Tag: Civil Costs

Be costs ready at trial if your claim is being heard in the SHORTER AND FLEXIBLE TRIALS SCHEMES

Andrew McAulayLeave a comment

In the 100th update to the CPR, PRACTICE DIRECTION 57AB for SHORTER AND FLEXIBLE TRIALS SCHEMES has been published and is implemented from 1 October 2018. This Practice Direction supplements CPR Part 57A.

A claim in the Shorter Trials Scheme may be started in any of the Business and Property Courts.

Costs are to be assessed by way of summary assessment, save in exceptional circumstances. Furthermore, the court can order, or parties can agree that costs management applies and if a costs management order is made costs will be summarily assessed on a phase by phase basis.

Costs

2.56 – CPR 3.12 shall not apply to cases in the Shorter Trials Scheme, unless the parties otherwise agree. If at the outset of the proceedings the parties agree that Costs Management should apply, they should seek an order to that effect at the CMC and apply for directions as to when budgets should be subsequently exchanged, discussed and submitted for the court’s approval.

2.57 – Within 21 days of the conclusion of the trial, or within such other period as may be ordered by the court, the parties shall each file and simultaneously exchange schedules of their costs incurred in the proceedings.

2.58 – Such schedules should contain sufficient detail of the costs incurred in relation to each applicable phase identified by Precedent H to the Costs Budgeting regime to enable the trial judge to be in a position to make a summary assessment thereof following judgment.

2.59 Save in exceptional circumstances—

(a) the court will make a summary assessment of the costs of the party in whose favour any order for costs is made; (b) rules 44.2(8), 44.7(1)(b) and Part 47 do not apply.

You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com

Points of Dispute and Replies: The Dos and Donts

Laura SugarmanLeave a comment

CPR 47 provides that Points of Dispute and Replies should follow “as closely as possible” the format of Precedent G. CPR 47.9 allows for the paying party to raise disputes to points in the Bill of Costs drafted by the receiving party.

Points of Dispute ‘must be short and to the point’; parties are expected to make their point in a succinct and concise way. In the recent case of Mead v British Airways PLC, the Defendant spent over seven pages setting out one point of dispute. The claimant’s reply was two pages. District Judge Moss accepted the Claimant’s position and the point was dismissed. This is a clear example that a point can be raised and dealt with concisely without the need for disproportionate and lengthy argument. Indeed, in our experience less is often more and judges can be put off and confused by excessive Points of Dispute or Replies. It is not uncommon to see assessing judges commenting to the effect that Points of Dispute were too long and whilst this may not directly affect the outcome, it may well make the judge less well-disposed to a party in the assessment.

Practitioners tempted to set out Points of Dispute or Reply at great length should bear in mind the cautionary tale of Mylward -v- Weldon [1595] EWHC Ch 1, in which the court held that the matters in dispute could have been set out in 16 pages, rather than the 120 page bundle which the claimant’s lawyer had filed. The court ordered that the claimant’s legal representative should be brought to court, and the warden “shall cut a whole in the myddest of the {bundle}, and put {the lawyer’s} head through the hole, so that it hangs about his shoulders; and then shall lead him bare headed and bare faced round about Westminster Hall whilst the Courts are sitting and shew him at the bar of every of the three Courts within the Hall, and shall then take him back again to the Fleet {prison} and keep him prisoner until he shall have paid £10 to Her Majesty for a fine, and 20 nobles to the defendant for his costs in respect of the aforesaid abuse”.

That said, it is imperative for parties to explaining the reasoning as to why they dispute an item in a Bill of Costs. It is not enough to merely state that an item is disputed; the reasons for the dispute must be disclosed. The onus is on the parties to find the correct balance of getting the point across and providing the required information to ensure the point/reply is agreed with by the DJ.

When filing Points and Replies, it is imperative all parties know the relevant dates they are required to adhere to. For context, when a formal Bill of Costs is served by the receiving party, with an N252 will be served. This gives the date for which Points of Dispute are required to be served, which in general is 21 clear days following the date of service. The paying party is permitted to request an extension of time for this, and it is at the discretion of the receiving party to grant or deny the same and there are consequences for failure to comply. Whilst the Rules state that replies to points of dispute must be filed within 21 days of receipt of the points of dispute, there is no sanction for failure to comply. Therefore there is less risk to a receiving party which serves its Replies out of time, however it is possible for the court to impose a sanction (though this is not automatic). CPR 47.13 stipulates that the receiving party may reply to the points of dispute and the receiving party may do so within 21 days. This was supported in Pipe v Electrothermal Engineering Limited where it was confirmed that the receiving party is not limited to 21 days to respond.

The main differences between the paying and receiving party are as follows: should the paying party fail to serve points of dispute within the 21 days, there could be cost implications and the receiving party would be permitted to apply to the court for a Default Costs Certificate, which is an order that the costs claimed by the receiving party be paid in full (effectively a Default Judgment in costs). Whilst it may be possible to apply to set a Default Costs Certificate aside, there is inevitably a risk that the application will not be granted and it is likely that there will be a costs sanction to the receiving party even if it is.

