14 April 2014Print This Post

Rule committee allays concern over unintended consequences of costs budgeting extension

Richards: sub-committee to look at regional issues

The Civil Procedure Rule Committee (CPRC) has reassured litigators that the new version of the costs management rule coming into force on 22 April will not accidentally catch Commercial Court and other Rolls Building cases being brought into the regime retrospectively.

In a clarification issued on Friday, the CPRC said “the plain intention of the transitional provisions” is that the current version of CPR 3.12(1) should continue to govern proceedings commenced before 22 April 2014, with the amended version kicking in thereafter.

However, it said a concern had been raised that the provisions may not have this effect.

It explained: “The argument advanced is that the transitional provisions will preserve the current regime only in respect of proceedings to which the current version of CPR 3.12(1) applied; but the current version of the rule does not apply to cases in the Admiralty and Commercial Courts, etc.; such cases will therefore be governed by the amended version of the rule; but if they were commenced before 22 April 2014 they will not benefit from the exceptions in that rule because the exceptions are expressed to apply only to proceedings commenced on or after 22 April 2014.”

The committee said this concern was misplaced. “The current version of CPR 3.12(1), on its proper construction, applies to all proceedings. It lays down a prima facie code that certain proceedings are to be subject to the costs budgeting regime whilst other proceedings are not, but it gives the court the power to bring within the regime a case that is prima facie excluded and to take out of the regime a case that is prima facie included.

“Thus, the fact that the rule provides that section 2 [of CPR part 3] and practice direction 3E do not apply to certain proceedings unless the court otherwise orders does not mean that the rule itself does not apply to those proceedings: it is because the rule applies to them that the court has the power to order that they should be subject to costs budgeting.

“The effect of the transitional provisions is therefore as intended, namely that the current version of CPR 3.12(1) will continue to govern all proceedings commenced before 22 April 2014.”

However, for the avoidance of doubt, the committee said it will seek to reword the provisions at the next legislative opportunity.

Meanwhile, newly released papers from the CPRC’s March meeting revealed that the sub-committee which drafted the new costs management rule was “unanimously opposed” to the idea that the new £10m limit could be arrived at by adding the claim and counterclaim together.

The sub-committee said: “This was, we thought, contrary to the spirit of the decision in December; moreover it would leave it uncertain, when the claim was issued, if the regime applied or not.”

With the directions questionnaire being modified, it also suggested that solicitors be asked to confirm that, even if the case falls outside the mandatory costs budgeting regime, they have advised their clients of the potential benefits of budgeting.

It has now been asked by CPRC chairman Lord Justice Richards to consider the problem of regional cases being tried in London because of the perception of a more favourable costs/costs budgeting regime in the capital.

By Neil Rose

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