Harmans Costs Brief - July 2013
Welcome to the latest edition of our free e-newsletter, Harmans Costs Brief, full of industry comment on the latest developments in Costs post-Jackson.  We hope you will find it useful. Make sure you never miss an issue by joining our fast growing subscriber list - please see below.
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The London Legal Walk 2013 - a great way to spend a Monday evening
When one of my partners, Jim Knight, mentioned the London Legal Walk I said I would take part without really thinking. It was months away after all.
Time moved swiftly on and I was suddenly reminded that I was to take part when I was presented with a t-shirt stating that I was proud to be involved and that the event was on 20th May, which was about a fortnight away.
Cue mad panic for sponsorship as a result of which several of my friends were nagged into donating a tenner each.
In the event, eight of us turned up at the Royal Courts of Justice in what proved to be ideal conditions. We arrived at about 4.30pm as we had been advised that the mad rush would start at 5-5.30pm.
At the last minute we had been told not to stand outside the Courts as there had been a security alert. We never found out what that was about.
The eight of us set off together, however, due to a congenital inability to walk slowly and to talk at the same time (multi tasking?) I began to lose the rest of the team. Before I lost them completely I did manage to lead them astray for about a kilometer having missed a right turn into Horse Guards completely.
About a quarter of the way around I began chatting to a couple of girls (Ahem, thought you couldn't walk and talk at the same time? - Editor) from a well known Central London firm who seemed to be walking at the same frenetic pace as me and from then on the walk seemed to pass pretty quickly (I bet it did - Editor) save for a traffic jam of walkers where the outward route crossed the homeward route. Apparently some 7,500 walkers took part in the event and they all seemed to be hanging around at Hyde Park Corner.
The route took us down the Embankment, through St James’ and Hyde Parks and back along the Strand. This was about eleven kilometers and the target was said to be finishing the walk in less than two hours. This I managed with about eight minutes to spare, but only, I suspect, due to the fact that the route was entirely without inclines above about two degrees.
About six minutes after I arrived Gary Knight, another one of my partners, arrived (see photograph) looking a little out of breath and announced that he had run the last couple of kilometers so as to achieve a sub two hour time. Very impressive and unfortunately he may have set a precedent for next year. Let’s hope that this doesn’t degenerate into having to train for the event.
A few drinks followed at the Law Society (one of which was free to walkers) followed by a train ride home and a couple of days of stiff legs and war stories.

The London Legal Walk 2013 raised an estimated £575,000 which is used to support law centres and legal advice agencies in London and the South East by providing them with grant funding alongside other forms of support.

See you next year!

The future, just how will the Judges Manage?

From attending numerous seminars on costs over the past few months and having attended the recent Association of Costs Lawyers Annual Costs Conference it is clear that there is a collective will on the part of the judiciary to get to grips with managing cases post 1 April 2013.

There is, in my view, a clear message that the previous “applicant friendly” approach to Relief from Sanction applications is to be a thing of the past.

There will be much greater emphasis placed on case management to ensure costs are proportionate and indeed early emphasis is found in the overriding objective which states:

1.1.(1) These Rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly and at proportionate cost.

The Costs Rules as amended provide further evidence of things to come:
“Conduct” of litigation by the parties will assume greater importance as “the court must have regard to it in deciding what order (if any) to make about costs”: CPR 44.3 (4).
CPR 44.3 says: “(2) Where the amount of costs is to be assessed on the standard basis, the court will—(a) only allow costs which are proportionate to the matters in issue. Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred; and (b) resolve any doubt which it may have as to whether costs were reasonably and proportionately incurred or were reasonable and proportionate in amount in favour of the paying party. (Factors which the court may take into account are set out in rule 44.4.)”
CPR 44.3 then defines “proportionate”: “(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.”
As HHJ Simon Brown QC recently commentated in his excellent series of online articles for New Law Journal, “This means that the hitherto binding Court of Appeal authority of Lownds v Home Office [2002] EWCA Civ 365, [2002] 4 All ER 775 which laid down the criteria of necessity and reasonableness is to be sacrificed on the new altar of proportionality”.
To read the rest of Gary Knight's detailed article just click here.

Mary Collins considers yet more uncertainty arising from the
new rules post-Jackson 

The Summary of the changes to Part 47 on the Ministry of Justice’s website states, in relation to points of dispute/replies, that they must be “short and to the point”:

The rules relating to assessment of costs are redrawn to ensure that material presented to the court is relevant to the particular bill of costs and sets out any contentions clearly and concisely. Referral to authorities, quoting of well known judgments and explanations of and responses to individual points of dispute are discouraged.

