Further to our earlier update, Professor Dominic Regan shares his thoughts on the MOJ’s extension of fixed costs for cases worth up to £100,000.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com.
Under the Solicitors Act 1974, a client only has an absolute right to an assessment of a solicitor’s bill if an application is made within one month of receiving the bill. While an assessment can still be ordered where the bill is unpaid 12 months of receipt of the bill, once those 12 months have expired, the client must demonstrate that there are special circumstances before an assessment can be ordered.
In Raydens Ltd v Ms Julie Cole [2021] EWHC B14 (Costs), the defendant asked the court to make a finding of special circumstances based on the adequacy of costs estimates, billing irregularities and unilateral increases to hourly rates.
The merits of the defendant’s case on cost estimates and billing irregularities were not considered, as those issues represented a new case not addressed in witness evidence. The issue of increases to hourly rates did, however, result in a finding of special circumstances.
The claimant represented the defendant in matrimonial proceedings from 2013 until 2018. The engagement letter provided for hourly rates to be reviewed at the beginning of April each year. The claim was conducted by a partner and a junior assistant. Between 2014 and 2017, the partner’s rate increased from £245/hr to £320/hr and the junior assistant’s rate increased from £100/hr to £165/hr.
In making a finding of special circumstances, the Master found that the increased hourly rates were presented to the defendant as a fait accompli and if there was an explanation to justify the increases, it was not given to the defendant. The Master also considered that there must be an issue about informed approval by the defendant of the hourly rate increases.
The fact that the contract of retainer provided for increased hourly rates and the claimant had communicated those to the defendant in accordance with their contractual obligations, does not seem to have been enough in this case defend the application for assessment.
This article originally appeared in our August 2021 Newsletter which can be found here.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com.
Court and Tribunal Fees – The Government response to the consultation on ‘Increasing selected court fees and Help with Fees income thresholds by inflation’
Following a consultation process, the Government will be proceeding with proposed increases to Court fees. the changes are likely to come into force in early Autumn. The proposed fee increases reflect inflation and are not therefore real terms increases.
The proposed increases will effect the costs of detailed assessment as set out below.
| Description | Current Fee | Increase | Final fee |
| Assessment of costs (under Part 3, Solicitors Act 1974) | £55 | +£4 | £59 |
| Where the party filing the request is legally aided | £220 | +£17 | £237 |
| Costs up to £15000 | £369 | +£29 | £398 |
| Costs £15000 – £50000 | £743 | +£58 | £801 |
| Costs £50000 – £100000 | £1,106 | +£86 | £1,192 |
| Costs £100000 – £150000 | £1,480 | +£115 | £1,595 |
| Costs £150000 – £200000 | £1,848 | +£144 | £1,992 |
| Costs £200000 – £300000 | £2,772 | +£216 | £2,988 |
| Costs £300000 – £500000 | £4,620 | +£360 | £4,980 |
| Costs Above £500000 | £6,160 | +£480 | £6,640 |
| Issue of default costs certificate | £66 | +£5 | £71 |
| Appeal (detailed assessment proceedings) | £231 | +£18 | £249 |
| Request/application to set aside a default costs certificate | £121 | +£9 | £130 |
There will also be an effect on the costs of assessment in Court of Protection cases:
| On the filing of a request for detailed assessment for Court of Protection | £85 | £2 | £87 |
| Appeal against a Court of Protection costs assessment decision | £65 | £5 | £70 |
Bethany Collings is an apprentice paralegal in our Costs and Litigation Funding team. If you have any questions, please contact her on 0113 227 3607 or at Bethany.Collings@clarionsolicitors.com
The LASPO reforms were introduced on 1 April 2013. Sir Rupert Jackson was the author of the reforms which introduced over 100 individual reforms.
In this video podcast, Dominic Regan (consultant to the Costs and Litigation Funding team at Clarion) poses questions to Sir Rupert on the LASPO reforms 8 years after implementation.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com.
Please see our Costs Management team’s first of many podcasts. We include useful tips regarding how the precedent H Cost Budget can assist with lock up and cash-flow. We also discuss the statement of truth and the importance of the incurred cos. To view please follow this link.
You can find out more about our services here or you can contact the Costs Team at CivilCosts@clarionsolicitors.com
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.
You can find out more about our services here or you can contact the Costs Team at CivilCosts@clarionsolicitors.com
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.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com.
