Guidance on remote costs hearings has now been produced. This has apparently been produced by a group of costs professionals with the support of the regional costs bench. It has been met with approval by the costs judges at the Senior Courts Costs Office. The guidance can be found on the Association of Costs Lawyer’s website here.
The 2020-21 edition of the Costs & Fees Encyclopaedia has now been published. This edition includes changes to costs and fees in the last 24 months including:
- Court of Protection, Civil Proceedings and Magistrates’ Courts Fees (Amendment) Order 2018
- Immigration and Nationality (Fees) (Amendment) (EU Exit) Regulations 2018
- Legal Officers (Annual Fees) Order 2018
- Ecclesiastical Judges, Legal Officers and Others (Fees) Order 2018
- Immigration and Nationality (Fees) (Amendment) (EU Exit) (No. 2) Regulations 2018
- Criminal Legal Aid (Remuneration) (Amendment) (No. 2) Regulations 2018
- Public Record Office (Fees) Regulations 2018
- Public Guardian (Fees, etc) (Amendment) Regulations 2019
It can be purchased direct from the publishers for £85.
Congratulations to all the speakers and The Legal Training Consultancy for managing to proceed with the Solicitor and Client Costs Conference last week.
The event was live streamed over Zoom with the speakers giving their talks from their respective lockdowns.
There were some inevitable comic moments with technical issues but, to be fair, most of these came from the delegates rather than the speakers. (My tip for delegates at these conferences is to watch via a desktop computer with any microphone and webcam unplugged. Anything else is just asking for trouble.)
With much of the legal profession now in lockdown, attention has naturally started to focus on the use of telephone/video conferencing facilities to undertake court hearings, mediations, meetings, etc.
Gordon Exall’s Civil Litigation Brief blog has been providing a large number of useful links providing various guidance on how to make use of this technology. The natural danger with this is to believe this is largely a matter of acquiring the necessary technical know-how of Skype, Zoom, etc and understanding the appropriate etiquette (eg giving consideration to what will be seen in the background of your video call). However, I have one word of warning: Scraps.
For those of us already used to working from home, there is one thing that can be guaranteed to happen during a crucial telephone hearing, video conference with client, etc. The guaranteed event is that the dog that has been happily snoozing at your feet for the past hour will suddenly hear the postman 200 yards down the road and start hysterically barking as though his life depended on it.
Equally, you can also guarantee that the doorbell will go at a crucial moment. Even if the dog is not already awake and barking, it will be now. At normal times, and disregarding barking dogs, you might simply ignore the doorbell and continue. These are not normal times. If there is no one else in the house to answer the door at that moment, ignoring the doorbell is not an option. It may be a courier delivery of papers with urgent instructions. If you miss it, there is no way of knowing if, when or how you will be able to rearrange delivery. Or, it may be an emergency gin delivery. Either way, you will have to break-off to answer it.
Four-legged friends are not the only peril. Two-legged ones pose just as much of a danger. You can explain to little Tarquin until you are blue in the face that “Daddy has a very important telephone hearing to deal with an application for relief from sanctions in the Chancery Division and must not be disturbed for the next two hours”. But the moment Tarquin gets two crayons stuck up his nose, all bets are off.
Or, your valet pops his heard around the door to enquire as to whether he should put out your brown Harris Tweed suit for later.
The perils of working from home.
If costs management orders simply set a total figure for each phase, how are VAT and success fees to be determined? This problem is explored on our Costs Budgeting Blog.
Ancient Chinese curse: “May you live in interesting times”
With much of the economy in total shutdown, coronavirus has had very limited disruption on my typical working day. When we first set up 14 years ago, it was based on remote working for all fee earners and still is. Other than the fact I will not be attending any in-person hearings for the foreseeable future, my day-to-day work continues virtually uninterrupted.
I have therefore had to spend recent days worrying about first-world, middle-class, pandemic problems:
- Being informed by our cleaning lady, who has a compromised immune system, that she is now selfishly self-isolating at home and we will have to do our own dusting for the next few weeks. Noooooooooo!
- Discovering that streaming services are considering stopping all HD streaming and limiting to SD quality as the coronavirus crisis puts unprecedented load on interweb. Noooooooooo!
- Worrying as to whether the manufacturers of Fever Tree premium tonic water are key workers and, if not, how long existing UK supplies are going to last. Noooooooooo!
- Being told by Ocado that you are now limited to two boxes of quails eggs in any one order. Noooooooooo!
I don’t have enough time left over to worry about getting sick.
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 in the incurred part of Precedent H are inaccurate.
I have had a number of first-instance decisions where the court has limited the incurred costs to those shown in the receiving party’s Precedent H. The reasoning has included:
- As PD 3E para.7.4 requires the court to “take [incurred] costs into account when considering the reasonableness and proportionality of all budgeted costs”, the court may well have allowed less than it did for the future budgeted costs if it had been aware of the true level of the incurred costs.
- Precedent H amounts to a statement of costs in relation to incurred costs and the paying party may well have acted in reliance of it. The court should not allow more than the figures contained within that statement in the absence of a good explanation for the inaccuracy.
- Precedent H contains a Statement of Truth that the budget is “a fair and accurate [emphasis added] statement of incurred” costs. A receiving party’s costs should be limited to the amount set out in such a statement.
It will be interesting to see if the higher courts follow this approach.
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 phase?
Why does only the first page of the Precedent H costs budget need to be completed where the value of the claim as stated on the claim form is less than £50,000? This strange provision is explored on our Costs Budgeting Blog.
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.