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Costs Aware | July 2020
Welcome to the latest edition of Costs Aware.
If you want to know more about any of the topics discussed, or anything else in this diverse field - please contact the team.
One of my favourite films as a teenager was Ferris Bueller’s Day Off, starring a very young Matthew Broderick. I considered Ferris a ‘cool’ guy – he was engaged throughout in bold and exciting situations instead of being where he should have been… at school! I frequently watched the film in my youth, dreaming of a life where I would no longer have to be at school day in, day out, and could have similar adventures to Ferris.
‘Discussion and negotiation, with litigation as a last resort’, is a fundamental tenet enshrined in the CPR and drummed into me right from the start of my career some 30 years ago. It remains as fundamental now as it did then. Sadly, it is a direction often ignored by some claimant solicitors. The rush to issue proceedings carries with it a risk that such proceedings will be considered to be premature, but with a potential great ‘prize’ by way of higher profit costs.
The Rules regarding costs management are very clear and well understood, but there are still numerous incidents of budgets being filed or served late. In cases with a pleaded value of £50,000 or less the budgets are to be filed and exchanged with the directions questionnaires. For all other cases they are to be filed and exchanged 21 days (and that is ‘clear’ days, see CPR 2.8(2)) before the first CMC, unless the court orders otherwise.
As part of Keoghs continuing strategy to drive down claims spend, bespoke training is delivered to increase awareness of trigger-points and tripwires where input from a costs specialist is necessary. Where there are multiple defendants to a claim in areas such as casualty or disease litigation, the costs position at conclusion can often become messy. Sometimes the unsuccessful defendant is required to meet the costs of all parties; at other times, multiple unsuccessful defendants argue amongst themselves over who is paying what proportion of the successful claimant’s costs. This area is ripe for misunderstanding and exploitation.
Two recent High Court decisions have put defendants who decline ADR and want to defend claims at trial at a far higher and unfair risk of an Indemnity Costs Order being made against them.
In Lejonvarn v Burgess  EWCA Civ 114, the Court of Appeal ordered indemnity costs in favour of a successful defendant where the claimants should have known their claims were weak.
Fixed costs regimes are often predicated on intricate rules that are difficult to navigate. The law also moves on quickly via regular updates to the Civil Procedure Rules and a constant stream of case law. I am frequently asked to advise on low value claims where a receiving party has acted unreasonably in bringing a claim outside of a fixed costs regime that otherwise would have applied but for the conduct complained of. When conduct is in issue on low value claims, identifying the starting point for costs and the remedies available can be somewhat confusing. I find that considering questions examined by greater minds than mine helps establish some basic principles to use as a springboard.
The proportionality test has reached its 21st birthday, having been introduced in the Woolf Reforms and implemented in the CPR in 1999. Despite its age, no one really knows what it means or how it is supposed to work in practice.
It’s fair to say that the costs budgeting regime has achieved some success in containing costs before they are incurred. It works well in a properly budgeted case that follows the anticipated trajectory to resolution. The case will have satisfied the assumptions made against which the budget was drafted and followed the procedural course set out in court directions.