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.
See Proclaim’s press release on Litigation Futures
The Civil Procedure (Amendment No. 4) Rules 2015 have been published and come into force (with exceptions) on 1 October 2015. The amendments provide, amongst other things, for the provision of a “a breakdown of the costs claimed for each phase of the proceedings” to accompany a bill of costs in all cases where a costs management order has been made.
The purpose of the change is to bring the assessment procedure into line with the requirements of costs management, to enable instant comparison between the costs being claimed and the receiving party’s last approved budget. For the present, the requirements for the format of the bill itself remain unchanged. However, this is only temporary.
The Jackson Review EW?UTBMS Development Steering Committee, chaired by Alexander Hutton QC, is shortly due to make detailed recommendations to the Rules Committee for a new format bill of costs which will be “informative and capable of yielding information at different levels of generality“. A pilot is expected to run from April 2016.
In his recent Harbour Lecture, Lord Justice Jackson, said…
“The new scheme will work as follows. The J?Codes are designed to be compatible with commercial time recording software. Participating solicitors will adapt their time?recording systems by using the following codes. A number with J as prefix denotes a task (i.e. the subject matter of the work). A number with A as prefix denotes an activity, i.e. what you are doing within that subject matter. For example, if you wish to record your time drafting a witness statement as a result of an earlier meeting with the witness, you would select your Task Code as JG?10, defined as “Taking, preparing and finalising witness statement(s)” and then select your Activity Code as A103, namely “draft/revise”. There is therefore no need to select a Phase Code, only a Task Code and Activity Code as the Task Code always includes the Precedent H phase within it (in the above example, JG?10 relates only to Witness Statements). Thus all time?recorded work is assigned to the Precedent H phases. You can then additionally enter manually on the time recording system for that same entry as detailed a description as you wish of the particular work done, such as “drafting the Claimant’s witness statement, including…”
These are radical changes and practitioners are being urged to plan ahead in order that they are not caught out.
Other amendments include…
- amending rule 3.1 (court’s general powers of management) to make it clear that the court’s powers include hearing an Early Neutral Evaluation;
- inserting a new rule 3.1A making provision for the way in which the court is to approach case management in a case where at least one of the parties is unrepresented;
- inserting in Part 5 a cross-reference to provisions which disapply, or apply with modifications, provisions in that Part about access to court documents;
- amending rule 7.4 to ensure that the claimant not only serves particulars of claim on the defendant, but also files them;
- inserting a new rule 52.15B covering appeals in planning statutory reviews; and
- inserting a new Part 63A to introduce a new specialist list called the Financial List, to handle the more complex and important financial markets cases.
The mandatory date for roll out of CCMS across the country is to be put back from October 2015 to February 2016. The CCMS (Client and Cost Management System) is an online system for civil and family legal aid providers and others assigned to work on their cases, e.g. advocates, clerks and costs lawyers. It covers the whole process for certificated civil and family legal aid work, from submitting legal aid applications to paying bills.
Unfortunately, the system which has been rolled out on a voluntary basis since April 2014 has been beset with problems and subject of much criticism.
Representative bodies including Resolution and the Association of Costs Lawyers have called the system unfit for purpose and called for the mandatory roll out to be postponed.
Jo Edwards, chair of Resolution has called the system “nothing short of a national scandal” continuing:
“My message to the Legal Aid Agency is simple – just because something works for you, doesn’t mean that it works… There may have been some improvements in CCMS as a result of our work, and we welcome this. But if the system is rolled out in its current form, there will be untold difficulties come October. I say to those at the LAA – you need to listen to what practitioners are saying, and act on it now, for your own sake as much as anyone else’s”
Paul Seddon, chair of the ACL’s legal aid group and author a recent ACL report highlighting the major shortcomings of the CCMS, has said in response to a recent LAA update:
“There are only five improvements listed and two of those relate to billing. These improvements seem minor, not major, and the two relating to billing are peripheral to key problems highlighted in our report. They barely scratch the surface of the work that is required to make this system acceptable to use by October 2015, and this does not give me any confidence that the necessary fixes are going to be made in time (if ever).”
It would seem that the LAA have listened. It is hoped that significant improvements will have been made by February 2016. Otherwise, it is likely that calls for a further postponement of the rollout, if not a scrapping of the system altogether, will be called for.