Costs budgeting - DAC Beachcroft

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Costs budgeting

Published On: 1 October 2015

The Civil Procedure Rule Committee (CPRC) has approved a range of changes to costs management proposed by a sub-committee led by Mr Justice Coulson to deal with the significant delays now being faced in the pre-trial process, and also in view of the "significant hostility that costs management has now created". 

The changes proposed are:

  • Cases involving children should be excluded subject to judicial discretion in individual cases;
  • Other personal injury cases including those involving protected parties, clinical negligence or cases involving adults should remain within the scope of costs management;
  • Cases involving terminal illness or short life expectancy should be dealt with by disapplying costs management or dealing with it on paper;
  • No specific provision needed for split trials;
  • The existing £10 million value limit (below which costs management is to be regarded as normal) should remain;
  • Defendants to continue to provide costs budgets;
  • Budgets to be filed and exchanged 21 days before the case management conference to allow the parties time to agree budgets, or as much of them as possible;
  • The practice direction should make it clear that the court's approval relates only to the total for each budget phase not the detail;
  • It should remain a matter of judicial discretion whether to deal with costs management on paper;
  • Precedent H should be improved. Contingencies should apply where an outcome is more likely than not.  Schedules of assumptions should be limited;  
  • No changes to be made to Rule 3.18 (assessment of costs where a costs management order has been made);
  • No changes in relation to incurred costs – to be dealt with at detailed assessment as currently;
  • Form H to be simplified for cases up to £50,000 in value (currently £25,000). Fixed costs to be introduced as soon as possible for such cases;
  • Costs capping rules should be removed.

The amendments are to be prepared for consideration at the October meeting.

The minutes also note the Department of Health proposals for fixed recoverable costs in clinical negligence cases up to a value of £100,000 although these proposals are at a very early stage currently with consultation planned for Autumn 2015 (with views to be canvassed on claims up to £250,000). These rules are intended to be implemented by October 2016.

In the meantime, costs budgeting is to be suspended for High Court clinical negligence cases and will not be applied to cases listed for costs hearings between October 2015 and January 2016. This is intended as a temporary measure only in order to clear the backlog of cases. This change appears to have been brought about following Lord Justice Jackson's Harbour Litigation Funding lecture in May 2015, in which he called for a one off release from costs budgeting for all medical negligence cases in this category due to the very lengthy delays.

Master David Cook of the High Court Queen's Bench Division has suggested that lawyers should consider asking to waive costs budgeting if it is leading to injustice, with instances of parties having to wait up to 9 months for a hearing. Master Cook has explained that in his experience of 220 costs budgets, only 10 of them saw the parties agree on a budget. In the remaining 210 hearings, advocates appeared to be coming at the process the wrong way and he has noticed that one excessive area of spending is with witness statements. 

The truth is judges are finding themselves overwhelmed by a massive backlog of contested costs budgeting hearings but despite this, there is still support for the costs management regime and it is clearly here to stay.