Tag: Fixed Costs

No Fixed Costs until October 2023

Joanne ChaseLeave a comment

The introduction of Fixed Costs in most cases with a value up to £100,000, which was originally expected in April 2023 has now been pushed back to October. Speaking to the Civil Justice Council on 18 November 2022 Lord Bellamy said:-

We’re very conscious of how important it is to get this right… a little more time… will give the sector more time to adjust

Lord Bellamy – Civil Justice council, 18 November 2022

Fixed costs are controversial amongst some in the legal sector. Lord Bellamy accepted that fixed costs required a “complex set of rules” and it “hasn’t been easy”. Many practitioners remain skeptical that fixed costs as currently proposed are workable. In particular, some have pointed out continuing satellite litigation in relation to the existing Fixed Costs regimes in RTA and EL/PL claims as evidence that Fixed Costs do not reduce the volume of litigation.

Whilst some may breathe a sigh of relief, this is only a delay. Lawyers should use this time to prepare and test their business models to ensure that they are robust. There should be particular emphasis on reviewing client contracts and retainers to reflect the changing market and the Belsner judgment.

Should you have any questions, you can contact the team at CivilCosts@clarionsolicitors.com

Multiple Claimants under New Fixed Costs rules

Joanne ChaseLeave a comment

The Fixed Recoverable Cost Consultation Paper published in 2019 proposed that in claims with multiple claimants “…where the cause of action is the same and the claim itself is either similar or subsidiary to the principle claim… we propose that the [Fixed Recoverable Costs] for each additional claimant should be set at 10% of that for the principal claimant”. At the time of writing we do not know what final form the Rules will take. However, they will need to be worded carefully to avoid injustice where there are multiple claimants who are separately represented, for example where there is contributory negligence.

Separate Representation

At a Judicial Panel hosted by Park Square Barristers on 12 July 2022 I asked how the court would approach multiple claimants who were separately represented. In particular I pointed out that the rule appeared to be predicated on the assumption that subsidiary claimants would benefit from sharing work from the primary claim and in reality additional claimants do not necessarily generate significantly more work. This is clearly not the case where parties are separately represented.

DDJ Rafferty and Recorder Richard Paige both agreed that in these circumstances the sensible approach would be that separately represented claimants would not be limited to 10% of the fixed costs.

Court’s Jurisdiction to remedy injustice

The court’s power to remedy any defect or injustice in the FRC rules may be limited. In Aldred -v- Cham [2019] EWCA Civ 1780 the claimant argued the court should allow a disbursement for an opinion obtained for approval of a settlement on behalf of a protected party under CPR 45.12(2)(c). CPR 45.12 sets out various disbursements the court may allow, and (2)(c) allows the court to award any disbursement incurred as a result of “…a particular feature of the dispute”.

In Aldred the Court of Appeal held that the claimant’s status as a protected party was a feature of the claimant, not a feature of the dispute, and that the court could not therefore allow the disbursement. In effect the court held that in the case of fixed costs the court is bound to applying the letter of the rules, and that deficiencies or injustice is a matter for the Rules Committee.

Conclusion

It will be important for practitioners to carefully consider the wording of the rules once they are published. Solicitors considering representing claimants in situations such as this should be careful to advise of the possibility of a limit on recovery of costs if the rules are unclear. Fixed costs rules are generally interpreted strictly, and lawyers should not assume that injustice may be remedied by appeal.

Should you have any questions, you can contact the team at civilandcommercialcosts@clarionsolicitors.com.

Contracting Out of Fixed Costs

Joanne ChaseLeave a comment

In Doyle -v- M&D Foundations and Building Services Ltd [2022] EWCA Civ 927 the Court of Appeal held that a consent order which provided that the Defendant would pay the Claimant’s costs “to be the subject of detailed assessment if not agreed” was an agreement to contract out of the Fixed Costs regime. The Claimant’s costs were therefore to be assessed on the standard basis.

Background

The Claimant was an employee of the Defendant. The Claimant was injured during the course of this employment whilst working on a building site. The Claimant commenced a claim against the Defendant under the Pre-Action Protocol for Low Value Personal Injury (the EL/PL Protocol).

The Defendant made a Part 36 offer. As it was less than 21 days before trial the Claimant responded stating that quantum was agreed but the terms of settlement would need to be set out in an Order. The agreed order provided that the Claimant’s costs would be “subject of detailed assessment if not agreed”.

Analysis

The Court distinguished the case from Ho -v- Adelekun [2019] EWCA Civ 1988 on the basis that in that case it had been clear that the parties intended to compromise on Part 36 terms (which would have engaged Part 45). In this case, the Claimant had expressly stated that the Part 36 offer was rejected.

The Order did not include the words “on the standard basis”. The Court rejected the Defendant’s argument that this meant the Court should assess the fixed costs. It held that where costs are “assessed” they are inherently not “fixed”. The meaning of “costs to be subject to detailed assessment” was therefore that costs be assessed on the standard basis.

