E-working

I was tempted to leave LASPO alone for a few days and digest the Law Gazette & New Law Journal  over the weekend, but then I saw the headline “E-working project scrapped”. (I also saw how many people were visiting my blog searching for such info and I thank you the readers for this.)

Intrigue made me read on to find that a major project to introduce e-working in the Rolls Building has been “shelved” due to “significant problems”. Having spent £9.5m getting nowhere fast in an attempt to enable court users to submit documents electronically, improve document management and listing, the project has been shut down.

£9.5m spent doing feasibility studies, fundamental reviews and deciding that the scope of the work required was so significant that a business case could not be made.

Judging by the slapdash efforts to put LASPO together, I would not have paid £1 for the Jackson Report and LASPO, and yet £9.5m is not enough to introduce email and cloud computing – things you can get for free from all good service providers. And yet they want to introduce LASPO, extend the RTA portal to deal with all PI cases up to £25k (and beyond at a later date) and introduce electronic billing, doing away with the experts who know about costs – the Costs Lawyer, and move to provisional assessment by Judges who are not interested and do the exercise summarily.  All of the reports involved in coming up with the Jackson report had the vague whiff of being drafted on the back of a napkin (albeit a lot of napkins) disregarding all valuable evidence submitted by people in the know, whose jobs are now endangered due to the bureaucracy and idiocy of people who cannot introduce email and cloud computing having spent £9.5million thinking about how to do it.

Forgive me for sounding as if I am having a rant. But I move on.

Following the ping pong game between the House of Commons & House of Lords, it has been confirmed now that the recovery of success fees and after the event insurance will be scrapped as of April 2013, unless the case relates to mesothelioma, where a temporary reprieve has been granted to allow for further “reports” to be prepared.  Surely these reports should have been undertaken BEFORE LASPO went to print?? We are still no nearer to finding out whether that wonderful thing known as Qualified One Way Costs Shifting (or QOCS for short) is going to happen. This means, Claimants would not be entitled to recover the cost of After The Event Insurance obtained to protect against the cost risk that still exists. Not to worry – damages are to be increased by 10%……once a case has been to Court to establish the precedent.

Might I be bold and suggest that LASPO goes the way that the e-working project has gone at the Rolls Building – on the scrap heap?

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Costs to be assessed by Detailed Assessment – Forthwith or Not?

William Shakespeare

To assess forthwith, or not forthwith, that is the question

Early on in my career as a then lowly costs draftsman, I was in the vicinity of an advocate returning from court having had a bad day with a District Judge that used to haunt my local court. Many readers familiar with Cumbria will no about whom I refer. The case in question was a long running battle with a Defendant Lawyer, which had been before the court a number of times. On this particular occasion, the Judge pointed out that the Claimant was wasting his time as whilst at the last hearing C had secured an order for costs to be assessed by detailed assessment, he had not stated that they were to be assessed ‘forthwith’. The entire office learnt this lesson.

CPR 47.1 clearly states that:
“The general rule is that the costs of any proceedings or any part of the proceedings, are not to be assessed by the detailed assessment procedure until the conclusion of the proceedings, but the Court may order them to be assessed immediately.”

The Costs Practice Direction goes on at 28.1:

(1) For the purposes of rule 47.1, proceedings are concluded when the court has finally determined the matters in issue in the claim, whether or not there is an appeal.

(2) For the purposes of this rule, the making of an award of provisional damages under Part 41 will be treated as a final determination of the matters in issue.

However, the parties may agree to an assessment to be immediate / forthwith:

(3) The court may order or the parties may agree in writing that, although the proceedings are continuing, they will nevertheless be treated as concluded.

The status quo remained, and a number of detailed assessments by the unwary being hijacked and default costs certificates set aside as a result of the party seeking costs not being entitled to the same as they had failed to request that the costs be assessed forthwith.

Then came Gray v Toner – a case primarily concerned with when interest was to be payable from on costs (see previous posts on interest).  In that case, there had been a split trial on liability and quantum. It was DJ Smedley’s view that the detailed assessment of liability costs should have been commenced within 3 months of the liability costs order, notwithstanding the absence of a ‘forthwith’ direction.  At para 21 of DJ Smedley’s judgement, it was stated that it is always the court’s intention that assessment be forthwith if they order a detailed assessment.  Of course!

Thankfully, Master Campbell has stepped up to the mark to clarify this issue in Royalton v Prichard, in which the order stated that costs were to be assessed by detailed assessment if not agreed. The receiving party pursued their claim for costs notwithstanding the fact that the case was ongoing and the paying party applied under CPD 28.1.4(a) for there to be a determination as to whether costs could be assessed forthwith.

