Maximising Recovery: Payments and Dual Attendances

We continue to see assessments returned from the Court where payments have been reduced to 3 minutes at a Grade D hourly rate. Furthermore, we continuously see time claimed for attendances of two fee earners reduced to just one, as they see this as duplicative work. All of this has an impact on the recovery of your costs in Court of Protection cases.

The OPG Costs Guidance states, “three minutes will usually only be allowed in respect of paying bills by electronic transfer, cheque or enclosure letter” and “a three-minute unit is usually allowed for very short straightforward letters, emails or duplicative letters”. Where there are two fee earners, the OPG Costs Guidance states “The SCCO allows the cost of one fee earner to visit in all except the most exceptional cases.”

Background and Case Law

The matter of Leighanne Radcliffe, before Master O’Hare, dealt with arguments on routine payments. The Bill of Costs submitted was in relation to General Management costs for the period 14 August 2002 to 13 August 2003. The Provisional Assessment was not accepted and the matter proceeded to a formal Detailed Assessment. Thereafter, permission to Appeal was granted. 

The Appeal was heard before Master O’Hare and gave guidance on invoices and payments. He allowed 3 minutes per letter as reasonable, explaining that where there is a high volume of bill paying letters, it is not appropriate to allow 6 minute payments to each.

The letters were payments for utility bills and Master O’Hare further stated “in making that allowance I would disallow the extra time for generally “looking after the matter”.

This case also serves to reiterate the decision made by Master O’Hare in the Jamie Walker case in terms of 3-minute charges for routine cover letters. It is noted that time spent checking an invoice, arranging payment and preparing the cover letter/cheque is non-fee earner work and therefore a minimal 3 minutes is allowed for the whole process.

The case of Garylee Grimsley (1998) deals with the arguments of time claimed for two fee earners in attendances. Master O’Hare referred to R -v- Legal Aid Board Ex Parte Bruce (1991). He stated that:

“Solicitors are not to be expected to carry knowledge of all the law in their heads… if the problem is outside the scope of their experience they will wish to discuss it with others who are more qualified… But knowledge of the law, however acquired or recalled, is their stock in trade… In so far as expense is involved in adding to this stock in trade, it is an overhead expense and not something that can be charged to the client”

Recommendations

Always expect time claimed for payments to be reduced to 3 minutes at a Grade D rate. In order to maximise recovery, we advise to delegate this work to a lower grade fee earner and agree with your instructed Costs Draftsman to include 3 minute payments within the bill.

In respect of two fee earner attendances, only claim the highest fee earner at an attendance. If you feel there are exceptional circumstances, fully explain these in the attendance note in order for the Costs Draftsman to include this in the Bill of Costs. Again, referring to the OPG guidance the SCCO will only allow these in exceptional cases. However, there is no guidance on what is deemed as an exceptional case.

Brian Ferry is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact him at Brian.Ferry@clarionsolicitors.com and 07741 663809 or the Clarion Costs Team on 0113 246 0622.

The latest Precedent H guidance notes

The precedent H guidance notes have never aligned with the precedent S guidance notes (Phases and Tasks Reference and Lookup table in Precedent S (bill of costs)) until the update to the precedent H guidance notes which was made last month, this update has addressed some of those discrepancies.

Please find below the amendments that have been made to the guidance notes:

Pre-action: The precedent H guidance notes states that settlement discussions, advising on settlement and Part 36 offers before proceedings were issued are to be included in the Preaction phase. However, in the Precedent S guidance these discussions are included in the ADR/Settlement phase (task “Other Settlement Matters”) . The precedent H guidance notes must be followed therefore any preaction settlement discussions should be included in the preaction phase. 

Issue/statements of case: The precedent H guidance notes have been amended to include “amendments to statements of case” in this phase, the previous guidance stated that these should be excluded from this phase. This amendment has resulted in alignment with the Precedent S guidance. 