Conclusion

The Court held that “if parties wish to settle on [a fixed costs basis] it is easy enough to say so.” Parties should ensure that the basis of settlement / assessment is clear. An agreement for costs to be assessed is an agreement to contract out of fixed costs.

Should you have any questions, you can contact the team at civilandcommercialcosts@clarionsolicitors.com.

Annual open meeting of the Civil Procedure Rules Committee – 13 May 2022  – Costs update

Andrew McAulay1 Comment

The CPRC annual open meeting took place today via Teams in keeping with the format of the previous two years.

The meeting was opened by the Master of the Rolls, The Rt. Hon. Sir Geoffrey Vos, who spoke about the Civil Justice Committee’s current holistic review of costs as a whole in light of the various radical changes coming forward. The group will look at the recent changes to guideline hourly rates, costs budgeting (which he said remained controversial and needs another look), costs in the pre action space, and upcoming fixed costs changes. It was confirmed that there may be recommendations to the CPRC following the CJC’s report as it is important to look at how these issues interact and to ensure that things are working smoothly.

The open meeting includes time for questions and, perhaps unsurprisingly, there were plenty of costs issues raised, particularly in respect of the upcoming changes to fixed costs. The following costs matters were discussed and the full minutes will likely be published in June:

Fixed Recoverable Costs

There are currently 2 open consultations in respect of QOCS and vulnerability. Comments are due in by 20 June. Thereafter, the rules are scheduled to be approved at or by the CPRC December 2022 meeting, with a view to implementation in April 2023. Additional questions were asked regarding late acceptance of Part 36 offers and whether the new FRC rules would include any penalties. It was confirmed that this was not covered by the consultation.

QOCS/Part 36

A question was asked regarding any proposed changes to the QOCS position where there is late acceptance of a Defendant’s Part 36 offer. It was confirmed that the QOCS review looks at the position arising from Ho v Adelekun only.

Guideline Hourly Rates

Various questions regarding the increased GHRs were raised, including whether this would lead to an increase in the £1,500 cap for Provisional Assessment costs and whether periodic reviews/updates are anticipated to prevent stagnation.  It was confirmed that the CJC’s costs group, led by LJ Birss, is looking at costs as a whole and Guideline Hourly Rates is one of the specific areas that will be considered along with pre action costs, budgeting and fixed costs. They will report soon and invite consultation responses with a final report due in the autumn. That report will not include detail of any proposals but will look at broader principles.

Aldred v Cham

Changes to CPR 45.29(h) were agreed in principle at last year’s open meeting but have not yet been implemented. The detail of that proposal can be found here. It was confirmed that that decision was subject to the wider work of the fixed costs committee on CPR 45 in its entirety. The Aldred point will be dealt with in those changes due in April next year.

Fee Remissions

There are conflicting judgments regarding the recoverability of Court fees between the parties when a party has chosen not to seek a fee remission. The lacuna committee considered the issue but work is currently paused as the MOJ considers the policy implications.

N260

Some minor changes to the N260 were suggested during the consultation on the electronic statement of costs. These fall into two categories, firstly, changes arising from the GHR report involving a certificate to show where the work was carried out and, secondly, minor changes to make the form more user friendly. There is currently no time frame for those changes.

Belsner v Cam Legal Services Ltd

The issues arising from Belsner v Cam will again fall within the CJC costs group’s work on pre action costs.

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

Consultations open in respect of QOCS and Vulnerable Parties

Andrew McAulay1 Comment

Following the fixed costs consultation published in September 2021, two further consultations have now opened in respect of provisions for vulnerable parties and the QOCS issues arising from Ho v Adelekun [2021] UKSC 43.

The consultations close on 20 June 2022 and details of how to respond can be found here.

QOCS consultation

We looked at the judgment in Ho v Adelekun back in December. The case clarified the position in respect of the interplay between CPR 44.12 and CPR 44.14, and the effect of QOCS on a Defendant’s ability to offset an order for their own costs against the Claimant’s costs. You can read that article here.

The decision confirmed that Defendants can only enforce their costs orders up to the amount ordered for the Claimant’s damages and interest (CPR 44.14 (1)). It was suggested at the time that this may lead to results that appeared unfair and that the CPRC may need to consider the issue to put right any ambiguities.

The proposed changes seek to address those concerns by adding the amount of any costs order to the sums set out in CPR 44.14 (1) and by including ‘deemed orders’ under Part 36:

Full details can be found here.

Vulnerable Parties Consultation

The vulnerable parties consultation proposes to add additional provisions for an amount in excess of fixed costs to be claimed where a party or witness is vulnerable, where that vulnerability has caused additional work to be required, and the claim is for an amount at least 20% greater than the applicable fixed costs.

Such claims will be assessed and, if the assessed sum is less than 20% greater than fixed costs, the court will make an order for the lesser amount of fixed costs or the assessed costs.

Full details 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.