“I do not consider that it was ever Penry-Davey J’s intention that there should be an immediate assessment in this case. At the end of the hearing, the Learned Judge could have carried out a summary assessment of the costs by quantifying them there and then, with payment to be made within 14 days (applying CPR 44.8). Alternatively, he could have ordered that they be assessed by detailed assessment and paid forthwith, but it is common ground that he did not do so. In the further alternative, he could have done as he did, namely to order that the costs be quantified by way of detailed assessment but that there should be a down payment of £5,000 so that Royalton would not be out of pocket for all the costs it had incurred until the conclusion of the case . In these circumstances, as it seems to me, were I to permit the assessment to continue, I would, (if I may adopt Patten J’s description of my decision in Crystal Decisions at paragraph 77), be rewriting CPR 47.1 in the sense that I would be departing from the general rule that the only Court permitted to deviate from that rule is the court making the costs order, here Penry-Davey J’s Court.”

As such, unless the order states ‘forthwith’ assessment cannot commence, as my local DJ stated all those years ago. That same DJ also had the attitude of assessing costs and then knocking a percentage of on grounds of proportionality – something currently being considered by the powers that be, but that is for another day.

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The House of Commons have overturned the amendments to LASPO Bill affecting cases involving children and industrial diseases. The pilot scheme involving budgeting/costs management in Birmingham has been a success. The pilot scheme involving provisional assessment has also allegedly been successful, but one practitioner stated that it was only successful if you were a Claimant! How can that be a resounding success?

For those unfamiliar with the pilot provisional assessment scheme, District Judge Hill, sitting in Leeds and Scarborough County Court has been busy provisionally assessing bills of costs where base costs claimed are below £25,000. Either party can seek an audience with the Judge to say he is wrong, but failure to improve ones position by 20% means costs penalties. It apparently takes the DJ an average of 37 minutes to conduct his assessment, but this is the judge that told me all detailed assessments only need 2 hours and if it doesn’t finish in that time, you know which side he is favouring and so you can sort it out outside. Cheers!

It is expected that this scheme will be rolled out to all courts, so you are then left with the risk of having my favourite judge of recent times who told me he doesn’t like to interfere with the time claimed as no solicitors have time to waste – I managed to persuade him that he was not necessarily wasting time but pondering too long.

The assessment will be based on shorter or more succinct points of dispute and replies are only to be done where it adds something to the equation (or concedes something). I am all for better points of dispute. Countless examples of cut and paste points have passed over my desk over the years. The lastest are 120 pages to a 40 page bill that repeat the same paragraphs on every page. Conduct will be raised as an issue! But if points have to be shorter can we make the point sufficiently for a judge to interpret for the purpose of provisional assessment – particularly when they are untrained/out of date/opinionated/prejudiced etc… As for the replies, these have always been optional and Master Hurst has long advocated they should only be done if they add something so why reinvent the wheel – to stop some courts that have a practice direction ordering there production? So this surely comes back to educating judges, or having some continuity between courts. But where is the fun in that!

Simple solution for all of LJ Jackson’s gripes – enlist the help of costs lawyers! After all solicitors have been doing it as have high court bailiffs, and nobody should argue with them.

Deja vu

“In modern litigation, with the emphasis on proportionality, there is a requirement for parties to make an assessment at the outset of the likely value of the claim and its importance and complexity, and then to plan in advance the necessary work, the appropriate level of person to carry out the work, the overall time which would be necessary and appropriate spend on the various stages in bringing the action to trial and the likely overall cost. While it was not unusual for costs to exceed the amount in issue, it was, in the context of modest litigation such as the present case, one reason for seeking to curb the amount of work done, and the cost by reference to the need for proportionality.”

These were the words of Judge Alton, sitting in Birmingham County Court in Stevens v Watts, June 2000, and were quoted in Jefferson v National Freight and Lownds v Home Office, both landmark decisions on proportionality by Woolfe LJ.

Twelve years later, when commenting on costs budgeting HHJ Simon Brown QC stated in an article in NLJ (13th April 2012) that:

“Like a quality surveyor, he will have to assess what resources he has, the grade of fee earner to be deployed to undertake tasks and estimate the number of hours they will take….”

So twelve years on, we are still hearing the same thing from the same court – is anyone listening? I was in Birmingham for a hearing not long after Judge Alton issued the above judgement and boldly relied on the same. ” Is that what she’s wittering on about in Chambers? Well this is my court” was the response received from that Learned Judge. It remains to be seen whether things change or not. One thing that is gathering momentum is costs management and costs control, with HHJ Simon Brown QC operating a successful pilot in the Birmingham TCC division and it is important when operating in this court to get your budgets and estimates right. Don’t hesitate to contact us and we will be happy to assist.

Think like a teenager

Certain things stick in your mind – for me it is injustices.

One example was when an elderly lady was trying to legally evict tenants from her bungalow so she could move in now her house was too big. The tenant resisted arguing that the elderly lady could afford to buy a new bungalow but the tenant could not afford the moving fees. The client advised the court and opponent that she was taking her entire extended family to a remote Greek isle for her birthday so kindly avoid these dates. On the day the client left, the tenant issued an application for production of financial details, and the Judge found that the client was at fault for not leaving a telephone number, notwithstanding the fact that all extended family were on the remote Greek isle so nothing could be done. The judge failed to find anything suspicious in the tenant’s actions. Truly an injustice.