CMC: The precedent H guidance notes have been amended to include any further CMCs that have been built into the proposed directions order whereas previously the notes stated that any additional CMCs were not to be included in this phase. The position remains regarding any estimated CMCs that have not been proposed in the directions order, these are to be included as a contingent cost. Any disclosure work, i.e. list of disclosure issues, EDQ  should be included in the disclosure phase.  

Budget – The costs in relation to this phase includes inconsistencies which present numerous difficulties. The Precedent H Guidance Notes includes “correspondence with opponent to agree directions and budgets, where possible”, and “preparation for, and attendance at, the CMC”. The same applies in relation to the PTR phase, which includes “preparation of updated costs budgets and reviewing opponent’s budget”, “correspondence with opponent to agree directions and costs budgets, if possible” and “preparation for and attendance at the PTR”. While the precedent H guidance note specifically excludes preparation of the costs budget for the first CMC, it doesn’t specifically exclude preparation of Precedent R. The Precedent S description of this task is “work on budgeting between the parties following initial completion of the first budget, including the monitoring of costs incurred against the budget and any applications for variation of the budget” –  it doesn’t mention the drafting of Precedent R and seems to relate to work post CMC.

Furthermore, in para 7.2 of PD3E the 2% cap relates to all recoverable costs of the budgeting and costs management process other than the recoverable costs of initially completing the Precedent H. If some costs budgeting items are included in the CMC and PTR phases (i.e. following the Precedent H Guidance Note), practically how is the 2% figure on the front page of Precedent H calculated? Should it include the budgeting items which appear in the CMC and PTR phases of Precedent H, or is it exclusive of them? And, what exactly is meant by “budget process” in relation to this 2% cap?

Unfortunately there is no guidance regarding the budget process or “associated material” that is referred to in the guidance notes – does this include composite summaries, breakdowns of costs?

One solution for this phase is to time record in line with the precedent S guidance notes and then when it comes to preparing the budget assess what aspects of the % cap belongs in the CCMC stage. If the time is recorded as CCMC it is a more onerous task to ascertain what element of the CCMC phase is relevant to the % cap.

Trial: The guidance note has been amended to now include counsel’s brief fee in the trial preparation phase rather than the trial phase. 

Settlement phase: The precedent H guidance note previously excluded mediation from this phase, this has now been amended to include mediation. 

Definition of budgeted and incurred costs – CPR 3.15 and PD 3E para 7.4 Incurred costs are now all costs incurred up to and including the date of the first costs management order, unless otherwise ordered. Budgeted costs are all costs to be incurred after the date of the first costs management order.

Sue Fox is a Senior Associate and the Head of Costs Management in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact her at sue.fox@clarionsolicitors.com and 0113 336 3389, or the Clarion Costs Team on 0113 246 0622.

 

 

 

 

Revising Precedent H Costs Budgets – Don’t delay

Revising Precedent H Costs Budgets

Don’t delay in applying to revise your Costs Budget if a significant development has occurred in your litigation, and on those occasions where there may have been a delay don’t shy away from applying.

It is not left to a party to choose whether to revise its budget and to take its chances on a detailed assessment, parties must apply to revise their budget if there has been a significant development in the litigation – Sharp -v- Blank & Ors [2017] EWHC 3390 (Ch) (21 December 2017) (hereafter Sharp).

In the event that there has been a significant development in the litigation, parties are not able to defer the determination of additional incurred costs to detailed assessment – those incurred costs form part of the request for additional costs:

Master Marsh “I do not consider the rules and practice direction intended that only certain elements of the costs relating to significant developments must be dealt with as revisions with the other elements, those pre-dating the hearing or, on another view those pre-dating the application, being dealt with on a detailed assessment. This approach would run contrary to the purposes of costs management and lead to unnecessary fragmentation of the costs dealt with at a detailed assessment.

