27 February 2013Print This Post

New Precedent H guidance – a recipe for confusion and uncertainty

Harman: not clear which phase covers quantum

The new guidance for Precedent H – with which parties provide costs budgets – is confusing, contradictory and not written by someone with experience of conducting litigation, explains costs lawyer Matthew Harman of Harmans

It is bad enough that we have had to wait until the eleventh hour to see the final version of the new practice direction for costs management, but now we are faced with an ill thought-out and contradictory guidance note on Precedent H and the phases.

The new practice direction at 2.4 states: “As part of the costs management process the court may not approve costs incurred before the date of any budget. The court may, however, record its comments on those costs and should take those costs into account when considering the reasonableness and proportionality of all subsequent costs.”

In other words, the court cannot impose a budget on work already carried out. This is a clear and simple concept to grasp. But the guidance note states that the pre-action phase does NOT (their emphasis) include “any work already incurred in relation to any other phase of the budget”.

Suddenly, everything is as clear as mud as this suggests that the court will impose budgetary control over work already carried out if it falls into the later phases. This cannot be correct. Apart from anything else, it is a tacit admission that the other phases do not cover all areas of the litigation or else how would there be anything left to be included in the pre-action phase?

Pre-action phase

Having set out the exclusions, it is worth looking at what is included in the pre-action phase. One interesting heading is “Considering ADR, advising on settlement and part 36 offers”. Now go to the settlement phase and what do we see? You’ve guessed it – “Settlement negotiations, including part 36 and other offers and advising the client”. What this means is that the guidance note as to what should be included in the pre-action phase is directly contradicted by what should not be included in the pre-action phase.

Now let’s briefly turn to the practical application of the phases. There is one word that does not feature anywhere in the guidance but forms an essential part of every single case – quantum. Which phase covers this? The quantum experts part is easy and I suppose it is arguable that the schedule of loss will come under statements of case, but it does not fit comfortably. In a clinical negligence case, for instance, once liability has been dealt with everything focuses on quantification of the claim. What about an advice from counsel on quantum? Where does that fit in to the template? How about medical records? Do they come under the disclosure phase or maybe the expert report phase since they are obtained for that purpose?

I suppose the answer is to pick your phase and argue it before the court.

Almighty rush

The guidance note appears to have been prepared in an almighty rush and with little regard to the practitioners who have to make it all work. It is clumsy and contradictory. The Precedent H, for instance, has a phase “Issue/Pleadings” which has become “Statements of Case” in the guidance.

It is perfectly clear to me that the guidance note has not been prepared by anyone who has conducted litigation on a day-to-day basis. Guidance is meant to assist but it singularly fails so to do.

Harmans is a Litigation Futures sponsor

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3 Responses to “New Precedent H guidance – a recipe for confusion and uncertainty”

  1. Have these documents actually been published? The Precedent H and Guidance Notes Matthew is referring to read to me as if they are still drafts.

    Precedent H has 3 lines for contingencies on page 1 yet only 2 contingency phases on the final page. The fee-earner descriptions are not complete on page 1.

    The guidance notes also refer, on the final page, to para 4.7 of the PD. There is no para 4.7 of PD3E or the Costs PD as far as I can see. Should it refer to para 2.6 of PD3E?

    I just get the impression that these documents aren’t fininished!

  2. Jon Lord on February 27th, 2013 at 9:58 am
  3. You seem to be equating “Pre-Action” with “Pre-Budget”. If costs have been incurred then they will be entered as such regardless of the phase they are atrributed to. That will make it clear they were incurred before the date of the budget.

  4. Paul Sullivan on March 1st, 2013 at 1:20 pm
  5. I agree but don’t really mind any of the matters raised above. What gets to me however is the apparent semantic ambiguity in the totals column – indeed EVERY totals column. Is it to be totals of estimates? or totals of incurred? or totals of estimates PLUS incurred?

    I am praying that the correct (and rational) answer is “none of the above” and they actually meant “Variance” (or “per cent variance”), as per para 8 of Peter Hurst’s judgment in Henry v NGN. Variance figures is what real project managers use in the real world and actually might be useful to a costs judge, as it was to Chief Master Hurst.

    Once this is resolved, the whole process can be automated end to end from raw budget data integrated with raw costs data. Until then, it’s impossible.

  6. Stuart Ritchie on March 3rd, 2013 at 10:01 am