Not only is it prudent and good practice, but it is essential that clients are regularly provided with estimates of their potential legal costs and are appraised in that regard.
The SRA require lawyers to provide their clients with the best possible information regarding the cost of the matter. This should be provided at the outset and reviewed and updated as and when necessary. Estimates of costs up to a particular stage are inadequate to meet the SRA requirements, an estimate of costs up to the conclusion of the claim is required.
The SRA requires lawyers at the outset to analyse whether pursuing the claim is commercially viable. Does the outcome justify the risk of having to pay someone else’s fees? So, an explanation needs to be given to the client of the likely costs of the claim, to include both party’s costs and whether the claim is worth pursuing in view of that. This should be reviewed throughout the lifetime of the claim and updated if appropriate. The reasoning is that the client should be able to make a fully informed decision when deciding to pursue litigation, a partial estimate does not allow this.
This is good practice in any event as it ensures that your client’s expectations are managed and will lead to no surprises. This transparency can lead to less disputes regarding the level of fees and the avoidance of any complaints in law firms which centre around fees.
The type or complexity of the claim will really depend on how sophisticated the estimate will need to be, however scoping the work properly will alleviate any scope creep.
Moreover, preparing an estimate of how much you consider that the claim will cost will assist regarding your approach, a more informed decision can be made regarding this. Providing this information does show confidence in pricing and in any event this more sophisticated pricing is being seen in the marketplace.
In the event of scope creep, a detailed estimate can assist and justify those further costs that are associated with the additional work. It is wise to keep your client informed if any of the out of scope work is not recoverable from the other side, failure to do so may put you at risk regarding those additional costs.
In addition to identifying out of scope work, it is sensible to monitor your estimate and advise the client if the estimate is subject to change. If a detailed estimate has been provided at the outset it will be much easier to explain why the estimate requires increasing.
The draconian sanctions and restrictions surrounding budgets do not apply to estimates, the estimates are used as a yardstick to measure reasonableness. It is not intended to be straight jacket, that said, they do need to be prepared with care because if the client can show reliance and the matter proceeds to solicitor and own client assessment then your costs are at risk of a reduction as a result of that reliance.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com
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
This series of blog articles will address the increasing viability of third party funding as an alternative to traditional litigation funding methods. It will look at how the law has developed historically and how the Court now approaches third party funding and the potential liability of third party funders.
The third part of this series will explore the liability of third party funders in the matter of Arkin v Borchard Lines Ltd (Nos 2 and 3) [2005] 1 WLR 3055.
Background
This matter related to an unsuccessful action in respect of anti-competitive practices which resulted in the collapse of the Claimant’s company, and which severely affected his finances. The Claimant entered into an agreement with a professional litigation funding company (MPC) to provide funding for the expert evidence and litigation support services for the expert. MPC did not agree to pay any of the Defendants’ costs or to provide finances for an ATE premium due to the significant amount of the premiums available.
The claim was unsuccessful at Trial and the Claimant was ordered to pay the Defendants’ costs. The Defendants’ then sought a non-party cost order against MPC for the entirety of the Defendants’ entitlement to costs. However, this was refused at first instance.
The Defendants subsequently appealed the decision.
Decision
The Court of Appeal considered the balance that needed to be struck between the access to justice provided by third party funding and the general rule that costs should follow the event. It was considered that a funder who purchased a stake in an action should then be protected from all liability of the opposing party’s costs in the event the claim fails.
The Court of Appeal commended the following approach:
‘a professional funder, who finances part of a Claimant’s costs of litigation, should be potentially liable for the costs of the opposing party to the extent of the funding provided’
This has become known as the Arkin cap. This approach has provided clarity and transparency to funders as they can now quantify their liability should the matter fail.
Whilst the cap has been readily adopted by the funding industry, it has also not been without criticism. The main criticism being that the cap creates an uneven playing field in favour of the third party funder as they will only ever be liable for the amount of their investment, whilst the opposing party would be liable for all of the costs of the funded party.
In the next part of the series…
The next blog in this series will take a look at the recent decision which has built upon the ‘Arkin cap’ in the matter of Davey v Money [2019] EWHC 997 (Ch).
This blog was prepared by Kris Kilsby who is an Associate Costs Lawyer at Clarion and part of the Costs Litigation Funding Team. Kris can be contacted at kris.kilsby@clarionsolicitors.com or on 0113 227 3628.