The new provisional assessment regime for cases with costs of up of £75,000 “just hasn’t happened”, a leading costs judge has said.
Master Peter Haworth, one of three Senior Court Costs Office masters to oppose the Jackson reforms, said it was “quite incredible” that the fate of sums of money as £75,000 should be decided on the papers.
“District judges and costs judges outside London are not asking to do this,” Master Howarth said. “I don’t know where the bills are going, but they haven’t come to the Costs Office. Having geared up for it, we’re able to relax and find other things to do.”
Provisional assessment, one of the recommendations of the Jackson report, allows judges, having decided cases on the papers, to award costs of no more than £1,500 to either side.
Early last year the Ministry of Justice unexpectedly decided to the triple the upper limit from the pilot level of £25,000.
Speaking at the Compass Law commercial litigation conference earlier this week, Master Haworth also said it was “very difficult” to have cost budgeting, which approached the issue in phases, without a new form of costs bill. He said existing bills listed items chronologically.
“The two don’t fit together at all,” he said. “Harmonisation could lead to a more seamless approach to civil costs”.
Master Howarth said a judicial sub-committee was looking at the question of harmonisation, but it “could take 18 months” to come up with a solution, because all the costs software would have to be changed.
Master Howarth said the important thing with costs budgeting was to get it right first time. “There is very limited scope for going back if you’ve made a mistake, especially post-Mitchell. What you put for assumptions and contingencies is one of the most important areas for judges. Assumptions must be clearly set out and costed.”
The master said lawyers would be in difficulties if they didn’t include an item in their budgets and something came up later, unless it was a “significant development”.
He gave, as an example, a personal injury case where half way through the defendants decided there had been exaggeration and they decided to go for surveillance. “It can be very expensive for the defendant and for the claimant who has to look at the evidence,” Master Howarth said.
He said that unless defendants had put surveillance in their costs budgets as a possibility, which was highly unlikely as it removed the element of surprise, then courts would not let them rely on it without “good reason”.
Master Howarth that the new proportionality test for costs would remain “difficult” until there was a ruling from the higher courts. “Uncertainty is the enemy of costs saving,” he observed.
Commenting on the Court of Appeal ruling in Denton, he said: “You may have seen the last of the word ‘trivial’. We’re now looking at the matter from the other end of the telescope and at what is significant in the circumstances.”
Master Howarth added that following the Jackson reforms, this country would no longer have the ‘Rolls Royce’ civil justice system that might have existed. “Perhaps it’s a bit more of a Ford Mondeo, but we’ll have to see.”