14 May 2015Print This Post

MR questions Jackson’s call to give courts costs management ‘opt-out’

Jackson: within 10 years costs management will be accepted as an entirely normal discipline

Jackson: within 10 years costs management will be accepted as an entirely normal discipline

The Master of the Rolls, Lord Dyson, yesterday expressed misgivings over a recommendation from Lord Justice Jackson that the court should not seek to manage costs “if it lacks resources to do so without causing significant delay and disruption to that or other cases”.

However, both emphasised their strong support for the principle of costs management, with Jackson LJ predicting that within 10 years it will be accepted as an entirely normal discipline “and people will wonder what the fuss was all about”.

The pair were speaking at the annual Harbour Litigation Funding lecture at Gray’s Inn, with the architect of the 2013 costs reforms making his first major speech on how they have progressed since they were implemented.

Though his lecture was focused on costs management, Jackson LJ observed that many of the criticisms of his reforms have not been borne out.

On costs management, he said the most important lesson of the last two years was that “when done properly”, it works well. He added: “Although some practitioners and judges regard the process as tiresome, it delivers a valuable service to court users and is worth the cost.”

But he acknowledged that problems have arisen, notably delays in listing case and costs management conferences (CCMCs). The issue was particularly acute with clinical negligence cases in London, where the waiting time for a first case management conference has reached nine months.

Noting that he had originally recommended that adopting costs management be a matter of judicial discretion, Jackson LJ proposed repealing amendments to CPR 3.15 and Practice Direction 3E that introduced an assumption in favour of costs management.

“In place of those provisions, PD 3E might set out criteria to guide courts in deciding whether or not to make a costs management order. The formulation of the criteria must be a matter for the Coulson committee [the sub-committee of the Civil Procedure Rule Committee, chaired by Mr Justice Coulson, looking at costs management reform].

“But I would suggest that in formulating criteria the committee should bear in mind the following principles: (i) In most contested part 7 cases and in most cases of the type identified in PD 3E paragraph 2, costs management by a competent judge or master promotes financial certainty and reduces the costs expended on the litigation to proportionate levels. (ii) However, the court should not manage costs in any case if it lacks the resources to do so without causing significant delay and disruption to that or other cases.”

Jackson LJ said some judges feared this would become an excuse for others to ‘opt out’ and lead to forum shopping.

“I do not share these fears. I believe that once criteria are laid down all judges will conscientiously follow them. It is important that there be a uniform approach across all civil courts. There will be an obligation on all judges with leadership roles actively to monitor how ‘their’ judges are exercising the discretion to costs manage.

“If different practices emerge, this should be drawn to the attention of the Deputy Head of Civil Justice, so that he can give appropriate guidance.”

Specifically in relation to reducing the clinical negligence backlog in London and possibly other locations, Jackson LJ called for a “one-off release” from costs management for all cases which already have CCMCs listed for between October 2015 and January 2016. They should instead be “called in for old-style case management conferences at the first opportunity”.

However, in a short address after the lecture, Lord Dyson said that while the proposals to deal with delay are “worthy of the most careful consideration” and he was sure that judges would do their best “conscientiously” to apply such new rules, “I fear that the ‘lack of resources’ card will be played in many cases and that there is a real danger that costs management will become the exception and not the rule in clinical negligence cases”.

Speaking to Litigation Futures after the event, Lord Dyson clarified that this concern applied to “very intensive cases” in general, and not just clinical negligence, and added that he did not share Jackson LJ’s “optimism” about how judges would use such a discretion.

Lord Dyson told attendees that he was otherwise positive about Jackson LJ’s ideas, which he said would be of “great use and interest” to the Coulson committee. The other recommendations included:

  • Making the full-day refresher course on costs management compulsory for all civil judges;
  • Introducing a standard form of costs management order;
  • Amending the rules so that budgets should be lodged 14 days before the CCMC;
  • Until the new form bill of costs is developed, in those cases where detailed assessment proceedings are commenced, the receiving party should lodge a summary of its bill in a format which matches Precedent H;
  • Precedent H needs to be improved, in particular the provisions in respect of assumptions and contingencies, but there should be one sweeping revision – possibly when the new bill of costs is introduced – rather than piecemeal changes over a period of time;
  • A single hearing for both case and costs management should be the norm;
  • Reflecting judicial unhappiness about the recent court fee increases, the court should disregard court fees when considering whether a party’s costs are proportionate;
  • The court should have a residual power to revise agreed budgets where they are obviously excessive or the assumed case management directions upon which budgets were based have changed; and
  • In relation to costs incurred before the CCMS,
    • Precedent H should have separate total columns for incurred and budgeted costs;
    • In the general run of cases, where incurred costs are a small part of the whole, the court should only budget future costs, leaving incurred costs for detailed assessment if not agreed; and
    • In any case where the court has or procures sufficient information for the purpose, it should have the power (a) to comment on the incurred costs; (b) summarily to assess the incurred costs; or (c) to set a global budget figure for any phase, including both incurred and future costs.

By Neil Rose

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