A further example was when a head cleaner whilst walking up the office stairs noted there was a banana skin on the stairs but as her hands were full, she made a mental note of it and intended to pick up the banana skin on her way back down. Yes, you’ve guessed it – she fell on her way down on the aforementioned banana skin! And then pursued a claim for damages and at the trial on liability won, notwithstanding she was in charge of operating the inspection regime and the fact that by her own admission, she had already seen the danger.  At the appeal, the Judge stated he would not have found for the Claimant, but could see why the DJ did, and so the appeal was dismissed. What an injustice to common sense.

So, why this blog? My teenage son came in today in a mood. He had forgotten his money for the gym and it was our fault. Why? His mum had asked if he had everything before he left including money – yes mum! It was our fault because I was at work, and his mum was driving so couldn’t answer the phone when he called wanting us to drive to the gym and give him some money that he should have already had. Of course. So, the logic of a teenager appears to be that of a Judge.

So in order to outwit a Judge, think like a teenager.

What is your time worth?

Some time ago there was a TV ad featuring BT and Gordon Ramsey (neither of which top my favourites list); which spelled out with fantastic accuracy the small-business dilemma. You might recall; it showed Gordon lying on the floor opening the back of his computer with a carving knife.

So, hands up – which business owners are guilty of doing something similar to this? I know I am.

In the ad, there is a great compounding of errors which includes ruining an essential business tool (the carving knife) and ruining another essential business tool (the computer) as well as the absurdity of the kitchen running out of control whilst Gordon messes up the computer.

It’s OTT, but it is also very real.

Most small-business owners, asked to put a value on their time, will come up with a reasonable figure – say £2 – 500 a day – yet most of us will happily spend half a day doing what a professional could do in an hour – without collateral risk.  In the case of solicitors, the billable hour is rated at £111-500 or more in some cases. So why would a solicitor want to spend time on non-chargeable work?

To an extent this approach is encouraged in business literature; Duncan Bannatytne, for example states that the first thing he did was learn accounting ‘to save paying for an accountant’. Thinking this through, why do you pay an accountant – there are basically 3 reasons:

1. As bookkeeper. So Duncan values his time less highly than the cost of a bookkeeper? Unless you genuinely enjoy pumping in figures whist Songs of Praise is on telly (and some people do), then this cannot constitute good use of time.

2. As auditor. This is not optional and has to be undertaken by an unrelated party so is not relevant.

3. As advisor/consultant. The results from this should be quantifiable, so there is a clear business rationale to employ or not employ the services of an accountant.

Additionally, amateur accounting, like opening a computer with a carving knife, can produce misleading – or just plain wrong – results, which in turn can lead to bad business decisions.

Don’t get me wrong; it is an excellent idea for a business owner to understand accounts – they aren’t just for Companies House and the Tax Man – management information (MI) is invaluable for business; learning accountancy will help you to understand and interpret the information which is provided.

But to save money on accountants – sorry worst reason ever.

So, in summary, solicitors should restrict their activities to profitable fee earning work.

Non-profitable work should be outsourced to someone who can do it cost effectively. I would suggest costs falls into this category. Our work is generally costs-neutral in that it generally costs you nothing to employ us. We can do the work quicker and more profitably, in general, than solicitors can.

Non-fee earner work should be outsourced to experts, such as accountants, practice managers, business development managers etc. Being in the legal sector for a number of years, we can certainly help out also on the business development front.

Qualifying as a Solicitor

Having spent some time with a number of solicitors at the excellent White Paper Conference at the delightful Gray’s Inn, it was apparent to many attending that it was great to learn about changes in case law, Jackson effects, new best practices etc, but it would also be good to learn some of the basics about costs, case management and things that really should have been covered when learning to become a lawyer.

Gray's Inn 

So, empowered by this I am setting forth on my quest and building on my well-received ebook – to educate the legal profession. It never ceases to amaze me that there are solicitors out there who do not know what a client care letter is, how they are going to be paid for their services, how to put a file together. What effect does failure to obtain an order directing that costs are to be assessed ‘forthwith’ have?

 

I would be bold and suggest that it would be better for all to not be embarrassed and accept we do not know everything. I will put my hand up and accept that there are areas of law that I do not fully understand, namely that relating to legal aid (which is why I employ an expert in the field to cover my minor inadequacies).

 

I recently received points of dispute claiming that my bill of costs was not in the correct format and that a success fee was not recoverable on the costs of preparing the bill. Needless to say, the solicitor in question will be receiving the benefit of my wisdom, when he is referred to CPR Costs Practice Direction where the format of a bill is explained, and KU v Liverpool City Council, in which the  Court of Appeal explained that the CFA covers the case until the conclusion, and that includes the Detailed Assessment hearing.

 

In order to assist my quest, I would be eternally grateful if anyone could forward details of what is covered / not covered when they undertook the LPC course and / or what details solicitors believe they should know about costs, but do not. A copy of the ebook to all respondents.