Case for the defence

29 Jul 2015

BLM partner, Adam Burrell has outlined some of the major concerns troubling the sector group for Costs Lawyer.

The following article was published in the July/August edition of the magazine. Please click here for more information about the publication.

CASE FOR THE DEFENCE

Costs Management

The approach taken to costs management varies even between different Judges sitting in the same court. The following four examples highlight this inconsistency:

Hourly rates - whether these should be addressed at all at the costs management stage continues to be unpredictable. Approaches vary from a steadfast refusal to consider them at all to a determination of a reasonable and proportionate rate (usually a reduction where rates exceed guideline rates).

Contingencies - sometimes these will not be allowed at all whereas on other occasions a generous and speculative approach is endorsed based upon possibilities.

Incurred costs - there is an incentive to front-load as much as possible and argue that these costs are ‘untouchable’ and should not be considered at all. Despite clear guidance from the High Court confirming these can be taken into account, the extent to which they are considered is not consistent.

Costs - the 1% cap for drafting the budget and 2% cap for other costs relating to costs management are often presented as an amount without any sort of breakdown. There can be a reluctance to go behind the maximum allowance and when pressed it is brushed under the carpet and left for detailed assessment. Such an approach undermines the purpose of setting a budget before the conclusion of the case.

Fixed costs

There are several ‘snagging issues’ with the various fixed costs provisions, such as the definition of ‘interim application’ and whether this includes pre-action disclosure applications.

Perhaps the ‘hottest topic’ currently questions which stages should apply to ‘portal drop-out’ cases. Directions often do not neatly square with table 6B (CPR 45.29C). On the fast-track County Courts are being forced, due to their lack of resources, to act efficiently by listing for trial in the first directions order.  The issue then arises which stage has been reached (whether the columns are separate and unrelated or cumulative) and whether a disposal hearing is a trial. It was always intended that the stages be cumulative so that you have to pass through each one to get the higher fee that applies to the next stage. By issuing directions which skip a stage, it is not clear which fixed fee should apply. There are several conflicting first instance decisions, which means there is a postcode lottery. 

Provisional Assessment       

Provisional assessment is operating irregularly and inconsistently. Some examples of the practical difficulties include:

What should be returned by the court?

Common problems are:

  1. Only the bill or the Precedent G is returned, not both; or sometimes neither;
  2. The papers are sent only to the claimant;
  3. No notice of the right to challenge is sent.

Filing papers

There is confusion in PD47 concerning what should be filed for a provisional assessment. Under PD47 14.3(b), the documents to be filed are those listed in PD47 13.2. They do not include correspondence and attendance notes. However, PD47 14.2 incorporates PD47 13.12 which lists documents to be filed which do include correspondence and attendance notes.

Defendant’s statement of costs

PD47 14.3(c) requires the receiving party to file with the N258 a statement of the costs.  There is no provision addressing the circumstances and the timing of the defendant filing its statement of costs.

Non-compliant replies

The replies to the points of dispute will often be the ‘last word’ before the costs are assessed. There is a restriction on the content of the replies in PD47 12.1, but it is being widely breached and the courts are failing to enforce it.

Hopefully the issues highlighted here will be resolved so that more predictable outcomes can be anticipated.

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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Adam Burrell

Adam Burrell

Partner and head of Costs,
Birmingham


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