Tag: clarion legal costs

Mis-Certification of a Bill of Costs – Be careful!

andrewmcaulayLeave a comment

Back in May, I posted a Vlog about the SRA’s decision following the Court of Appeal’s Judgment in Gempride v Bamrah [2018] EWCA Civ 1367. You can view that Vlog here.

I was therefore very interested to read the recent decision of Master James in the case of Farmer v The Chief Constable of Lancashire [2019] EWHC B18 (Costs) and to share it with you. Here are the key points:

  1. Mr Farmer (“the Receiving Party”) had the benefit of a costs order against the Defendant (“the Paying Party”).
  2. A Bill of Costs was prepared, and detailed assessment proceedings were commenced. The original Bill of Costs totalled £174,565.79.
  3. There were issues over the validity of Conditional Fee Agreements, recoverability of success fees and incorrect hourly rates which led to the service of an amended bill in the sum of £116,192.50.  That total was also incorrect, and the Court found that the bill should have been drawn in the region of £66,000 to £69,000.
  4. The Bill of Costs had been certified as accurate and true. Certain points/items were also maintained through Replies and a Witness Statement.
  5. Had the Bill of Costs been prepared correctly, then the matter would have been dealt with under the Provisional Assessment scheme. This would have saved substantial time and cost for each party and the Court.
  6. There were also costs included in the Bill of Costs which were not recoverable inter-partes.
  7. The Paying party applied to strike out the remainder of the Bill of Costs, pursuant to CPR 44.11.
  8. The Court struck out the remainder of the Bill of Costs; the Receiving Party was entitled to nothing.
  9. The Receiving Party was ordered to pay the costs of the detailed assessment and re-pay the payments on account received.

In Gempride the penalty reduction was 50%. In this case the penalty reduction was a full strike out of the remainder of the costs (circa. £66,000.00 – £69,000.00).

It is fundamentally important to ensure a Bill of Costs has been prepared correctly before you certify it. Mis-certification of a Bill of Costs is a serious issue.

Mistakes happen and the Court will look more favourably on innocent mistakes which are rectified quickly. In this case, the Receiving Party pursued the matter to detailed assessment and maintained retainers that were clearly not enforceable.  

In my Vlog in May, I provided 5 tips to help ensure that you avoid any mis-certification issues. Please view the Vlog to help you check a Bill of Costs (or a costs budget or statement of costs for summary assessment) correctly and to stay clear of any mis-certification arguments and costs penalties. You might want to use my 5 tips to create an internal check-list.

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

The Precedent T; a new Costs Management precedent, watch this space!

Sue FoxLeave a comment

The CPRC have released minutes of their latest meeting.  The committee has provided further information regarding the proposals and options relating to revisions to CPR r3.15 and PD 3E, please follow this link to see our previous update.

CPR r3.15 will be re-drafted stating that revisions to budgets are made promptly rather than the initial suggestion that revisions are made without delay. There will be further amendments to practice direction 3E with the introduction of a precedent T and accompanying rules in relation to the completion of the same. The precedent T will provide much needed structure regarding the process of revising budgets and we are expecting that it will outline how to revise budgets. The intention is that these updates will feature in the October 2020 update to the rules.

Please do not hesitate to give me a call or email if you have any queries regarding revising your budget or any other cost management requirements.  More detail regarding the importance of revising the budget can be found in our previous blog here. Remember that the rules provide for incurring 2% of your budget in respect to all cost management matters which includes monitoring and revising budgets.

Sue Fox is a Senior Associate and the Head of the Costs Management team 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.

COVID 19 update: face to face hearings

Sue FoxLeave a comment

HMCTS are consolidating the work of the courts and tribunals into fewer buildings. It has been announced that from Monday 30 March 2020 there will be a network of priority courts that will remain open during the coronavirus pandemic to make sure the justice system continues to operate effectively.

