COSTS MANAGEMENT AND COSTS BUDGETING SEMINAR By Phil & Melanie Bingham PJ Bingham & Co Monday 20 August 2012

“…… effectively reversing the approach taken in Lownds. In this way, as Sir Rupert said, disproportionate costs, whether necessarily or reasonably incurred, should not be recoverable from the paying party. To put the point quite simply necessity does not render costs proportionate “

“Lord Neuberger did not deal with what precisely constitutes proportionate costs and how this is to be assessed” and “ ……… acknowledged that the failure to give any detailed guidance as to how the test will operate may mean …. a degree of satellite litigation while the courts work out the law”. Lord Neuberger did however inform us that 2 specific members of the Court of Appeal will sit on all appeals arising out of the Jackson reforms.

“………… a strong respect for, an inclination to uphold, first instance decisions on costs issues. When making costs decisions, first instance judges should not be looking over their shoulders, and parties should not be encouraged to appeal costs decisions.”

Costs to date are not covered by the budget but are highly relevant to the overall budget process because they will be taken into account when setting the subsequent budget.

There clearly will be extensive satellite litigation on the new proportionality Rules and on costs budgets.

The Partners are investing in a new time recording system which will be designed to assist with the practicalities of budgeting but please remember that this is just a tool, it cannot think for you.

Failure to put in a budget will result in loss of all of your costs, other than Court fees.

Proper preparation also runs into the equally vital task of keeping your eye on the ball after the budget is set.

Keeping the Client informed and advising on developments on the budget.

Costs Management comes into force at the moment on 1 April 2013.

New Rules CPR 3.11 to 3.18 New Practice Direction (3e) New form of Precedent H

Applies to all Multi Track cases commenced after 1 April 2013 in a County Court, in the Chancery or QBD (except Admiralty & Commercial Courts).

All parties except Litigants in Person MUST file and exchange costs budgets in the new Precedent H within 28 days after service of the Defence.

If a budget is not served it will be deemed served but to only comprise of applicable Court fees.

CRUCIAL: the costs budget MUST be monitored and if it needs to be revised the Court and the Defendant MUST be informed.

The Court will not deviate from the approved budgets unless it is satisfied that ‘there is a good reason to do so’ when assessing the costs.

The Court will not approve pre-budget costs they will be dealt with by way of Detailed Assessment at the end of the case, but it may ‘record its comments on them’ and ‘take them into account’ when considering whether subsequent costs are reasonable and proportionate.

There is a requirement for the Court to step back and consider if the budget is proportionate – the new proportionate. It is then required to make whatever overall reductions it deems necessary.

HHJ Simon Brown QC, May 2012 “one of the biggest scandals is the amount of time lawyers spend writing the witness statement’”.

Lord Jackson to the Rules Committee “it is normally only in heavy, high-value multi-track cases that witness statements get really out of hand”

Proposed rule change regarding factual evidence (CPR 32) allowing the court to give case management directions: identifying or limiting the issues to which factual evidence may be directed; identifying the witnesses who may be called or whose evidence may be read; limiting the length of witness statements.

a) the Costs Budget MUST be filed and served in time otherwise we will proceed to Detailed Assessment and face having the only Court fees allowed on a between parties basis, and; b) you MUST keep on top of your budget monitoring requirements, never forgetting to keep your opponent and the Court updated.

April Fool’s Day 2013

MONITOR, MONITOR, MONITOR.

MONITOR, MONITOR, MONITOR & keep the Court & Defendant informed.