Fixed fees – is LJ Jackson moving too quickly?

On 28 January 2016 LJ Jackson is due to speak on the issue of fixed fees within the legal profession. It is widely predicted that he will recommend an extension of fixed fees for ‘low end’ multi track disputes.

In my opinion, LJ Jackson is of the view that legal costs disputes should be preserved for high value claims, so that the cost of a legal dispute and the cost of detailed assessment proceedings are always proportionate to the cost of the claim. Furthermore, it is fair to say that costs management has not been embraced by the profession and this is probably another reason why LJ Jackson is likely to recommend further fixed fees.

Whilst everyone in the profession has found costs management challenging, any new rule change or procedure will always create difficulties. Costs management has officially now been with us since 1 April 2013, and I think that more time should be provided to smooth out some of the problems. I say this because I am starting to see the benefit of costs management in some of the claims for costs that I have dealt with recently.  For example, we were recently instructed on a clinical negligence matter and prepared a Bill of Costs.  We prepared the Bill of Costs in phases and provided precedent Q when detailed assessment proceedings were commenced.  The Bill of Costs came in under budget or on budget for each phase.  We received a telephone call within 14 days of service of the bill where an offer equating to 95% of the Bill of Costs was made.  That offer was accepted the same day and our client received payment within 14 days.  This is a perfect example of how costs management can bring significant benefits to a successful Claimant/Receiving Party.

Another example is on a high value personal injury claim where the Claimant/Receiving Party came in within budget for each phase, save for one phase. Points of Dispute were prepared and at the same time the Paying Party served a strong Part 36 offer. I responded with a counter offer and the matter settled shortly thereafter. The costs of the detailed assessment proceedings were minimal.

In both of these examples, the paying parties received the bills of costs and knew that if they proceeded to detailed assessment they would struggle to reduce the bills by any sensible sum and therefore made very strong opening offers. Strong opening offers from paying parties in the past were unheard of but now we might start to see a new culture from paying parties. If the bill is largely in line with the budget then settlement should in theory become quite easily achievable and the costs of detailed assessment proceedings will largely be avoided.

In both examples, the Paying Parties made very strong opening offers of settlement because the costs claimed were broadly in line with the costs management orders. The Paying Parties had been advised what they were likely to pay (the costs management orders) and given that both bills of costs were broadly in line with the costs management orders it resulted in swift settlements. This is evidence that costs management can work!

it may be that maybe costs management is starting to settle down and the benefits are starting to show. If costs management is starting to work then, the costs of detailed assessment proceedings will begin to decrease significantly.

 I do hope that LJ Jackson stumbles across my blog and takes my thoughts into consideration, but maybe I am being slightly optimistic!

This blog was written by Andrew McAulay, who is a Costs Lawyer and Partner in the Costs and Litigation funding team at Clarion. Andrew can be contacted on 0113 336 3334 or at andrew.mcaulay@clarionsolicitors.com.

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