Harmans Costs Brief - January 2015


Fresh for 2015 - Costs Brief is back!  2015 is promising to be another busy year for Harmans, we're already planning our next free Costs seminar as well as some developments to our very popular app Costs Expert which surpassed even our high expectations in 2014.  If you haven't downloaded it yet then why not?  It's free and the costs calculator will save you bags of time - download details are below.

Don't worry we haven't forgotten all the other industry news and comment on Costs, we hope you enjoy the read.

Many thanks, Harmans Costs

For even more news and comment visit our website
Nishma Shah looks at recovering insurance premiums post LASPO

Under section 46 of LASPO, for the vast majority of ATE Policies incepted or issued from April 2013 onwards, the premium will no longer be recoverable from the losing Opponent.

There are some exceptions to this rule, in that Asbestos related disease claims and publication proceedings still allow ATE premiums to remain recoverable. Insolvency proceedings also allow ATE premiums to be recovered however, this is only until 1st April 2015 as it stands currently, but there is already a group pressing for recoverability to continue after April.

In Clinical Negligence cases, ATE premiums are generally not recoverable inter partes except under SI 2013/739 at number 3 (1) which allows for part of the insurance premium to be recoverable where the financial value of the claim in respect of clinical negligence is more than £1,000.00 and the costs insurance policy, insures against the risk of incurring a liability to pay for an expert report or reports relating to liability or causation in respect of clinical negligence.  

Although the reports can cover additional topics such as quantum etc, the report must relate to liability or causation.

However, the liability for the paying party to pay the part of the premium is limited to the part of the premium which relates to the risk of incurring liability to pay for an expert report or reports relating to liability or causation. The recoverability of the insurance premium will only extend to the report and does not cover any additional work that the expert may do for example attending conferences and giving evidence.

There is no limit to the number of reports that can be obtained. However, if the Court does not order the paying party to pay the costs of the report, then the insurance premium in relation that report is not recoverable.

For any receiving party it is important to remember that there is: no limit on the number of reports that can be obtained, there is no requirement to give notice to the paying party, there is no limit on the costs of the medical report and the report can cover more than one aspect so long as it includes liability and/or causation.


Lord Chief Justice’s Report 2014


Cases taking longer with rise in unrepresented litigants


Cases which might never have been brought or would have been compromised at an early stage are often fully-contested as a result of the increase in unrepresented litigants, the Lord Chief Justice has said. In his annual report for 2014 Lord Thomas also warned that the take up of mediation and ADR had reduced as a result.


Lord Thomas noted that the escalating cost of using lawyers in civil litigation in circumstances where legal aid had never been available had coincided with the major legal aid reforms under the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) which took effect in April 2013. “This has resulted in a very significant rise in the proportion of litigants in person,” he said. “This increase together with the time taken to control the costs of litigation through cost budgeting has placed a considerable strain on the civil justice system.”


The Lord Chief Justice continued: “Although litigants in person have been a feature of the tribunals since their inception at the beginning of the twentieth century, outside the jurisdiction of the small claims procedure they have not been a common feature of the court system.


“Although litigants in person are not in themselves ‘a problem’ for the courts, the issue for the courts and the Government is that the system has not developed with a focus on unrepresented litigants, and there is now an unprecedented increase in their incidence. The judiciary’s view, based on inquiries it has made albeit so far unsupported by full statistical evidence, is that cases are consequently taking longer.”

Read the rest of the article and The Lord Chief Justice's Report 2014 here.

Legal Costs update by Costs Lawyer and Partner Gary Knight

Like this winter featuring the odd chill but compared to previous years nothing yet of great concern...

CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd  and Various Other Parties –Coulson J – 29/10/2014 [2014] EWHC 3546 (TCC)

A significant matter wherein the Defendant sought some £18 million from the Defendant contractor with Third, Fourth, Fifth and Sixth Parties joined.

The decision of Coulson J dealt with case management and time tables though he was also required to consider the issue of budgets. The matter had commenced at a time when the filing and exchanging of budgets was not compulsory as the mandatory limit was £2 million when the claim started (indeed the sum sought was significantly higher that the revised mandatory limit of £10 million), however the Defendant invited the court to exercise its overriding discretion to order the provision of costs budgets. The Defendant’s application was, not unsurprisingly, supported by the various third parties but opposed by the Claimant.

Two points of issue were identified:
1) Was there, in fact, any discretion?
2) If yes was the discretion fettered?

On point one Coulson J was in no doubt that the court had discretion referring to the original wording of CPR 3.12(1).

In respect of point two Coulson J was of the view that the exercise of the court’s discretion was unfettered finding nothing in the CPR to suggest otherwise.  He held that discretion “extends to all cases where the claim is for more than £2 million (old regime) or £10 million (new regime)”.

Coulson J went on to add that in cases where an application was made for the filing and exchanging of costs budgets, the court had to “weigh up all of the particular circumstances of the case” and in order to decide whether to exercise its discretion the court should be provided with such budgets.

A further point considered was a submission made on behalf of one of the Third Parties that the Defendant should provided a number of different costs budgets, dealing with the defence of the claims of the claimant, and then separately with its claims against the other parties. Coulson J agreed with the Defendant that such an exercise would be “unfair and not in accordance with the overriding objective”.

Altomart Ltd v Salford Estates (No. 2) Ltd– CA (Civ Div) – 29/10/14 [2014] EWCA Civ 1408

A number of decisions provided to remind all that Mitchell is far from gone or forgotten, the above is but one example.

The Court of Appeal considered the approach to be adopted to applications under CPR r3.1(2)(a) for an extension of time to serve a respondent’s notice.

Salford had appealed a decision to stay a winding up petition; on advice from Counsel no Respondent’s notice was filed however newly instructed Counsel took a different view thus Altomart applied for an extension of time to serve a respondent’s notice under CPR 52.5(2)(b) – the “notice” was over one month late and in reliance on Mitchell, Salford opposed the application.

As the application was not one seeking relief from sanction the COA was required to consider whether Mitchell principles where applicable at all.  Finding that the application for permission to appeal out of time was analogous to an application under r.3.9 the COA held that the application was therefore to be decided in accordance with the same principles holding that the “Mitchell principles therefore applied with equal force to an application for an extension of time”.

The COA then considered (i) the delay – 36 days late; (ii) the appeal would not be heard for some months (iii) Salford would not suffer any undue prejudice if the extension was granted.

Finding that the delay could not be described as a serious or significant breach of the rules and there being nothing else in the conduct of the proceedings or more generally that militated against granting relief the application was granted.

You can read the rest of Gary's Legal Costs update here.

Early download figures for our new app â€˜Costs Expert’
surpassed even our high expectations 
We launched ‘Costs Expert’ at the end of October - a bespoke mobile application which features the first ever interest calculator for the costs industry.  The app, available on both iPhone and android, is free and available to download now and is not only a valuable industry resource but also a useful tool to help solicitors and costs lawyers with their everyday workload.

The key feature of our app is the unique interest calculator which allows users to input various data such as date of order, amount of offer, costs to date and any payments on account to calculate totals inclusive and exclusive of interest. Previously this calculation could only be done using a complex formula (and some well educated guess work!) so we were confident that this would be an invaluable tool for users and this was backed up by some early reviews.

Download it now –
iPhone version:
Android version:


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