Legal Cost Specialists

Posts by Simon Gibbs

Discrepancy between incurred costs in budget and bill

By on Jan 20, 2020 | 2 comments

Preparation of the Precedent H costs budget requires figures to be inserted for both past incurred work and future estimated work. PD 3E para.7.4 provides: “As part of the costs management process the court may not approve costs incurred before the date of any costs management hearing. 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 budgeted costs.” Therefore, although Precedent H includes both incurred and estimated costs, any costs management order will relate only to future estimated work. CPR 3.18 states: “In any case where a costs management order has been made, when assessing costs on the standard basis, the court will – (a) have regard to the receiving party’s last approved or agreed budgeted costs for each phase of the proceedings; (b) not depart from such approved or agreed budgeted costs unless satisfied that there is good reason to do so; and (c) take into account any comments made pursuant to rule 3.15(4) or paragraph 7.4 of Practice Direction 3E and recorded on the face of the order.” In light of PD 3E para.7.4, the “approved or agreed budgeted costs” in CPR 3.18 appears to relate only to the future estimated costs, as opposed to the incurred pre-budget costs, and CPR 3.18(a) or (b) cannot act as a limit on the incurred pre-budget costs. What happens when the pre-budget costs claimed in a subsequent Bill of Costs exceed the costs that were shown in the earlier Precedent H? Absent something going seriously wrong, the main reasons for a discrepancy between the incurred costs shown in a Precedent H and a final Bill are: (a) The costs draftsman drafting the Bill identifies some additional pre-budget work that was not included by the fee earner who prepared Precedent H. (b) The costs draftsman drafting the Bill places some of the pre-budget work into more appropriate phases than the fee earner had done when preparing Precedent H. The generally accepted starting point is that the incurred costs simply fall to be dealt under detailed assessment by reference to the ordinary reasonableness and proportionality tests. However, matters are not necessarily that straightforward where the costs shown...

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Costs budgets and experts’ trial fees

By on Nov 13, 2019 | 2 comments

The new Guidance Notes on Precedent H, following the update to PD3E para.7.4 (which came into force on 1 October 2019), moves trial brief fees from the Trial phase to the Trial Preparation phase.  This is presumably on the basis that the brief will be delivered before the trial commences and liability for the brief fee will often be treated (at least as between the solicitor and counsel) as being payable upon delivery. Strangely, the Guidance Notes give no indication as to what phase any experts’ fees for attending trial should be placed into.  Traditionally, these fees have been placed in the Trial phase.  However, the majority of experts will usually expect payment of their fee, or at least a discounted payment, where they have been booked for the trial even if the matter settles early.  Should experts’ fees for attendance at trial therefore not also be placed in the Trial Preparation...

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Legal Costs Central

By on Nov 1, 2019 | 0 comments

I’ve run a complete overhaul on Legal Costs Central (the one-stop gateway to legal costs information on the internet) part of our website.  This has updated all the relevant rules and fixed a number of broken links. Let me know if there is anything else I should be adding.

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Proportionality after West v Stockport NHS Foundation Trust

By on Oct 31, 2019 | 0 comments

This is the second look at the guidance given on the new proportionality test by the Court of Appeal in West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220. The previous post explored how the Court dealt a fatal blow to the new rule by introducing a test as to whether work was “unavoidable expenditure” (in which case it was to be allowed) and pretended that this was logically different to the “necessarily incurred” test under Lownds. The problem with this judgment does not end there. Remember how the new test was meant to work? The current version of the White Book states at 44.3.3: “The general practice on detailed assessment is to consider the reasonableness of each item that has been challenged and then to consider whether the total sum that would be allowed on that basis is proportionate or not.  If it is not proportionate, the court will then reduce the total figure to a sum which is proportionate.  That is the approach suggested by Jackson LJ in the Review of Civil Litigation Costs: Final Report (December 2010) Pt 1, Ch.3, para.5.13, and endorsed by Lord Neuberger (then Master of the Rolls) in the 15th implementation lecture on the Jackson reforms, entitled Proportionate Costs and given on 29 May 2012.” At the lecture referred to, Lord Neuberger summarised the aim of the new test as: “effectively reversing the approach taken in Lownds. In this way, as Sir Rupert said, disproportionate costs, whether necessarily or reasonably incurred, should not be recoverable from the paying party. To put the point quite simply: necessity does not render costs proportionate.” The practical effect of this would be: “As such it seems likely that, as the courts develop the law, the approach will be as Sir Rupert described it: ‘. . . in an assessment of costs on the standard basis, proportionality should prevail over reasonableness and the proportionality test should be applied on a global basis. The court should first make an assessment of reasonable costs, having regard to the individual items in the bill, the time reasonably spent on those items and the other factors listed in CPR rule 44.5(3). The court should then stand back and consider whether...

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