Master Marsh found that the costs incurred from the costs management order and up to the application to revise the Cost Budget were not incurred costs for the purpose of the revision, they were future costs. Master Marsh focussed on the language of the CPR referring to the choice of the use of “future” rather than “budgeted costs”, as follows:

The language used in paragraph 7.6 is of critical importance because it provides the jurisdiction, on the defendants’ case to make the revisions they seek. It is notable that the language is at variance with the remainder of the rules and PD3E. It refers throughout to the revision of a “budget” (not, in accordance with the new wording, “budgeted costs”). It is explicit, however, that revision is in respect of future costs. The final sentence of this paragraph gives the court a discretion to approve, vary or disapprove the revisions “… having regard to any significant developments which have occurred since the date when the previous budget was approved or agreed”. On one view, such language points towards the last approved or agreed budget being the jumping off point for a revision because it is the budget that is being revised”.

Master Marsh concluded that the “Costs which have been incurred since the date of the last agreed or approved budget (or the antecedent date) that relate to significant developments are, for the purposes of revision, placed in the estimated columns of the revised Precedent H in one or more phase. In some cases, it may not be obvious where they go (for example a late application for security for costs) but I can see no reason why Precedent H may not be adapted as necessary to accommodate work that does not easily fit in”.

He also considered that there would be a degree of retrospectivity if the costs management regime was to work.

It is essential that you apply to revise your Costs Budget if a significant development has occurred in your litigation, to not do so puts you at risk of not being able to recover any costs that are in excess of your budget.

Sue Fox is a Senior Associate and the Head of Costs Management in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact her at sue.fox@clarionsolicitors.com and 0113 336 3389, or the Clarion Costs Team on 0113 246 0622.

 

 

Electronic Filing – Court of Protection Cases

As of today, the pilot begins for voluntary electronic filing at the Senior Courts Costs Office. To request an assessment, the bill of costs, the N258B and the authority to assess are to be forwarded through e-filing. The papers are to be sent as normal in the post/DX for the current time. This process becomes mandatory on 20 January 2020.

This is a big change in costs and particularly regarding COP costs, whereby it was expected that electronic filing would not apply. We have had confirmation from the SCCO that this does apply to COP cases and we recommend that all practitioners begin doing this going forward before the process becomes mandatory.

 The portal link can be found here: https://efile.cefile-app.com/login

 Information about existing FAQ’s following the E-Filing in other Courts can be found here: https://leedslawsociety.org.uk/wp-content/uploads/2019/04/E-Filing-Frequently-Asked-Questions.pdf

The link to the government website regarding CE-Filing which includes step by step guides can be found here: https://www.gov.uk/guidance/ce-file-system-information-and-support-advice

 If you have any queries, please contact Stephanie Kaye on 0113 336 3402 or stephanie.kaye@clarionsolicitors.com

 

 

A Complete Chronological guide to budgeting case law

There are many case authorities in relation to budgeting since the process was implemented, it is hard to keep track of them all. Here is a complete list of cases.

 

2014

Appeals

Havenga -v- Gateshead NHS Foundation Trust [2014] EWHC B25(QB)

General guidance

A & B (Court of Protection: Delay & Costs) [2014] EWCOP 8)

Hegglin -v- Persons Unknown & Google Inc [2014] EWHC 3793 (QB)

Thomas Pink Ltd -v-Victoria’s Secret UK Limited [2014]

Yeo-v-Times Newspapers Ltd  [2014] EWHC 2853 (QB)

 

2015

General guidance

BP -v- Cardiff & Vale University Local Health Board [2015] EWHC B13 (Costs)

(GSK Project Management Ltd -v- QPR Holdings Ltd [2015] EWHC 2274 (TCC)

Stocker -v- Stocker [2015] EWHC 1634 (QB))

Tim Yeo MP -v- Times Newspapers Limited [2015] EWHC 209 (QB))

Various Claimants -v- Sir Robert McAlpine & others [2015] EWHC 3543 (QB)

Judicial guidance cases

GSK Project Management Ltd -v- QPR Holdings Ltd [2015] EWHC 2274 (TCC)

Tim Yeo MP -v- Times Newspapers Limited [2015] EWHC 209 (QB)

