PLA Annual Debate – summary of costs discussion

 

Chair

  • Keith Conway, Clyde & Co

Panel

  • HHJ Dight
  • Chief Master Marsh
  • Senior Costs Judge Gordon-Saker
  • David Holland QC

The PLA have conducted a survey of its members, cost lawyers and PBA members to gauge opinion on the recent Jackson Cost Budgeting reforms. The survey suggests a general dissatisfaction with the reforms and how the reforms have been implemented.

Our survey found that a majority of members feel that judges do not understand how long it takes to carry out a task, that there is inconsistency in whether fees are being limited to guideline hourly rates and whether budgeting is being applied to cases concerning Part II Landlord and Tenant Act 1954. The results also showed that experts’ and barristers’ budgeted fees are not being reduced in a majority of cases whereas most respondents felt that solicitors’ fees were being reduced and that the gap between actual costs chargeable to the client and recovered from the other side upon success had grown still further. Overall a majority of respondents felt that clients would end up paying more to their solicitor as a result of the reforms. [See the PLA Costs Survey results for more detail.]

On 5 November 2014 Keith Conway presented the results of our survey on Jackson Cost Budgeting to an audience of PLA members, cost lawyers and PBA members. Our Panel then answered a number of questions and engaged in an informative and good natured debate. The following is a summary of matters discussed. The Panel members were representing their own views rather than the view of the judiciary and bar.

Debate Highlights

Cost Case Management Hearings & Precedent H

The review of Precedent H is meant to be a “high level review of budgets” and not a “detailed assessment in advance”. If you descend into looking at guideline or hourly rates it is almost missing the point. The point is to look at the figure for each budget phase, the overall budget, and the nature of the dispute.

There needs to be better preparation for cost case management conferences (ccmc). Parties need to try to agree budgets in advance. If you agree all of the budget the court can’t interfere. If you agree only part the court can look at the whole budget so you need to try to agree it all. In the Chancery Division skeleton arguments for a ccmc should detail what costs are agreed, what costs are not agreed and what to allow the Master to prepare.

In Central London County Court (CCLC), skeleton arguments for a ccmc should specify what is agreed and what is not but without detailed reasons. In CCLC 45 minutes will be allowed in future for ccmcs to avoid delays in getting a hearing.

Judicial Training

Judges received 1 day training on the Jackson Reforms including cost budgeting as a whole.

There may be an argument for giving greater guidance to judges on what is proportionate and reasonable for particular types of cases.

During the training judges were told to take a hard line approach to costs and proportionality but some may have taken that too far.

Reasons For The Reforms

One view is that the reforms reduce the need for detailed assessment but the reality is that very few cases get to detailed assessment. But now every case needs to do the detailed review of cost at an early stage. The debate questioned the merit of that.

There are other benefits to the reforms. Some solicitors were poor at telling clients what the costs would be and that is addressed by requiring the preparation of Precedent H. It also gives clients a better idea of what the other side’s costs will be.

During the consultation the Law Society supported cost budgeting.

The alternative is fixed costs. Government are currently looking at fixed costs for fast track cases but once that is done, if the reforms are not working, that may mean looking at fixed costs for smaller multi-track cases. Given the diversity of cases at multi-track that may not be appropriate but it is the alternative.

Benefits Of The Reforms

The judge that hears the case should be allocated to a case from the start which allows directions to be tailored to each case. Don’t expect agreed directions to be accepted by a judge.

Judges will look at costs when looking at directions so, for example, standard disclosure may no longer be the standard direction. Disclosure and expert evidence can be tailored to each case and in the interests of proportionality. However judges will not set directions based upon how much the parties can afford to spend.

In the Chancery Division proportionality is less of an issue than elsewhere. In Chancery more cases are settling before or shortly after ccmcs which is allowing Masters to focus on the cases that do proceed.

In CCLC the courts are struggling to find sufficient court time which is another reason why ccmcs are being limited to 45 minutes rather than the 90 minutes previously allowed. Average waiting times for ccmcs in County Courts vary between 2-4 months.

At the conclusion of a trial you should ask for most of the budgeting costs as an interim payment of costs.

At detailed assessment a cost judge will only interfere with budgeted costs if there is a good reason to do so. Detailed assessment will also look at pre budgeted costs (so time incurred prior to a ccmc).

Final Message

There is “no realistic prospect of fundamental change in the foreseeable future if the system can be perceived as working”.