In summary, parties should always follow Precedent G; always ensure points and replies are short and to the point. When undertaking costs proceedings, always be aware of the deadlines and dates to adhere to ensure you are not subjecting your client to unnecessary costs.

The format of the precedent H budget and precedent R are working well, claims Mr Justice Birss

Joanne ChaseLeave a comment

At February’s Civil Procedure Rules Committee meeting Mr Justice Birss reported that “work was ongoing to make certain that the new bill costs, Precedent H and Precedent H Guidance are consistent and accurate and that N260 the summary costs statement follows the same format. The content of Precedent H itself would not be changing. The Chair added that in his experience having settled down, Precedent H and R are working very well“. Therefore no changes are expected to the precedent H budget or the precedent R budget discussion report, the remaining changes relate to the bill of costs and statements of costs.

The wholesale changes to costs that we have encountered over the last 5 years were made as a result of Sir Rupert Jackson’s report whereby he likened the current bill of costs to a “Victorian style account book” making it “relatively easy for a receiving party to disguise or even hide what has gone on”. His purpose was to create transparency and unison with time recording systems and costs related documents, hence the need for the new electronic bill of costs, which is the final piece of Jackson’s jigsaw.

If the legal profession were to embrace time recording as Jackson intended, i.e. recording time in phase, task and activity, then astonishingly some 5 years after the publication of his legendary reforms, Sir Rupert Jackson may achieve his aim. However, Sir Rupert narrowly missed having his vision fully formalised and embedded into the rules during his working lifetime, his retirement has pipped him to the post.  He can now sit back and watch from afar, how his intended co-ordinated approach to costs will work in reality!

You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com

PROPORTIONALITY HITS FAMILY LAW

Andrew McAulay1 Comment

I have previously posted blogs on the topic of proportionality (Who needs fixed costs! and Proportionality continues to get tougher) and made the comment that it would be interesting to see how the area and application of proportionality develops.

Recently we have seen proportionality develop in the area of Family Law.  In the case of Kay v Kay [2016] EWHC 2002 (Fam) the successful party’s claim for costs was reduced on Summary Assessment from £33,813.00 to £3,737.50.  This was a reduction of approximately 89%.

The Summary Assessment was carried out by Mr Justice Macdonald and he felt that the claim for costs was unreasonable and excessive taking into account the circumstances of the case.  He said the following; “it is remarkable that such a significant sum of money has been spent by these two parents arguing over a single question the answer to which was indisputable from the outset.  The costs incurred in this case were disproportionate to the single issue at hand”.

During the Summary Assessment the Judge reduced items heavily such as hourly rates, attendances upon the client and work done on documents. Interestingly, no schedule (breakdown of time) was attached to the Statement of Costs in relation to the documents work. This no doubt contributed to the significant costs reduction.

The Judge conducted the Summary Assessment by assessing the claims within the statement of costs on a summary basis, which brought the figure of £3,737.50.  What he did not appear to do was assess the costs and then stand back and reduce the costs to what he thought was a proportionate amount.  Clearly, in this case the Judge must have felt comfortable with the ‘end’ amount or when he conducted the summary assessment he applied the tests of reasonableness and proportionality at the same time.  In the cases of Who needs fixed costs! and Proportionality continues to get tougher (both detailed assessments and not summary assessments) both Judges determined what was reasonable and then ‘sat back’ and reduced the claims for costs to what they deemed were proportionate amounts. This is the approach that LJ Jackson set out in his final report at Part 1, chapter 3, paragraph 5.13:

In other words, I propose that 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 the total figure is proportionate. If the total figure is not proportionate, the court should make an appropriate reduction. There is already a precedent for this approach in relation to the assessment of legal aid costs in criminal proceedings: see R v Supreme Court Taxing Office ex p John Singh and Co [1997] 1 Costs LR 49.

The case demonstrates that the new test of proportionality is not just limited to the areas of Civil and Commercial Litigation, but equally applies to the area of Family Law.  Effectively, regardless of the area of law, where legal costs are to be assessed pursuant to CPR 44.3(2) then the new test of proportionality (the ‘Jackson’ test) applies.

Finally, this is another example of the Courts tackling disproportionate legal costs and demonstrates that the Court has the tools already to deal with disproportionate claims for costs and that fixed costs are not required.

This blog was prepared by Andrew McAulay who is a Partner at Clarion and the Head of the Costs and Litigation Funding department.   Andrew can be contacted at andrew.mcaulay@clarionsolicitors.com or on 0113 336 3334.

 

CFA Squabbles…………

Andrew McAulayLeave a comment

The case of Evans -v- Enterprise Group Holdings is an interesting and useful case to read in the context of ‘Bailey’ and costs claimed under a CFA post 1 November 2015.

Be warned it is a long Judgment! The key part to read is paragraph 53 a-f, where it sets out the procedure that should be adopted by Judge’s when faced with retainer validity questions.

If anyone has any recent experiences of the procedure adopted by the Court’s following retainer validity disputes, then please feel free to share them through this blog.

Andrew McAulay is a Costs Lawyer and Partner at Clarion. He is the Head of the Costs and Litigation Funding team. He can be contacted on 0113 336 3334 or at andrew.mcaulay@clarionsolicitors.com