Costs management applies to litigant in person, court rules

The court has the power to make a costs management order in relation to litigant in person (LiP) costs, Chief Chancery Master Marsh has ruled.

He also found that a LiP can recover costs under CPR 46.5 where they obtain legal assistance from lawyers short of them having conduct of the case.

In Campbell v Campbell [2016] EWHC 2237 (Ch), a commercial dispute between two brothers, the claimant initially instructed solicitors – during which time a costs management hearing was ordered – but then filed notice of change and became a litigant in person. His QC has continued to represent him on a direct access basis.

Master Marsh noted that, although the sums at issue may exceed £10m, the claim was not automatically exempted from costs management because the value of the claim was expressed in the claim form as “expected to be in excess of £300,000”, and no application had been made for a direction that a costs management should not apply.

The claimant’s costs budget dated 5 August 2016 provided for future expenditure up to the end of trial of slightly in excess of £315,000, having already incurred costs of £547,621.

Though both sides asked the court to make a costs management order in respect of the claimant’s costs and the court’s jurisdiction was not debated at any length, Master Marsh said the court’s jurisdiction was not entirely clear. So he said it might be helpful to set out his reasons for concluding that such a power existed.

First, he explained, the purpose of costs management, as set out in CPR 3.12(2), was expressed in general terms and “no indication is given that a claim involving one or more litigants in person may not benefit from costs management”.

CPR 3.13 expressly exempts LiPs from the requirement to file and serve a budget, but “the editors of the White Book 2016 suggest that in spite of this exemption, it is open to a litigant in person to file and exchange a budget if they wish”. Further, CPR 3.15(2) provided that the court could manage the costs to be incurred “by any party” and thereafter control the budgets. “Unlike CPR 3.13, no indication is given that different provisions apply to litigants in person,” the judge said.

In addition, there was nothing in Practice Direction 3E that precluded a costs management order against a LiP.

The claimant also sought a declaration that the cost of solicitors from whom he intended to seek advice, but not instruct to have conduct of the case, would be recoverable, along with the fees of junior counsel the solicitors would instruct. It was not disputed that the direct access QC’s fees would be recoverable.

Master Marsh said there was no reason to construe CPR 46.5(3) narrowly so as to prevent a LiP recovering the cost of assistance in the course of their conducting the claim. “The direct access scheme, whether it is used for advocacy or other assistance, provides a litigant in person with expertise which may be essential to be able to progress a claim in an orderly manner and is likely to be of assistance to the court for that reason. Similarly, it is clearly contemplated that a litigant in person may pay for and recover the cost of ‘legal services’ relating to the conduct of the proceedings.

“In a complex claim, the litigant in person may wish, for example, to obtain assistance with disclosure or the drafting of witness statements. This is part of the unbundling of legal services contemplated by Lord Woolf.”

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Costs News
Published date
15 Sep 2016

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