Recent Developments from the Professional Deputies Forum

Stephanie KayeLeave a comment

Clarion are delighted to work alongside the Professional Deputies Forum (PDF) and we wanted to share the recent great efforts of the PDF working group, which our Stephanie Kaye is a part of.

Interim payments and fixed costs

Following on from the recent delays with the SCCO, at the recent Court of Protection Rules Committee, Martin Terrell (representing the PDF), proposed the idea of extending interim payments in matters other than the general management costs. An agreement was reached, whereby in matters where a final order has been made, solicitor-applicants are allowed to ask the Court for interim payment of up to 75%. This ensures that the solicitors will not have to wait until after assessment to receive their costs in matters such as Deputyship applications, statutory will applications or other ad-hoc applications. The Deputy would need to issue a credit note if the final costs allowed on assessment are less than the amount taken on account and these funds would then need to be returned to P. This development will need to be trialled, however, it will benefit many firms and ensure that they are able to remain financially viable. This is huge progress for those firms who carry significant WIP on application cases.

SCCO delays

The PDF has written to the Cost Judges to express their viewpoint on the delays and lack of engagement from the SCCO with the PDF. The PDF has advised that the only official route of complaint is via the HMCTS. Members of the PDF are encouraged to file complaints via this method if they have not already done so in the hope that the volume of complaints will have a greater impact and achieve the shared goal amongst Court of Protection practices. There is a direct link to the complaints procedure on the SCCO website. Any progress made with the SCCO will be shared on the PDF forum and also on the Clarion blog.

If you have any questions regarding the work of the PDF working group or any concerns to bring to the attention of the PDF, please contact Stephanie Kaye directly.

This blog was written by Casey McGregor. If you have any questions regarding COP costs, please contact Casey at Casey.Mcgregor@clarionsolicitors.com

CPRC Costs Sub-Committee provides update on fixed costs

Andrew McAulayLeave a comment

The minutes of the CPRC’s March 2022 meeting were published today and can be found here.

The Costs sub-Committee confirmed that work has commenced in respect of the extended fixed costs regime which was reported last year. The committee’s first meeting was held last month but a precise timetable has yet to be fixed.

The Sub-Committee will also be considering FRC in the context of vulnerable witnesses/parties and there is likely to be a substantive review of the structure of CPR 45.

It was also confirmed that a consultation is anticipated in respect of Qualified One Way Costs Shifting (QOCS).

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

Consultation open on fixed recoverable costs in clinical negligence claims

Andrew McAulayLeave a comment

Clinical negligence matters have so far been excluded from fixed costs reforms and do not form part of the changes already due to be implemented in October 2022 (which can be found here).

A separate review has been carried out in respect of lower value clinical negligence matters and the Department of Health & Social Care published their proposals on 31 January 2022.

The consultation document sets out proposals for a streamlined pre-issue claims process for claims outside of the small track valued up to £25,000 in damages. Proposed exclusions include claims requiring more than two liability experts, claims with multiple defendants (where the allegations are different), claims involving stillbirth or neonatal death and claims where limitation is raised as an issue.

Matters would fall into a standard track or a light track according to complexity. Streamlined processes are set out for each track and template documents are proposed. 

The proposed fixed costs for each track are set out in the tables below and include provision for an additional ‘bolt-on’ for cases involving protected parties. We would recommend that the costs grid be read in conjunction with the flow charts detailing the process for each track at the end of the consultation report.  

Both tracks include mandatory neutral evaluation. The evaluators fees would also be fixed and shared equally.

Sanctions are proposed for failure to comply with the scheme. For Defendants, failures to meet the initial response times would result in the claim moving from the light track to the standard track, or from the standard track out of the FRC scheme entirely. For other failures, a 50% percentage uplift or reduction is proposed depending on which party defaults.

The consultation closes on 24 April 2022 and can be completed online here.

This article was originally featured in our February 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.

Fixed recoverable costs to be extended as Jackson proposals accepted

Andrew McAulay2 Comments

The government’s response to the MOJ consultation on Extending Fixed Recoverable Costs in Civil Cases has now been published and can be found here.

The report confirms that the recommendations made by Sir Rupert Jackson in 2017 will largely be implemented, save for the introduction of an ‘Intermediate Track’ as those cases will fall into an expanded Fast Track for cases valued up to £100,000.

Mesothelioma, clinical negligence, actions against the police, child sexual abuse claims and IP matters will be excluded. There will also be a fixed costs regime for noise induced hearing loss claims and costs budgeting will be introduced for judicial review claims where costs exceed £100,000.

Cases within the new expanded Fast Track will be allocated to one of four bands based on complexity with uplifts to apply where a Part 36 offer is beaten (35%) or there has been ’unreasonable behaviour’ (50%). The figures set out by Sir Rupert Jackson in 2017 will be adjusted for inflation, the original Fast Track and Intermediate Track proposals are, however, set out below:

The draft rules will be submitted to the Civil Procedure Rules Committee for consideration before being finalised. It is anticipated that the changes will be implemented in April 2023.

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