Late filing of a budget

Simpson -v- MGN Limited [2015] EWHC 126 (QB)

Overspending on the budget

CIP Properties (AIPT) Limited -v- Galliford Try Infrastructure Ltd [2015] EWHC 481 (TCC)

Excelerate Technology Ltd -v- Cumberbatch [2015] EWHC B1 Mercantile)

Parish -v- The Danwood Group Ltd [2015] EWHC 940(QB)

Simpson -v- MGN Limited [2015] EWHC 126 (QB)

Proportionality in budgeting

(BP -v- Cardiff & Vale University Local Health Board [2015] EWHC B13 (Costs)

Various Claimants -v- Sir Robert McAlpine & others [2015] EWHC 3543 (QB)

 

2016

General guidance

Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Campbell -v- Campbell [2016] EWHC 2237 (Ch)

Group Seven Limited -v- Nasir [2016] EWHC 629 (Ch)

Merrix -v- Heart of England NHS Foundation Trust [2016] EWHC B28 (QB)

Signia Wealth Limited -v- Marlborough Trust Company Limited [2016] EWHC 2141 (Ch) –

Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Late filing of a budget

Jamadar -v- Bradford Teaching Hospitals NHS Trust [2016] EWCA Civ 1001

Murray -v-BAE Systems PLC (Liverpool County Court, 1st April 2016)

Outcome of budgets and costs of assessment

Sony Communications International AB -v- SSH Communications Security Corporation [2016] EWHC 2985 (Pat)

Proportionality in budgeting

(Considers Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Group Seven Limited -v- Nasir [2016] EWHC 629 (Ch)

Revising the budget

Warner -v- The Pennine Acute Hospital NHS Trust (Manchester County Court 23rd September 2016)

The budgeting procedure

Agents’ Mutual Limited -v- Gascoigne Halman [2016] CAT 21

Merrix -v- Heart of England NHS Foundation Trust [2016] EWHC B28 (QB)

 

2017

Departing from the budget on detailed assessment

RNB v London Borough of Newham [2017] EWHC B15 (Costs)

General guidance

Harrison -v- University Hospitals Coventry & Warwickshire Hospital NHS Trust [2017]  EWCA Civ 792

MacInnes -v- Gross [2017] EWHC 127 (QB)

Napp Pharmaceutical Holdings Ltd v Dr Reddy’s Laboratories (UK) Ltd & Ors [2017] EWHC 1433 (Pat)

Judicial Guidance cases

Findcharm Ltd -v- Churchill Group Ltd [2017] EWHC 1109 (TCC)

Woodburn v Thomas (Costs budgeting) [2017] EWHC B16 (Costs)

Late filing of a budget

Asghar -v- Bhatti [ 2017] EWHC 1702 (QB)

Mott & Anor v Long & Anor [2017] EWHC 2130 (TCC)

Outcome of budgets and costs of assessment

Harrison -v- University Hospitals Coventry & Warwickshire Hospital NHS Trust [2017] EWCA Civ 792)

Merrix -v- Heart of England NHS Foundation Trust [2017] EWHC 346 (QB)

Part 36 in budgeting

Car Giant Limited -v- the Mayor and Burgesses of the London Borough of Hammersmith [2017] EWHC 197 (TCC)

Proportionality in budgeting

Rezek-Clarke -v- Moorfields Eye Hospital NHS Foundation Trust [2017] EWHC B5 (Costs)

Revising the budget

Asghar -v- Bhatti [2017] EWHC 1702 (QB)

Sharp v Blank & Ors [2017] EWHC 3390 (Ch)

Sir Cliff Richard OBE -v- The BBC & Chief Constable of South Yorkshire Police [2017] EWHC 1666

 

2018

Departing from the budget on detailed assessment

Jallow v Ministry of Defence [2018] EWHC B7 (Costs)

Nash v Ministry of Defence [2018] EWHC B4 (Costs)

General guidance

Yirenki v Ministry of Defence, [2018] 5 Costs LR 1177

 

 

The court ratified past and future gifts from P’s estate according to the Official Solicitor’s submissions

In FL v MJL (By His Litigation Friend, the Official Solicitor) [2019] EWCOP 31, an application was made to the Court of Protection to ratify gifts that had been previously made on MJL’s behalf, and also for authority to make prospective gifts on MJL’s behalf. MJL’s brother, FL, was appointed as Deputy pursuant to the Orders dated 21 July 2008 and 23 January 2012. The Official Solicitor acted as MJL’s Litigation Friend in the proceedings.

