In our article How Relevant Is The SCCO Guide To Hourly Rates we looked at three cases in which two High Court Judges and the Senior Costs Judge independently commented on the passage of time since the guideline rates were last updated in 2010 and, consequentially, their relevance on detailed and summary assessments being conducted in 2020.
The Civil Procedure (Amendment No. 3) Rules 2020 and the 122nd Practice Direction Update come into effect on 1 October 2020… the most notable change is the introduction of the new formal procedure for varying your costs budget and imposition of a mandatory duty on parties to do so where there is a significant development in the litigation.
The SCCO Guide To Hourly Rates was last updated in 2010. In 2014 it was reviewed by the then Master of the Rolls, Lord Dyson MR, but left unchanged due to a lack of reliable evidence.
But how relevant is the guide five years on?
Lord Justice Jackson has released his Review of Civil Litigation Costs: Supplemental Report – Fixed Recoverable Costs.
Jackson LJ has delivered his Keynote Address on the Review of Fixed Recoverable Costs.
Costs Judge, Master Simons, has slashed a Bill of Costs from £72,320 to £24,600 in a clinical negligence case which settled for £3,250. The reductions were made at provisional assessment and, aside from some minor increases, were maintained at an oral hearing.
For a third time, the NHS Litigation Authority (NHSLA) has defeated a claim for additional legal costs liabilities brought by Irwin Mitchell.
All three cases involved clinical negligence disputes in which Irwin Mitchell advised their clients to switch their claim’s funding from legal aid to a conditional fee arrangement (CFA), supported by after the event (ATE) insurance. In each case, this funding transfer took place shortly before LASPO came into force on 1 April 2013, which rendered such expenses unrecoverable.
In this latest case, Yesil v Doncaster NHS Trust, Regional Costs Judge Besford agreed with the NHSLA that it was unreasonable for the claimant to switch their funding in this way. Consequently, DJ Besford said that the additional costs claimed by the claimant as a result of the switch should be disallowed. Combined, the disallowed costs amounted to more than £105,000 – a success fee of £55,522.56, and an ATE premium of £50,681.78. The total costs claimed in the case were £350,856.
In all three cases in which the NHSLA has successfully defeated Irwin Mitchell’s additional costs liability claims, Surrey v Barnet & Chase Farm Hospitals NHS Trust  EWHC B16 (Costs) (10 August 2015), AH v Lewisham Hospital NHS Trust  EWHC B3 (Costs) (12 January 2016), and now Yesil v Doncaster NHS Trust, the presiding costs judge has criticised the firm regarding the advice it gave to the client prior to their funding switch decision.
In Yesil v Doncaster NHS Trust, Irwin Mitchell justified its advice to its client by arguing that the switch guaranteed the claimant’s case would be funded. However, what the firm failed to advise its client was that, by switching to a CFA-based funding arrangement, the client was also abandoning their right to obtain a 10 per cent uplift in damages if successful – which would have been worth around £28,000.
This advice omission prompted DJ Besford to question the adequacy of the advice given to the claimant by Irwin Mitchell. He went on: “Irwin Mitchell would appear to have been not so much ‘leaning’ one way, as giving advice tailored to a decision they had already made.” The need for transparent advice was particularly important in this type of case, he added, “where one of two or more options available to a client is more financially beneficial to the solicitor”. “Further,” he stated, Irwin Mitchell had “produced no evidence either by way of file notes, copy letters or even a witness statement from the client as to the advice tendered. In my judgment, the decision to switch was not self-evident or transparent.”
The 83rd Update to the Civil Procedure Rules comes into force on 1 and 6 April 2016. This includes important changes to Part 3 – The Court’s Case Management Powers – and Practice Direction 3E – Costs Management Powers – and Practice Direction 3E – Costs Management. In summary:
Only the first page of Precedent H is to be exchanged and filed in cases where the value of the claims is under £50,000 or the costs are less than £25,000.
Claims made on behalf of a child are also excluded from the regime, and in cases where the Claimant has a limited or severely impaired life expectation the court will ordinarily disapply cost management.
Amendments are also made to the point at which a costs budget must be filed. For lower value claims the budget must be filed with the Directions Questionnaire, for other claims it must be filed 21 days before the case management conference.
Agreed budget discussion reports must be filed seven days before the first hearing.
Amendments are also made to provide that costs claimed in each phase of the proceedings, are made available to the court when assessing costs at the end of a case. Consequential amendments are made to Practice Direction 3E.
The Civil Procedure Rule Committee (CPRC) has decided to bring forward the timetable for filing costs budgets, the minutes of its 13 November 2015 meeting reveal.
Currently, CPR 3.13 states that the last possible date for filing and exchanging a costs budget is seven days before the first case management conference (CMC). However, under draft plans agreed by the CPRC at its November meeting, two alternative filing deadlines are to be imposed. For claims with a monetary value worth more than £50,000, the deadline for filing budgets has been brought forward considerably – to 21 days before the CMC. For lower value claims, budgets are to be filed even earlier – with the directions questionnaire.
It is understood that the CPRC’s decision to treat claims with a monetary value of more or less than £50,000 differently was a compromise within the Committee. Most CPRC members are believed to have favoured a 21 day deadline for all claims made within the costs budgeting process, while others wanted the filing deadline bought forward to an earlier time. It is not yet clear when the agreed CPR change will enter into force.