The 83rd update to the CPR which will come into force on 6 April 2016 includes several changes which I have summarised in a previous blog Practical guide to the changes to the CPR – April 2016. However, I thought it would be helpful to identify the essential changes as follows:
Tag: clarion costs blog
Allowance of a Retrospective Success Fee
The case of Ghising v Secretary of State for the Home Department 2015 (Click here for the Judgment) is an interesting case to read in relation to retrospective success fees.Read More »
Practical guide to the forthcoming changes to CPR Part 3 – 83rd Update to the CPR
CPR Part 3 is being tidied up. There have been further amendments to CPR Part 3 and Practice Direction 3E, which will come into force on 6 April 2016.
Negotiate, negotiate, negotiate
The court has awarded costs against a party who has claimed unreasonable amounts in their budget. In the case of King & Anor v Thipthorp & Ors [2016] EWHC 3859 (COP) the court reduced areas of the budget due to unreasonable claims and disproportionate amounts. Although the budgets appeared overall not to be excessive, the budget was still reduced in relation to particular items. This is contrary to the intended approach of the court, which is to adopt a global approach when considering reasonableness. Furthermore the CPR is to be amended with regards to this global approach, confirming that hourly rates within budgets should not be set – here is a link to my previous blog regarding the yet to be implemented changes Least worse option.
The court ordered that the costs of the challenge could be recovered by the party objecting to those items.
Negotiations are key to successful costs management, avoiding the litigation risk associated with any hearing is certainly beneficial. Furthermore, in view of the amendments to be made to the CPR regarding parties having to file “an agreed budget discussion report which sets out the agreed and disputed areas for each phase and a brief summary of the grounds of dispute schedules of agreed/disputed areas with the budgets”, negotiations have never been so important.
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Clarion Costs January 2016 Newsletter
Clarion have launched their first newsletter for January 2016, following the success of their Christmas Newsletter and the “12 Tweets of Christmas”. Please click on the link below.
Clarion Costs January 2016 Newsletter
The expense of foreign witnesses attending trial
Kimathi -v- Foreign and Commonwealth Office
This is an interesting case which has an impact on both bills and budgets. There have been discussions in the past about whether witnesses could perhaps, in this technological era, attend court via video link rather than in person, thus avoiding the associated expenses of travel.
This case involved a dispute regarding whether certain Claimants were able to travel. It was held that those Claimants that were capable of travel to England should travel and attend at the trial. For those where there was a dispute regarding fitness levels and whether they could travel, it was held that they could give evidence by video link if they preferred. Finally those witnesses that simply didn’t want to travel and were medically fit to travel, they should travel to England.
This case has quashed the video link argument, it can assist with any counter arguments against any issues raised regarding the expenses associated with foreign witnesses travelling to attend court. Furthermore, foreign travel should ALWAYS be included in budgets and arguments should be raised to justify the same at any CMC, particularly reliance on the above case.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com
The CPRC least worst option! How to resolve the position regarding negotiating budgets
Negotiations
The Civil Procedure Rules Committee has amended the rules to include a new rule 3.13(2), in the event that a party files and exchanges a budget, all other parties will have to file an agreed budget discussion report which set out the agreed and disputed areas for each phase and a brief summary of the grounds of dispute – something many courts have been ordering for some time. The CPRC have described this as their “least worst option”!
The debate over hourly rates!
The Practice Direction is to be amended regarding hourly rates, it is confirmed that they will not be set and puts an end to this much debated area – “The making of a costs management order under part 3.15 concerns the totals allowed for each phase of the budget. It is not the role of the court in the cost management hearing to fix or approve the hourly rates claimed in the budget. The underlying detail in the budget for each phase used by the party to calculate the totals claimed is provided for reference purposes only to assist the court in fixing a budget.”
That said, consideration will have to be given to the hourly rate, how can the claim be quantified without an hourly rate? I agree with not setting the hourly rate and when I negotiate I don’t agree to the setting of the hourly rate, however, I may agree to the hourly rate for quantification purposes. My aim is not to have the rate set for the purposes of detailed assessment, unless of course there is no reason for the hourly rate to be disputed.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com
Five Gold Rings!
