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Civil justice, costs reforms and Jackson/LASPO update

Costs budgeting: latest cases

Since our last Brief, the High Court has provided some insight on the likely approach to costs budgeting and costs management orders.  In this case, the claimant’s costs budget came in at £1.6m whilst the defendant’s budget was £5.6m.  Due to the significant discrepancy between the parties’ budgets the court believed it was appropriate to order a separate costs management conference.  Further, whilst most costs management conferences will take place over the telephone, the court directed this was a case where a hearing was necessary and the court allocated over two hours for that to take place.  Dahabshiil Transfer Services v Barclays Bank (2013)

Court fees: Government consultation

A government consultation on proposals to increase court fees has recently closed. The aim of the proposed fee increases is to move to a position whereby the Court Service becomes self-funding. There were two parts to the consultation:

  • The first consults on increasing fees to reflect the actual cost of providing the service.

  • The second consults on the proposed introduction of “enhanced fees” whereby parties in certain types of proceedings would be expected to contribute more than the cost of providing the service. The rationale behind this is that those who use the courts should make a greater contribution where they can afford to do so.

In the first set of proposals a number of commonly used fees including issue fees, application fees and consent orders are simply increased. Of interest though is that the allocation and listing fees would be abolished as the government considers that the costs of those processes could be incorporated within the issue fee and hearing fee respectively.

The proposals for “enhanced fees” apply to three types of proceedings and mostly concern the issue fee:

Specified money claims – The proposal is to charge an issue fee representing 5% of the value of the claim for claims valued at £10,000 or above with a maximum issue fee of £10,000 (equal to the fee for a £200,000 claim)

Unspecified money claims – Two alternatives are put forward. The first is that the fee should be the same as above or, that the maximum fee should be lower e.g. £5,000 (equal to the fee for a £100,000 claim) as the government acknowledges that a £10,000 cap may act as a deterrent to bringing a claim.

Money claims in commercial proceedings – again alternatives are put forward:

  • Fees for claims over £10,000 would be 5% of the value of the claim, with a maximum fee of £10,000 (as above). However there would be a separate hearing fee based on the length of the hearing and set at £1,000 per day.

  • The alternative proposal is to apply a higher maximum fee of either £15,000 (equal to the fee for a £300,000 claim)

The consultation closed on 21 January and the government is hoping to respond to the consultation in the summer.  In an interesting turn of events, the regulatory policy committee (RPC), criticised the government’s impact assessment (IA) accompanying the consultation.  Amongst other things, the RPC expressed the view that the IA “should clearly explain how the proposed fee level was arrived at and whether other possible fee levels are being considered”.

Read the consultation and the impact assessment.   

RPC’s comments on impact assessment.

Jackson in action: Recent case law

Relief from sanctions

Service of supplemental witness statements: In Karbhari & Anor v Ahmed (2013) the High Court applied CPR r.3.9 and the guidelines in Mitchell and refused permission for the defendant to rely upon a supplemental witness statement.  The delay in serving the evidence for over 7 months was not trivial.  Turner J also observed that in cases where updated statements might be required, the original order should incorporate a “backstop date” for service of supplemental statements, limited to those matters which occurred or were reasonably discoverable only after exchange of statements first took place.

Failure to serve CFA: In Long v Value Properties Ltd & Anor (2014) the claimant was in breach of section 32.5 of the Costs Practice Direction by failing, during detailed assessment proceedings, to serve the paying parties’ solicitors with copies of the conditional fee agreements and a statement setting out the details of the success fees.  Master Rowley of the Senior Courts Costs Office (SCCO) concluded that the breach was not trivial and that the defendant was at a disadvantage by not being served with copies of the CFA.  The claimant was not granted relief from sanctions.

Failure to serve notice of funding: In Burton v Cranfied Delta Whisky Group (2013) the claimant’s solicitors failed to file form N251 after they inherited the file from another firm of solicitors, (who had served the defendant with the appropriate notice when they were acting).  The claimant’s solicitors sought relief from sanctions.  The case was heard before the Mitchell ruling, but judgment was handed down after and took the ruling into account.  Granting relief from sanctions, Master Rowley of the SCCO pointed out that it would have been a surprise to the defendant if the claimant had not agreed a CFA with his new solicitors.

Failure to serve notice of funding: In Harrison & Anor v Black Horse Ltd (2013) an application for relief from sanctions was refused by Master Gordon-Saker in the SCCO, where notice of a success fee payable under a conditional fee agreement had not been served. The default had not been trivial and no good reason for it had been established. The new version of CPR r.3.9, introduced on April 1, 2013, required a tougher approach than that which had previously been taken to relief applications.

Failure to comply with unless order: In Thevarajah v Riordan & Ors (2014) the Court of Appeal overturned a decision to grant relief from sanctions and criticised the judge's general approach to the application of CPR r.3.9 stating his approach had lacked the robustness called for by the guidance subsequently given in Mitchell, and gave insufficient consideration to the need (a) for litigation to be conducted efficiently and at proportionate cost, and (b) to enforce compliance with rules, practice directions and orders. 

Late service of expert evidence: In Chambers v Buckinghamshire Healthcare NHS Trust (2013) the claimant sought and obtained an order debarring the defendant from relying upon medical evidence that had been served out of time by one month.  The Master held that the breach was not trivial and there was no good reason for the delay.  He also dismissed the defendant’s application to extend the time for service.

General approach

Whilst not in fact pertaining to an application for relief from sanctions, we report the following case to demonstrate how pervasive the Mitchell judgment has become in the application of the CPR generally:

Renewed application for permission to appeal/test in Mitchell applied: In Webb Resolutions Ltd v E-Surv Ltd (2014) Turner J sitting in the High Court held that under CPR 52.3(5), a party in default seeking an extension of the time limit for a renewed application for permission to appeal will have to satisfy the same tests as were applied to the default in Mitchell. This waseven thoughr.52.3(5) does not provide for a specific sanction and strictly speaking r.3.9 ought not to apply.

Contact

For further information please contact Fiona James, Director, Professional Support Lawyer on 0191 233 5220 or Marcus Davies, Professional Support Executive on 0161 603 5146

By Simon Denyer

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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