Fewer than half of all court and tribunal buildings will remain open for physical hearings, with 157 priority court and tribunal buildings remaining open for essential face-to-face hearings. This represents 42% of the 370 crown, magistrates, county and family courts and tribunals across England and Wales.

To help maintain a core justice system that is focused on the most essential cases there will be open courts, staffed courts and suspended courts.

The Judiciary recommend that you check which courts are open before you travel.  For information regarding the category of each court please follow this link.

Lord Chancellor Robert Buckland has said that it is vital that we keep our courts running. and that:

“An extraordinary amount of hard work has gone into keeping our justice system functioning. Technology is being used creatively to ensure that many cases can continue. Not everything can be dealt with remotely and so we need to maintain functioning courts.

These temporary adjustments to how we use the court estate will help ensure that we can continue to deal with work appropriately in all jurisdictions whilst safeguarding the well-being of all those who work in and visit the courts”.

Staffed courts will support video and telephone hearings and progress cases without hearings and ensure continued access to justice.

The remaining courts and tribunals will close temporarily and these measures will be kept in place for as long as necessary.

Sue Fox is a Senior Associate and the Head of the Costs Management team 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.

 

 

 

 

Third Party Funders – Exposure to Legal Costs

andrewmcaulayLeave a comment

The Court of Appeal has recently handed down its Judgment in the case of Chapelgate Credit Opportunity Master Fund Limited -v- Money and Others [2019], which was an eagerly awaited decision for litigation funders. The outcome of the case is as follows:

The Arkin Cap should be considered when determining costs, but it is not binding on the Courts.

Paragraph 38:

“……..I do not consider that the Arkin approach represents a binding rule. Judges, as it seems to me, retain a discretion and, depending on the facts, may consider it appropriate to take into account matters other than the extent of the funder’s funding and not to limit the funder’s liability to the amount of that funding”

For those unfamiliar with litigation funding and the Arkin Cap, this arises out of the Court of Appeal decision in Arkin -v- Borchard Lines Limited 2005. In that case, a company which had provided third party funding for an unsuccessful claim was ordered to pay the costs of the winning party, but only to the extent of the funding provided. The Arkin Cap has been a principle which has been regularly applied by the Courts since. The decision in Chapelgate will cause uncertainty for litigation funders, in a world which has significantly evolved since 2005.

The Judgment increases the requirement for litigation funders to properly engage costs lawyers. Funders should be engaging costs lawyers to scrutinise a law firm’s legal budget when they are applying for funding. Costs lawyers should also be retained to monitor costs versus budget (including the opponent’s costs) and to advise on costs management orders.

Costs management orders provide more certainty on detailed assessment (unless the order for costs is made on the indemnity basis). Such measures will ensure that the funder has the maximum control possible on both the costs of the firm they are funding and the opponent’s legal costs; the latter being important in the event that an adverse order for costs is made.


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

The latest Precedent H guidance notes

Sue FoxLeave a comment

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

Sue Fox2 Comments

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.

 

 

A PART 36 OFFER WHICH EXCLUDES INTEREST MAY BE VALID

Matthew RoseLeave a comment

A Part 36 offer in detailed assessment proceedings may be valid where it excludes interest under the Judgments Act 1838.

In Horne -v- Prescot (No.1) Ltd [2019] EWHC 1322 (QB) the Court held that a Part 36 offer on costs which excludes interest is a valid Part 36 offer, contrary to Ngassa -v- The Home Office [2018] EWHC B21.

CPR 36.5(4) states that a “part 36 offer… [for] a sum of money will be treated as inclusive of all interest…” In Ngassa it was held that therefore an offer which purported to exclude interest was not a valid Part 36 offer and therefore would not attract the consequences of Part 36.

However, in Horne the judge found that in detailed assessment proceedings, interest accruing under section 17 of the Judgments Act 1838 does not form part of the claim for costs, as it is a statutory entitlement in respect of which the Court is not required to make any finding. Therefore, unlike interest which may form a part of substantive proceedings (for example interest under the Late Payment of Commercial Debts (Interest) Act 1988) which forms part of the claim and must be Ordered by the Court, Judgments Act interest does not form a part of the “claim” for costs, and is not required to be ordered by the Court (though it may be disallowed).

