Legal Cost Specialists

Legal Costs

Jackson fixed fees problems

By on Feb 19, 2016 | 5 comments

Lord Justice Jackson’s suggested rules and grid for introducing fixed fees for all claims with a value of up to £250,000 (which he suggested could be accomplished this year if the political will is there) rather has the appearance of being put out there, not necessarily with the intention it will be formally adopted in its current form but, rather, out of a sense of frustration at the lack of progress to date and is designed simply to start discussion on the issue. It may, perhaps, therefore be unfair to be overly critical of the proposals in their current form. Nevertheless, let us take them at face value as they currently stand. There appear to be two obvious problems. The first relates to the decision that the grid of fixed fees should follow the ten stages set in Precedent H for costs budgeting. This is on the basis that: “Practitioners are now familiar with this structure and reasonably comfortable with it. Although ‘boundary disputes’ are inevitable in any structure, they will be reduced if we stick to the now established division of tasks”. The Guidance Notes for preparing costs budgets state that the Pre-action phase should not include any incurred work relating to other phases of the budget. For example, if work is done in relation to witness statements pre-proceedings, that should go in the Witness Statements phase under “Incurred” costs, not in the Pre-Action phase. This is not an issue with costs budgeting as recording work under any particular phase does not trigger any payment. However, how does this work with the Jackson grid? In any case that settles pre-action in a claimant’s favour there will have been some negotiations, even if only a single offer and acceptance. Does this therefore trigger an entitlement to the whole Negotiations/ADR fixed fee in addition to the Pre-action fee? If so, why bother with a separate phase for Negotiations/ADR if it will always be triggered? Similar issues apply to phases such as Expert Reports or Witness Statements where some work may have been done pre-action. The second problem, which does not appear to solve the first, is the proposed rule that: “The fixed cost is payable only if a work stage...

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Important lessons to learn

By on Feb 15, 2016 | 6 comments

Last Monday I attended a detailed assessment hearing concerning a bill totalling £93,000. The last offer made by the paying party, based on my advice, was for £27,500. The bill was assessed at £69,000. This proves what a terrible costs lawyer I am and how wholly unrealistic the offers are I put forward. My opponent was junior costs counsel. This case also proves it is a mug’s game to instruct a costs lawyer to undertake advocacy when much better results would have been secured if my client had instructed costs counsel instead of me. On Friday I attended another detailed assessment hearing concerning a bill totalling £383,000. The last offer made by the paying party, based on my advice, was for £175,000. The bill was assessed at £155,000. This proves what a brilliant costs lawyer I am, if, perhaps, rather overly cautious, and thus overly generous, when formulating offers. My opponent was a top costs QC whose brief fee was over six time what I charged my client. This case also proves that my advocacy skills are up there with the top QCs and that instructing specialist costs counsel, rather than a costs lawyer, is a grotesque waste of money. Monday’s case was before a Deputy District Judge whereas Friday’s case was before a Regional Costs Judge, which may or may not prove anything. What both cases do prove is the spectacular unpredictability of the assessment process and the difficultly in trying to advise a...

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Predictions for 2016

By on Feb 5, 2016 | 6 comments

Costs Lawyer magazine recently published the predictions for 2016 of the great and the good in the profession. They also asked me. This was my contribution, written before Lord Justice Jackson’s latest speech: “When I was asked this question last year, my prediction was that 2015 would be the year guidance would be given by the Court of Appeal on the new proportionality test.  However, at the time of writing, we still have nothing from the High Court or above as to how proportionality is to be applied as part of the detailed assessment process.  I was clearly wrong in my timings and can only hope we have something in 2016.  I also repeat my previous prediction that what will ultimately emerge will be a fiasco and nothing close to what Lord Justice Jackson envisaged. I also predicted that there would be calls for a massive extension of fixed fees as a consequence of the mess being made of Jackson implementation.  Such calls have indeed been made (with proposals for fixed fees in clinical negligence cases and noise induced hearing loss cases amongst other things).  Expect much more of the same in 2016. This will be the year where the judiciary finally properly grasps the fundamentals of costs budgeting with sensible and consistent decisions being made at all levels.  Resistance to costs budgeting will be overcome and all legal practitioners will acknowledge budgeting to be a useful tool to control disproportionate costs. ...

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Signature to a Bill of Costs

By on Feb 3, 2016 | 9 comments

In Mansion Estates Ltd -v- Hayre & Co (A Firm) [2016] EWHC 96 (Ch) His Honour Judge Saffman commented: “in my view it would be wrong to assume that it is inherently more improbable that a professional person will be dishonest than anyone else. If ever such a view validly had traction, I do not think it can do so in the modern world.” Although not a decision relating to costs, this must have equal applicability to the signature of accuracy to a bill of costs. There may once have been a stage when “the Court can (and should unless there is evidence to the contrary) assume that his signature to the bill of costs shows that the indemnity principle has not been offended” (Bailey v IBC Vehicles Ltd [1998] EWCA Civ 566) but the world has now moved on from such innocent...

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Jackson is dead. Long live Jackson.

By on Feb 1, 2016 | 8 comments

Lord Justice Jackson has repeated his calls for an extension of fixed costs, this time with a recommendation it should apply to all claims with a value up to £250,000 and also produced a proposed matrix of the fixed costs that should be payable. One of the reasons advanced in favour of an extension of fixed costs is: “My impression is that the profession is now more willing to accept fixed costs than it was in the past. This is for two main reasons. First, such a regime would dispense with the need for costs budgeting, which not everyone enjoys.” It is not entirely clear whether the irony is lost on Jackson LJ of justifying fixed fees as a way to avoid unpopular costs budgeting when costs budgeting one of the key Jackson reforms. The ultimate irony is where this suggestion leaves the bulk of the Jackson reforms. Those reforms introduced a number of controversial measures (eg an end to recoverability of additional liabilities, Qualified One-Way Costs Shifting) and convoluted measures (eg costs budgeting, Qualified One-Way Costs Shifting (again)), in a report running to 557 pages, in an attempt to achieve proportionality (all at considerable disruption to lawyers and the courts in the implementation). A massive extension of fixed fees would make the majority of the Jackson reforms entirely redundant for the majority of cases (no costs budgeting, costs management, provisional assessment, new bill of costs, etc). Fixed fees across the board was always an easier (if not necessarily better) way to ensure proportionality than the bulk of the previous reforms already introduced. Jackson LJ recommends that, at least initially, fixed fees are introduced for all claims up to £250,000: “The first question is whether we should be fixing costs for all civil cases (like Germany and New Zealand) or just for the fast track and the lower reaches of the multi-track. This is a policy decision for others. I would favour the latter course (as recommended in my Final Report), but I acknowledge that some favour the former course. There are two particular reasons why I favour adopting the latter course: (i) Switching to a totally fixed costs regime for all claims, however large, would be too great...

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Fixed costs uncertainty

By on Jan 25, 2016 | 2 comments

I previously mentioned that the conflict in decisions as to whether fixed costs apply where costs are payable on the indemnity basis, when a claimant succeeds on a Part 36 offer, was due to be resolved by the Court of Appeal in February. Kerry Underwood’s blog now reports that this case has settled. We are therefore left in the dark as to when fixed costs do or do not apply. Hopefully this is a matter the rules committee will address as a matter of urgency. Given the benefit of certainty and the avoidance of further satellite litigation are lost if fixed costs do not apply, surely the answer would be to continue to apply fixed costs but with an uplift, say 10%, on the amount. This leaves all the benefits of fixed costs but with a costs incentive retained to the claimant to make a good Part...

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