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Costs: Looking forward to 2019, what might be in store?

By Colin Campbell, Consultant at Kain Knight Costs Lawyers,
Deputy Costs Judge and mediator in costs at CADR.

A new year. What can those who practise in costs or who provide ATE insurance cover, look forward to in 2019, 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.

We are now in the tenth year since Sir Rupert Jackson completed his report into the costs of civil litigation and the impact of his recommendations are still being felt. Indeed, they are at the heart of these predictions.

Proportionality. The rule was re-worded with effect from 1 April 2013 – see CPR 44.3(5). Sir Rupert said that Court of Appeal decisions would be needed to give guidance about how the rule should be applied but, so far, there have been none. Indeed, that court has gone out of its way not to do so (permission to appeal in May v Wavell Group was refused). Nonetheless, it is to be hoped that in twelve months’ time, some authoritative guidance will be available at High Court level, with particular reference to how the rule should be applied in difficult clinical negligence claims where the costs are high in relation to the damages recovered.

Costs Budgeting and sanctions. Another Jacksonism. Forget to file your costs budget in time under CPR 3.13 and your recoverable costs going forward are limited to recoverable court fees under CPR 3.14. Whether or not relief from that sanction will be given is something of a lottery and often depends upon the identity of the judge who hears the application. Contrast Lakhani v Mahmud [2017] 4 Costs LO 453 (one day late – no relief) and Mott v Long [2017] 4 Costs LR 817 (10 days late – relief granted). Following BCME Bank v Phoenix Commodities PVT Ltd (2018) 6 CLO on 19 October (14 days late, as the partner was away on business – no relief), it would appear that the tough line will be the norm in 2019.

Part 36 offers. Since it was implemented, there have been more judgments about this rule than any other, and there is nothing to suppose that this will not continue. The reason?
Part 36 has been constantly tinkered with and, with every tinker, the scope expands for arguing about what the rule means and its consequences. Finnegan v Frank Spiers (2018) 6 CLO provides a flavour: on acceptance of a Part 36 offer, the court cannot order an interim payment. Watch this space for loads more Part 36 decisions in 2019.

The Electronic Bill. This is the Jackson recommended replacement for the paper bill (“like a Victorian Account Book” he said), which has been compulsory for all work done since 6 April 2018, but none have yet been assessed at the Senior Courts Costs Office. The profession deliberately and studiously avoided any dealings with the electronic bill when it was piloted in the SCCO for two years. Now is the time when the bullet will have to be bitten and 2019 will undoubtedly be the year of the electronic bill, UNLESS…

Mediation in Costs. …Why have an electronic assessment when you can have a confidential costs mediation when you like, where you like, before whom you like, for as long as you like and at a cost that you like? Mediation in costs is a growth area and practitioners, horrified by the expense of electronic bills and the potential duration of electronic assessments, will use 2019 to move into ADR. No nasty proportionality rule surprises at mediation and no risk that your ATE insurance premium will be savaged because of the conflicting decisions which await clarification (hopefully) in 2019 by the Court of Appeal in West v Stockport NHS Foundation Trust. The parties remain in control, not the court.

To what extent will these predictions come to pass? Look for a review in six months’ time to see whether they do!

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