How will the costs landscape unfold in 2020
By Colin Campbell, Consultant at Kain Knight Costs Lawyers, Deputy Costs Judge
(Estimated reading time: 2 minutes, 36 seconds)
What can those who practise in costs or who provide ATE insurance cover, look forward to in 2020, or is there anything about which they should be wary of? Here are some predictions from Colin Campbell, one of the leading figures in a topic at the heart of litigation.
To answer that question, we need to look back at three areas in which the Court of Appeal gave important judgments in 2019.
First, West and Demouilpied v Stockport NHS Foundation Trust concerning After-the-Event Insurance in clinical negligence claims. Our prediction here is that West has closed the door on ATE challenges which will no longer be routinely raised by paying parties at detailed assessment, in particular where NHS Trusts have been ordered to pay costs. Instinctive and subjective judicial reactions to premiums cannot be advanced any more. A paying party must instead adduce expert evidence where a premium is disputed.
Second, proportionality at detailed assessment. In West, the court also gave guidance about how CPR 44.3(5) and CPR 44.4 should be applied by costs judges. This involves a 3 stage approach.
- First, a line by line assessment for reasonableness.
- Then at the end, a proportionality check-up with indivisible items such as court fees and ATE premiums left out of the account – with the rule applied to the remaining figure.
- Finally, if items in different categories such as disclosure or experts’ reports still appear disproportionate, reduce these.
Will it make costs more predictable? In the sense that if you have a clinical negligence claim with damages paid of £15,000 but costs of £50,000 to recover them, would the test provide all the answers? No fear is the prediction. What might be a proportionate figure for assessed costs to one judge may be wholly disproportionate to another judge, so the game of uncertainty goes on.
Thirdly, offers to settle under Part 36. When is a Part 36 offer not a Part 36 offer meaning that the benefits conferred by CPR 36.17(4) (additional 10%, enhanced interest etc) are not payable?
The answer to that is that if words such as “this offer excludes interest” are used, the offer is not one that is effective under the rule. So said the Court of Appeal before Christmas in King v City of London Corporation – holding that offers which trespass outside the strict boundaries of CPR 36.5, cannot be valid offers under Part 36 and so do not confer the benefits under CPR 36.17(4) if the offeror betters the offer at trial or detailed assessment. Prediction: no wriggle room left. CPR 36.5 means what it says. Don’t follow it and your offer will be valid but not under Part 36. A scramble of corrective Part 36 offers is to be expected in 2020.
Finally a crystal ball gaze into Fixed Costs under CPR 45. For years practitioners have been steeling themselves for their introduction in clinical negligence. Claims up to £250,000 have been mentioned as being vulnerable although Sir Rupert Jackson appeared to back-paddle on that. With Brexit off the table for the time being, the legislative timetable might permit the introduction of fixed costs in claims up to £100,000 from October. Watch this space!