13 September 2013Print This Post

Get ready for two costs wars, warns expert

Cox: 10% damages uplift getting lost in the mix

There will be two costs wars as a result of the Jackson reforms – one arising from the old regime and the other from the new, a leading costs expert has predicted.

Speaking at PI Futures this week, Greg Cox, a partner at Manchester law firm Colemans-ctts and a High Court costs assessor, said there is “no incentive for anybody not to fight” on pre-1 April cases any more.

As for post-April cases, “it’s inevitable that someone will break ranks – there’s too much uncertainty in all the legislation and too much at stake”, Mr Cox said.

He added: “Because the client is in the mix this time, it will be slightly different. Will people have business models that help clients challenge lawyers’ fees? Will the court have a different approach to the approach it had in 2000/2003 which was, paraphrasing massively, that if it doesn’t matter to the client, then we might find there is no material consequences for the defendant. Clients, if they’re affected, are going to have a powerful argument.”

Transitional cases were also likely to cause problems, such as if the client has changed their solicitor post 1 April, or counsel cannot make the trial, he said.

Giving an overview on emerging costs issues, Mr Cox said the general feeling is that there has been “no real pushback from claimants” over their solicitor taking a 25% success fee from damages, but he questioned whether there might in time be a technical challenge or PPI-style litigation claiming that conditional fee agreements or after-the-event insurance were mis-sold. He emphasised the importance of providing full information in the client-care letter.

Mr Cox said a “surprising amount” of cases staying in the new portals – around 65-70% – despite claimant solicitors’ efforts to get them out.

On qualified one-way costs shifting he has not yet seen defendants attempt to claim fundamental dishonesty on the part of the claimant.

The solicitor highlighted the problems that the new proportionality rule will cause, setting it off against what actually needs to be done to prove the case – “it’s very difficult for the courts”.

As had been widely predicted, the 10% damages uplift mandated by the Court of Appeal in Simmons v Castle is “getting lost in the mix” much of the time, he said.

By Neil Rose