What’s new in the world of costs?

When I undertook my law qualifications I routinely laughed when the criminal lecturer said that the law was in a state of flux following the decision in 1908. Try dealing with costs mate.

Things continue to move on at pace and there’s never any rest for the wicked.

So what’s new. The big debate is will the Jackson changes be ready for implementation in April 2013? Will predictable costs be ready? Will QOWCS be ready? Not likely.

Interesting article in New Law Journal regarding the portal for low value RTAs. Most damages are for circa £3k and yet they are looking to increase the small claims limit to £5k and implement changes to expand the upper limit for the portal to £25k. Net effect – no one will use the portal.

Following the Liverpool Test Case for ATE premiums in portal cases which decided that the court was not prepared to decide on the price of premiums – no surprises there – the next battle lines seem to be back to the good old investigations into alternative funding. Shame Judges and defendants alike have not noticed that the CFA Regs 2000 have been revoked and all a solicitor needs to do is discuss alternative funding. What part of discuss means look at countless policies, phone up the LEI provider and spend 1 hour on hold – guess what I was up to on Friday – to be told there was no LEI after all, only then to hear from the Defendant there was, and I should have kept phoning the LEI until I got an answer that the Defendants liked. Doesn’t work like that.

Moving to a wider costs picture, proportionality has been redefined: As from April 2013:

“44.4(5) Costs incurred are proportionate if they bear a reasonable relationship to:
(a) the sums in issue in the proceedings;
(b) the value of any non-monetary relief in issue in the proceedings;
(c) the complexity of the litigation;
(d) any additional work generated by the conduct of the paying party; and
(e) any wider factors involved in the proceedings, such as reputation or public importance.”

Lord Neuberger summarised the aim of the new test as:
“effectively reversing the approach taken in Lownds. In this way, as Sir Rupert said, disproportionate costs, whether necessarily or reasonably incurred, should not be recoverable from the paying party. To put the point quite simply: necessity does not render costs proportionate.”

He anticipates that:
“As such it seems likely that, as the courts develop the law, the approach will be as Sir Rupert described it:
‘. . . in an assessment of costs on the standard basis, proportionality should prevail over reasonableness and the proportionality test should be applied on a global basis. The court should first make an assessment of reasonable costs, having regard to the individual items in the bill, the time reasonably spent on those items and the other factors listed in CPR rule 44.5(3). The court should then stand back and consider whether the total figure is proportionate. If the total figure is not proportionate, the court should make an appropriate reduction.”

So whose ready for the costs wars to break out? Those that wrote these rules?

“there may be a period of slight uncertainty as the case law is developed. … The law on proportionate costs will have to be developed on a case by case basis. This may mean a degree of satellite litigation while the courts work out the law, but we should be ready for that, and I hope it will involve relatively few cases.”

Book your QCs now as they’ll be busy!

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