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Darren Lewis

Introduction

Yesterday (10th May 2023) the Civil Justice Council published their Review which considered 4 aspects of the Civil Costs Regime.

  1. Guideline hourly rates
  2. Costs budgeting
  3. Pre-action and digitisation
  4. Consequences of the extension of fixed recoverable costs

It’s important to state that these are recommendations only and need approval. Some will require more fleshing out and some will require Pilot Schemes to test them. That said, they represent a powerful and persuasive consensus amongst senior and regional costs judges and practitioners. We are likely to see all or most of these recommendations entering the CPR in the near future.

This article provides a brief summary of recommendations for the first 3 points. The latter having been well ventilated already.

Costs budgeting recommendations

  1. Costs budgeting is here to stay but there is a move from the “one size fits all” model depending on types of work and court venues.
  2. The Council highlighted (among others) personal injury and clinical negligence work (covered by QOCS) as one area where the costs management regime may depart from the norm.
  3. Where QOCS applies defendant’s full costs budgets are likely to be dispensed with. Only precedent H front sheets will be required (with power for the court to require full budgets). From counsel’s perspective as with present cases worth less than £50,000 whilst a full budget is not required it is and will certainly be useful for counsel to have the full budget in seeking to defend it.
  4. “Costs budgeting light” for cases worth between £100,000 and £1m. This will be a process which is lighter touch than the current full costs budgeting process. A majority of the Council supported the inclusion of personal injury in this process but there was not unanimity.
  5. Possible splitting of CCMCs. A staged approach to costs and case management where earlier and quicker case management takes place first resolving issues between the parties and allowing for more focussed budgets to be filed not accounting for so many variables. It should be noted other Council members firmly supported case management and cost budgeting at the same time. From counsel’s perspective the proposal is valuable in personal injury cases where all too often big disputes on expert evidence or split trials either result in wildly divergent budgets or multiple variables based on the alternatives.
  6. A power for judges who are case managing to refer costs budgeting to specialist judges eg SCCO or regional costs judges.
  7. Potentially earlier deadlines for budget discussion reports to allow longer negotiations.
  8. Simplification of the precedent T process for varying budgets.
  9. Possible penalties for those who default on the budgeting timetable leading to wasted court time.
  10. Potential changes to the budgeting process in approach to hourly rate and incurred costs. From counsel’s perspective this is a potentially very wide-ranging change to which the council have provided little detail. Courts are rightly always at pains to say they do not set hourly rates so this would be a potential sea-change.

Guideline hourly rates recommendations

  1. Guideline hourly rates are here to stay.
  2. Hourly rates should be subject to appropriate annual index (SSPI) linked increases on the 1st January each year.
  3. Retrospective uplift of 2021 GHRs having regard to SPPI.
  4. There should be another overarching detailed review of GHR after 5 years and every 5 years after.
  5. Counsel’s hourly rates are to be included in the system for the first time. The Council appreciate the dangers of complexity of this process and inflation of fees but they state this is their firm direction of travel.
  6. The creation of a higher band for specialist, complex, high value, commercial work.
  7. Respondents: made a strong push for GHRs to be the same in and out of London. The Council thinks it’s too early to take such a step.

Pre-action and digitisation recommendations

  1. Claims where a pre-action protocol allows for recovery of costs where there is settlement at the pre-action stage will be considered “issued” at the point the PAP commences.
  2. Potential changes to the Solicitors Act 1974 and outmoded definitions of “contentious” and “non contentious” costs. (input is sought on amendments from potentially the Law Society or the Law Commission)
  3. Potential changes to CPR 46.14 to deal with the incidence of costs where parties have settled the substantive dispute but where there is no agreement on who pays.

Conclusion

Overall this represents valuable efficiency savings and potential quality of life improvements in costs budgeting. Index linking GHRs  rates with increases every year is good news for solicitors. The Bar will not be thrilled to find our hourly rates included in budgets but it appears this is non-negotiable!

11th May 2023

Darren Lewis, Deputy Head of the Personal Injury team & costs barrister