Whilst the judgment in Horne is both legally sound and eminently sensible, as CPR 36 was not drafted with detailed assessment proceedings in mind (indeed until 2013 it was not possible to make a Part 36 offer in costs proceedings and is only now applicable due to a modification to Part 47 specifically applying Part 36 to detailed assessment) practitioners should bear in mind that Horne is a first instance decision and a different court on a different day may find differently. It may be prudent for practitioners to continue to include interest in Part 36 offers on costs until further authority clarifies the position. It is however a useful judgment to deploy where there is any dispute as to the validity of an offer.

Matthew Rose is an Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact him at matthew.rose@clarionsolicitors.com and 0113 222 3248. You can contact the Clarion Costs Team on 0113 246 0622.

Court of Protection Costs – Types of Assessments for your Costs.

joshuasiddingLeave a comment

The previous blog in this series focused on the process of what goes into a Bill of Costs in the Court of Protection world. This blog will instead look at the process of an assessment in the Court of Protection and the different types of assessment that can occur.

Firstly, authority for the cost’s assessment must be established, as all Orders as to costs are at the discretion of the Court of Protection. There are three main methods of evaluating costs; agreed costs, fixed costs and summary/detailed assessment of Costs.

  • Agreed Costs

These kinds of costs Order are not regularly available in Court of Protection cases. As a principle, all bills of costs must be assessed, except where fixed costs are available. However, the Court may authorise parties to agree costs, where appropriate to do so. This is often used upon the death of a Protected Party whereby the Deputy is expected to agree costs with the Executor of the estate.

  • ­Fixed Costs

­Found within Practice Direction 19B, fixed costs are available to solicitors and professionals acting as Deputy. The general rule is that costs of the proceedings should be paid by P or charged to their estate, but this rule can be departed from.

In Cases where fixed costs are not appropriate, professional Deputies may, if preferred, apply to the SCCO for a detailed assessment of costs. However, this does not apply if P’s net assets are below £16,000. In these cases, the option for detailed assessment will only arise if the Court makes a specific order.

  • Detailed Assessment

The detailed assessment of costs under Orders or Directions of the Court of Protection is dealt with in accordance with the Civil Procedure Rules. Professional Deputies should lodge a request for detailed assessment with the SCCO (not the Court of Protection or the Office of Public Guardian) using the N258B (request for detailed assessment), accompanied by:

  • The bill of costs;
  • Documents giving the right to detailed assessment;
  • Copies of all the orders;
  • Fee notes of counsel or experts;
  • Details of other disbursements;
  • Postal Address of any person who has a financial interest in the outcome of assessment;
  • Relevant assessment fee (£115 or £225);
  • The OPG105 (if applicable).

Part 27 of the Practice Direction 17.2(2) states that cases over £100,000.00, complex or other cases are to be dealt with by a Master. The relevant papers in support of the bill must only be lodged if requested by the Master.

Once the bill of costs is lodged in the correct manner, the Costs Officer will review the bundle of documents and assess the costs. The Costs Officer will review the bill of costs alongside the files of papers and decide whether costs have been reasonably, necessarily and proportionately incurred, making reductions, where necessary based on relevant case law and judicial decisions. The bill of costs is thereafter returned to the Deputy for consideration.

Clarion can also assist with requests for reassessment if the outcome is not as expected. If you would like further information about this process, then please do not hesitate to get in contact.

Joshua Sidding is a Paralegal in the Court of Protection Team of the Costs and Litigation Funding Department at Clarion Solicitors. You can contact him at Joshua.sidding@clarionsolicitors.com and 0113 222 3245, or the Clarion Costs Team on 0113 246 0622.

You can also take advantage of our free telephone advice service – available outside of office hours – by calling 07764 501252.