The introduction of costs management appears unlikely to have the hoped-for effect of reducing the number of detailed assessments, Lord Justice Briggs said today.
In his final report from the Civil Court Structure Review, the full findings from which can be seen on Legal Futures here, the deputy head of civil justice touched on the current issues facing the courts.
He said that at the time he submitted his interim report in December 2015, it was too early to tell whether the introduction of costs management would produce “the large hoped-for falling off in the amount of post-trial detailed assessment”.
He continued: “I am however now advised by the Senior Costs Judge that a sufficiently discernible trend is emerging, which points depressingly away from a conclusion that any such reduction in detailed assessment is likely to occur.”
Briggs LJ identified three reasons for this “discouraging” outcome:
- Costs management only fixes the future costs from the time of the case and costs management conference (CCMC), leaving the costs incurred before then still requiring detailed assessment after trial. “This implies no criticism of the CCMC process, which would be hopelessly unwieldy if costs already incurred needed (otherwise on an exceptional basis) to be subjected to a form of after the event adversarial review”;
- “There are a substantial number of cases where reasons (which cannot be dismissed as fanciful) are advanced for departing from the court-imposed or agreed budget”; and
- Most cases settle before trial, but not at some convenient date which coincides with a completed phase of work for which costs have been budgeted. “The result is that large parts of the work remain subject to detailed assessment in the absence of a budget which neatly fixes their amount.”
The judge said there appeared to be better news in relation to the time typically taken for costs management, both in the Royal Court of Justice and regionally. “The current perception of the relevant judiciary is that the times needing to be allocated for costs management are at last starting to reduce, albeit only at this stage to a modest extent.”
But he recorded concern that the recent decision of the Court of Appeal in Sarpd Oil International Ltd v Addax Energy SA  EWCA Civ 120, at paras 31-53, may serve to undermine this, by suggesting that the CCMC was the time and place for contesting the reasonableness and proportionality of costs already by then incurred, rather than only the estimates for costs still to be incurred.
He wrote: “Whether or not this is what the court really did decide, even a perception that it may have done so is likely to cause adverse consequences for the required length of CCMC hearings, at least in the short term. This is receiving the early attention of the Civil Procedure Rule Committee.”
In terms of whether costs management had delivered a decrease in the disproportionality of costs as against value at risk in cases, Briggs LJ said he had not been able to carry out “any scientific assessment” but reported that the majority of professional stakeholder consultees “have, on a fairly narrow balance, tended to doubt whether the game is worth the candle, whereas the prevailing judicial view is that, although it is taking time to bed down, the costs management process is a very worthwhile addition to the court’s case management powers”.