This leaves both the receiving party and the paying party with something of a dilemma, especially where the matter will be dealt with by provisional assessment in a County Court by a District Judge who may have had little training and will have little time set aside to deal with the assessment of some quite large bills. 

Whilst we all welcome some clarification, albeit commentary not authority, none of us can be confident that those making decisions will have the training and familiarity with the authorities and “well known judgments” that is necessary.  Will they have the time or the will to seek out and read the authorities, rules?  At least we did have the opportunity on detailed assessment to be heard on the relevant case law and authorities. 

In the very dim and distant past we attended ‘taxations’ with absolutely no warning about the issues that might be raised on a bill and often found that the District Judges were ill informed/ ill prepared to deal with those that arose.  It truly was, in those days, a case of the best advocate with the most knowledge that won the day. 

Once Points and Replies were introduced we often received points of dispute which ran  to two or three pages explaining the background and quoting big chunks of Lownds or some such well known decision -  my usual response to which was that neither I nor the court required educating.  At the other extreme we often have points that are short and to the point and say “not recoverable inter partes” to which my response is “Why not”.
To read the conclusion of Mary Collins' article just click here.

Legal update by Gary Knight, Partner and Costs Lawyer 
The legal profession awaits key decisions from the courts by way of early case law to assist with the interpretation of many of the ambiguous issues that appear to arise following the new rules and directions which came in to play on April 1; some guidance as to how the new “proportionality” test will be applied would be welcome and just how will the courts deal with relief from sanction applications and costs in excess of approved budgets from this point forward; unfortunately it is likely to be some time before post “Jackson Day” issues reach the stage where an appeal or appeals will be appropriate; fortunately, however, until such time there are still judgments to consider and decisions to digest.

One decision eagerly awaited by both claimant and defendant solicitors related to two matters heard together before the Court of Appeal namely Flatman (“F”) v Germany [2013] EWCA 278  an unconnected case of Weddall (“W”) v Barchester Health Care Limited.

Both F and W had instructed GMS Law (“GMS”) and both cases had been unsuccessful with adverse costs orders against each claimant. Both claimants had proceeded under a CFA however neither claimant had after the event insurance. 

The appeals focussed on applications for discovery of funding arrangements made by unsuccessful claimants in personal injury litigation and the extent of such discovery and to what extent solicitors acting on behalf of the claimants can fund or, as described by the COA, “prime the pump” litigation for those of limited means when proceeding pursuant to a CFA with no “after the event” insurance cover without exposing themselves to adverse orders for costs should the claims fail.

To read the rest of Gary's legal update just click here.
Mat Knight asks are costs reasonable and proportionate simply because they fall within the scope of an approved budget?

The answer to this question appears to be no in light of the recent case of Troy Foods –v- Manton [2013] EWCA Civ 615, in which Lord Justice Moore-Bick gave permission to appeal a costs management order made by HHJ Kaye QC in the Leeds Mercantile Court pursuant to the pilot scheme contained in Practice Direction 51G (Costs Management in Mercantile Courts and Technology and Construction Courts).

The case related to a claim for damages for breach of contract. Proceedings were issued in May 2012, and following revised budgets being produced by both parties in light of their comments in relation to the original budgets, the matter came back before the court at the adjourned case management conference on 18 December 2012.

HHJ Kaye QC approved the whole of the Defendant’s budget, but only approved part of the Claimant’s budget which included the elements relating to the witness statements and Counsel’s fees.

The Defendant felt that HHJ Kaye QC adopted the wrong approach and was too generous in approving the amounts allowed in the Claimant’s budget for preparing witness statements and Counsel’s hourly rate.

The Defendant’s concern was that, on a detailed assessment, costs judges are likely to treat the approval of a budget, or any relevant part of it, as ipso facto establishing that the costs incurred in respect of the matter generally, or that particular elements of it, are reasonable if they fall within the approved budget.

Click here to read the rest of Mat's article.

Harmans are always on hand for any questions or queries you may have and we will do our utmost to help you with any problems you may encounter post Jackson. We are also geared up to assist you in dealing with your costs budgets whether it be the actual preparation or advice for the completion of the document.  We are continually updating our website with news and developments as well as sharing our views on Twitter and LinkedIn.


Follow us on Twitter @HarmansCosts for the latest industry comment.  We also hold regular Q&A sessions when you can tweet or DM our legal costs experts a question - join us for our next session on Tuesday 9 July at midday.
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