MJL is unmarried and has no children, and also has four siblings, who each have their own children. His estate was valued in excess of £17 million. MJL receives care funding from the NHS, and as a result has an annual surplus of over £100,000.00.

A Statutory Will was executed in 2010, in which FL and RL, MJL’s siblings, were appointed as executors. The estate was to be divided up as follows; 60% split equally between MJL’s siblings, with the remainder of the estate to be divided equally between several organisations, including Oxfam, Amnesty International, and War on Want.

FL, the Applicant, made an application to the Court authorising the retrospective authorisation of previous gifts made by FL as Deputy, including Christmas gifts to MJL’s siblings, as well as gifts to the Labour Party, The Red Banner, and Charter 88, continuing the standing orders set up by MJL when had capacity. FL also requested authority to make gifts in the future to the taxable and charitable beneficiaries under MJL’s will, however the Official Solicitor did not agree with the proposals.

The Official Solicitor instead proposed that a gift of £1,184,387.00 be made from MJL’s estate, to be split equally between the siblings and the charitable beneficiaries in the ratio agreed in the Statutory Will (60% between the siblings, and 40% to the charities). They also proposed that gifts be made in the future from MJL’s surplus income in the same proportions as above. It was believed that the gifts would be beneficial to MJL in respect of reducing inheritance tax.

It was agreed between the parties that MJL could afford to make the proposed gifts. The Judge agreed with the proposals made by the Official Solicitor, and also noted that the standing orders set up by MJL when he had capacity should continue and were in MJL’s best interests.

Yirenki v Ministry of Defence [2018] 11 WLUK 53 – Are hourly rates a good reason to depart from the budget?

When budgeting cases, the Civil Procedures Rules (CPR) under Practice Direction (PD) 3E para.7.3 provides that, when the Court is approving figures, the approval should “only relate to the total figures for budgeted costs of each phase”.

In this claim, upon costs management, the Judge approved both a number of hours for each phase, as well as individual disbursements in the budget. This approach is clearly contrary to the CPR. Parties often reserve the position in relation to their incurred costs, and the hourly rates on the incurred costs, to be dealt with at detailed assessment. Interestingly, Master Davison reserved the issue of the hourly rates for the future costs to also be dealt with at detailed assessment.

Reduction to the hourly rates

Now, we know from the case of Jallow v Ministry of Defence [2018] EWHC B7 (Costs) that, where there has been a reduction to the hourly rates for the incurred work, this is not a good reason to depart from the budgeted costs. Master Davison clearly differs in his opinion, given that he has reserved the position of the hourly rates specifically for the estimated costs.

This decision has since been appealed and has, not surprisingly, been allowed. It was said by Mr Justice Jacobs QC that the approach of Master Davison was contrary to the CPR. Relying on rule CPR 3.15(2)(b) specifically, he provided that the correct approach is clearly that the approved figure is meant to be a final figure, rather than a provisional one which the other side could later attempt to reduce.

Mr Justice Jacobs QC advised that the cost budgeting process is not meant to be a detailed assessment in advance and that the job of the Court is to approve a proportionate figure which can be relied on. The principle of reserving the position as to the hourly rates of the budgeted figures weakens the reliance that can be placed on the budget itself, supporting the case of Jallow v Ministry of Defence  [2018] EWHC B7 (Costs), in that hourly rates are not a good reason to depart from the budgeted figures.