Don’t bury your head in the sand!

Last night I went to a regional meeting of the Association of Costs Lawyers in Liverpool. It was the first event of this kind I had attended for some time, and it was well worth the effort.

There were two speakers:  Erica Bedford and Kevin Latham, both of Kings Chambers and both specialising in costs. I have heard Erica speak on numerous occasions and have even been against her on one occasion many moons ago. I have not heard Kevin speak before. Both, however, provided very useful and enlightening information which we could and should all learn from.

I will come to Kevin’s topic first. He talked to us about the “Dos and don’ts” of detailed assessment. Now, I have been doing this job for the best part for fifteen years and I like to think I know my stuff. But it never hurts to get some insight as to how an advocate thinks you should run your case to maximise the benefits to your client, whether receiving or paying party. We all draft bills of costs, points of dispute and replies regularly during the course of our work. But do we become complacent? Do we think about why we are drafting them? Perhaps, at least to some degree.

Kevin gave plenty of tips, many of which should be obvious but some of which we sometimes might forget along the way. They included:

  • Draft points of dispute and replies for the judge, not for your opponent
  • When drafting, think about what you want the judge to do
  • In the points of dispute, tell the judge which filters you want him/her to apply in an electronic bill
  • Remember, at the end of points of dispute, to return to the issue of proportionality and include a figure over which you submit that costs are disproportionate and should be reduced
  • Make concessions in replies to show you are taking the process seriously
  • Give proper explanations, for example if costs have been incurred which look unreasonable and/or disproportionate but for which there is actually a good reason
  • Make sure the bundle at the detailed assessment hearing complies with the rules
  • If you are using an electronic bundle, paginate the index
  • Make sure the bundle follows the points of dispute
  • If you are attending the hearing as an advocate, READ EVERYTHING
  • Have details of offers and payments on account of costs ready at the hearing
  • Check and double check the final order

Erica talked about the seismic changes in costs, some of which have just happened, and others of which come into force in October.

The changes to the QOCs rules came into force on 6 April this year and mean that costs orders against a claimant can now be set off not just against damages awarded but also against any orders, costs and interest made in favour of the claimant. We all know that, but have any of us really thought about the impact of that change?

Erica highlighted the fact that the wording of solicitors’ retainers (and, in particular, CFAs) MUST change in light of the changes to the QOCs rules because the client could potentially be personally liable for their solicitor’s costs in situations where an early offer was not accepted and any liability of the defendant to pay the claimant’s costs is wiped out by an order for costs in the defendant’s favour.  There has been a win, but the only option for the solicitor is to go to the client for payment.

Clearly, in the circumstances outlined above, a client is going to be less than happy. Not only have they lost all their damages because they have been set off against the defendant’s costs, but they also had to find money to pay their solicitor. So, whilst the claim succeeded, because an early defendant offer was not beaten, they will end up out of pocket, probably by many thousands of pounds.

What does this mean for claimants and their solicitors? Well, it is likely to lead to more solicitor and client assessments when claimant clients seek to challenge their solicitors’ fees. It will probably also have to lead to a significant change to the ATE (after-the-event) insurance market to allow for such eventualities. But who will pay for that? The client, of course.

Ignore the implications of the changes at your peril. Start thinking about them now so that your retainers are set up to deal with adverse costs in QOCs cases.

Erica then went onto talk about the changes, amongst other things, to fixed recoverable costs which come into force on 1 October this year. For us as costs lawyers, her comments provided some comfort because, rather than fixed recoverable costs leading to the end of our industry, Erica suggested that there are likely to be significant arguments about where a claim falls. For example:

  • If there are factors other than value to take into account, should the claim be allocated to the Fast Track, Intermediate Track or Multi Track?
  • If it falls into the Fast or Intermediate Track, which complexity band does it fall into?
  • What constitutes a complete admission of breach of duty and causation in a clinical negligence case?
  • Has a claimant pleaded a point in a clinical negligence case which should not have been pleaded and was clearly only intended simply to force the case out of fixed costs and into the Multi Track by virtue of the fact that causation would not be admitted in full?
  • When should you issue proceedings in a case which might or might not fall into fixed recoverable costs?
  • If cases are issued early so as to minimise work being done outside the scope of fixed costs, will that result in defendants arguing that proceedings have been issued prematurely?

Many of the above questions, and probably others, are likely to be decided in court, and costs professionals will no doubt be involved in the process.

Erica also talked about conversations being had about changes to the budgeting rules where QOCs apply, changes to the Guideline Hourly Rates (particularly in heavy commercial cases outside of London) and an amendment to CPR 46.14 which, when it comes into force, is going to allow a court to determine not just the quantum of pre-issue costs, but also the incidence of them, which could potentially have dire consequences for some.

So, costs lawyers, keep smiling. There will be plenty of work out there to keep us busy. And solicitor clients, do not be complacent. Look at the new rules and think about their impact, not just in respect of how much you will be paid, but also how you can make sure that you do get paid.

Lastly, thank you, Erica, and Kevin, for two excellent talks. They certainly made me sit up and think.

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