I have been preparing budgets for over 5 years, during the pilot scheme and onwards. I have prepared budgets in all areas of law and I have drafted well in excess of 1,000 budgets, so I would like to share with you my 5 Gold Rings!
- File your budget well in advance of the hearing, this allows parties to negotiate properly.
- Mutual exchange. Agreeing to mutually exchange the budgets may be beneficial, it may assist your case if neither party is aware of the opponent’s budget. This may help strategically and stop parties adapting their budget, following consideration of the opponent’s budget.
- Only include foreseeable contingent costs, the rules are clear regarding this. Do not include every eventuality, consider how you think your case will proceed and only include the relevant contingencies.
- Filing v service. This is a cute point. The court sanction only relates to failing to file rather than failing to serve. If you are experiencing a tight deadline then file your budget first rather than serve. Obviously I am not condoning a lackadaisical approach to service, however it is something to bear in mind if time is of the essence.
- The rules provide for downward revisions of budgets. This is a good point to remember. Defendants often consider budgeting to be a waste of time, simply a box ticking exercise, this is usually defendant insurers or defendants that will be subject to QOCS. However, if there are material changes to the case, then it may be appropriate to seek a revision downwards. This is a good tactic for the defendant because it may reduce their costs liability – so defendants, please do not ignore the budgets.
Should the courts be able to interfere with Costs Budgets which have been agreed between the parties?
The rules state that the court will ‘record the extent to which the budgets are agreed between the parties’. Many of us have experienced the court’s refusal to approve those negotiated budgets and have been infuriated with their insistence on interfering with the budget. LJ Jackson, in his draft report, initially wanted the court to be able to alter agreed budgets, however the final report included the provision that the court ‘will record the extent to which the budgets are agreed’.
Lawyers should proceed with caution when attending a CMC where the budgets have been agreed. The sensible approach would be to assume that, once the budget has been agreed, then the budget can be ignored. Alas, this is not the case! The courts are indeed interfering with the budgets, clearly parties are surprised by this approach. I would advise that parties continue to undertake some preparatory work regarding the budget, albeit not to the same extent as would have been required if the costs were contested.
An interesting technical point – if the budgets have been agreed, are they technically ever approved? Note the reference in the CPR to ‘record’ rather than ‘approve’. More to ‘chew the fat’ over some mince pies; or ‘mull over’ some mulled wine.
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Incurred Costs – Shifting Change
LJ Jackson has recognised there are problems surrounding incurred costs. As predicted by many, he is concerned that some parties will undertake as much work as possible before the case management conference, thereby putting large swathes of costs outside of the reach of costs budgeting. This tactic of “front loading” goes against the very essence of what costs budgeting stands for. LJ Jackson in his lecture earlier this year referred to incurred costs, stating that “a residual power to set a global figure for both incurred and future costs for any phase is to be introduced”.
His suggested solutions are sensible ones – (1) the court should have the power to comment on the incurred costs and to summarily assess those costs at the case management conference, if necessary; or alternatively (2) the court should be able to set a global figure for any phase, to include both incurred and future costs. This would be a welcome development in the task of controlling costs via the costs budgeting regime. The clear benefit to parties is that at the conclusion of the case where costs have fallen within limits of the budget, then parties may start to experience their costs being allowed in full, including the incurred costs. At present, when a party has actively managed their case effectively and efficiently, the incurred costs continue to be subject to either detailed assessment or summary assessment. LJ Jackson’s proposal would avoid this expensive and costly assessment process.
If this proposal was to be encompassed into any future revisions to the rules, then the parties to the litigation would begin to encounter some additional benefits. LJ Jackson has also suggested an introduction of pre-action costs management principally for clinical negligence costs. It appears there is a shift towards applying more focus to the issue of incurred costs in the future.
LJ Jackson’s proposal to change the position regarding incurred costs is one of the many steps needed to make costs management work.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com