Costs - all change again

17 Aug 2015

The minutes of the Civil Procedure Rules Committee (CPRC) July meeting are now available and it is notable that further changes to the costs rules were very much to the fore.

Costs Budgeting

The CPRC considered a report from Coulson J’s sub-committee reviewing the operation of the costs management regime and a number of important changes have been approved, as set out below. Concerns were expressed at the delays in the pre-trial process due to costs management and the drain on judicial resources. The changes are intended to relieve the pressure by removing some of the cases from the regime and reducing the judicial time involved in costs management. The required amendments will likely be available for review and approval by the CPRC at its October meeting. Claims involving children are to be excluded from the costs management regime (subject to judicial discretion to apply it where applicable) due to the time such cases can take to reach trial in light of the potential period before injuries stabilise.

  • Cases involving protected parties will stay within the regime.
  • The practice direction (PD) will indicate that it may be appropriate to exercise discretion to disapply costs management where a party has a short life expectancy or is particularly elderly.
  • There is also a desire for more to be done to encourage parties to agree budgets where possible and provision should be made for budgets to be exchanged 21 days (rather than seven days) before the first CMC, with a requirement that the parties should agree the budget (or as many elements as possible) failing which, they should exchange alternative figures for phases not agreed seven days before the first CMC.
  • The PD should make it clear that the approval of the court relates to the totals for each phase and that it is not the role of the court to fix or approve the hourly rates (the Judicial College report considered by the committee shows that this is a contentious area amongst the judiciary in light of the difficulties in approving lump sums without considering the background detail on a time and hourly rate basis).
  • Precedent H should be improved in its presentation and content and it should be made clear that budgets should only refer to contingencies that are “more likely than not to happen”, consistent with Warby J’s ruling in Yeo v Times Newspapers Ltd [2015] EWHC 209 (QB).
  • The simplified one page version of Precedent H (currently for budgets up to £25,000) should be used for cases up to £50,000 in value. The CPRC agreed with the sub-committee that the aim should be to introduce fixed costs for such cases as soon as possible, albeit that it recognises that this could take some time to come into effect.

Costs Precedent Q

  • The CPRC signed off a number of changes which are covered by the statutory instrument and making document for the 81st update to the CPR.
  • Particularly, amendments are made to Part 47 and PD47 (proceedings for assessment of costs) to reflect the addition of the requirement to provide a breakdown of the costs claimed for each phase of the proceedings, in the form of Model Precedent Q, when detailed assessment of costs is required and a costs management order has been made.
  • If a party commences detailed assessment after 1 October 2015, then the party must serve (and file when requesting a hearing) the Precedent Q breakdown, if a costs management order has been made before commencing assessment proceedings.
  • This is a temporary measure, pending the introduction of the new form bill of costs referred to below in order to assist detailed assessments, so that bills of costs can be cross-referenced against the costs budget phases.

New Bill of Costs Pilot Scheme

A pilot scheme for testing a new bill of costs, Precedent AA, is introduced by PD51L. The pilot scheme will operate for six months from 1 October 2015 to 1 April 2016.

The Jackson Steering Committee has released the new format bill of costs and guidance document for an initial consultation. This will be followed by two pilot phases:

  • Use of the new format bill of costs on a voluntary basis in the Senior Courts Costs Office (SCCO) where the detailed assessment notice is served on or after 1 October 2015. After this, the new format bill will be amended, as necessary.
  • Planned compulsory use of the new format bill in the SCCO for all cases where a costs management order and the authority to assess are made on or after 1 April 2016.

The new format bill presents the work done by reference to the tasks undertaken within a specified phase of the litigation. The guidance document describes the bill of costs as "a self-calculating, self-summarising spreadsheet document based on the J-Codes, which is capable of being generated automatically by use of the J-Codes and adopting the same structure."

The aim is that it can be used for recording time, budgeting and billing, and the structure should enable the automatic production of "reports" with different levels of information, suitable for different purposes (such as budgeting, billing, negotiation or assessments).

The deadline for submitting comments or suggestions on the new format bill of costs is 4pm on 18 September 2015. The comments will be considered as a whole with the aim of improving the current draft.

Fixed recoverable costs in clinical disputes

  • The CPRC minutes also note the Department of Health proposals to introduce fixed recoverable costs for clinical negligence claims in England and Wales for cases up to £100,000. The proposals are at a very early stage with the preparation of draft rules prior to a consultation (planned for autumn 2015). Whilst there will be a focus upon cases up to £100,000, views will be sought on claims for up to £250,000.
  • The view is to finalise rules by July 2016 for implementation in October 2016.

Future

Despite the anticlimax of the Supreme Court July decision in Coventry v Lawrence [2015] UKSC50, there are significant costs developments afoot during the coming months as set out above, with further consultation on the controversial court fees increases also ongoing (due to close on 15 September 2015). The issue of costs reform in Noise Induced Hearing Loss claims is also likely to move up the agenda. As ever, BLM will keep you informed in relation to the significant developments.

 

<< Back

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.

Related Expertise


Related contacts


David Caswell

David Caswell

Partner,
Manchester


Who to contact


For more information about any of our news releases, please contact:

Natalie King
 +44 20 7638 2811
+44 20 7920 0361
Email Natalie

Fi Khan
+44 161 236 2002
+44 161 838 6324
Email Fi

|