etc).  However, this year, for the first time, rather than ask for the percentage of cases falling into each category, it asked for the actual number of instructions from solicitors and non-solicitors.  This is no doubt as a result of the expectation of the Legal Services Board that the Costs Lawyer Standards Board better understand the nature of the work being undertaken by Costs Lawyers. The odd thing about the application form was the way the question was worded asking for “the number of instructions you (not your firm) received from a Solicitor” and “Non-Solicitor”. Like most costs firm, I suspect, the majority of instructions received by my firm are given to the firm rather than to any named fee earner.  It is normally a question of internal case loads/convenience as to which fee earner then deals with the matter.  Less often a new case will be marked for the attention of a particular fee earner but, again, may be allocated to another fee earner.  Only occasionally is a new instruction expressly addressed to an individual (and, even then, will sometimes need to be reallocated, with the client’s consent, depending on existing commitments). Given the question expressly excludes instructions received by the firm, the actual number for most Costs Lawyers (sole practitioners aside), is likely to be very small and largely meaningless. It is perfectly possible that I have simply misunderstood what was wanted and the question was actually aimed at the number of cases where work was undertaken.  However, if so, I suspect I was not alone in reading this differently. Even if it was clear as to what was being asked, I am not sure how meaningful it is to know the number of cases where instructions are received and/or cases worked on.  At least in the past, some Costs Lawyers dealing with volume, low value personal injury work might handle 100 new cases each month.  In contrast, a Costs Lawyer who exclusively drafts bills in group litigation might...

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Personal injury reforms challenged

By on Jan 13, 2017 | 3 comments

Independent economists have criticised the government’s planned personal injury reforms on the basis the reforms would benefit insurers at the expense of consumers and taxpayers. The term “independent” is perhaps relative given they were instructed to review the reforms by the Law Society, Association of Personal Injury Lawyers and Motor Accident Solicitors Society.  Here we see the same interesting phenomena that occurs in personal injury claims where the “independent” medical expert instructed by the claimant produces a report favourable to the claimant and the “independent” medical expert instructed by the defendant produces a report favourable to the defendant. None of this is to suggest that the contents of the report are inaccurate or misleading, but it is doubtful the addition of the word “independent” adds anything.  Frankly, the fact this review was undertaken by “economists” is not much of a recommendation itself given the recent accuracy of most economists’ predictions. In any event, when in human history has a special interest group commissioned a report that reached a conclusion contrary to the interests of that group?  If it has ever happened, the report never saw the light of...

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