A ruling in the Senior Courts Costs Office should act as a warning to law firms of the risk of law firms not employing Costs Lawyers or having arrangements with external Costs Lawyers – or at the very least not instructing them quickly when an issue arises, the Association of Costs Lawyers (ACL) has said.
The failure of the paying parties (the second to fifth defendants) in National Bank of Kazakhstan & Another v The Bank of New York Mellon & Ors, to instruct Costs Lawyers promptly after the claimants successfully applied for a default costs certificate (DCC) meant that no draft points of dispute were submitted to the court for the application to set aside the DCC.
Even though the bill was substantial, for $3.7m, Master Rowley found that the solicitors had provided no good reason for not supplying the draft points of dispute and so he had no basis on which to set aside the DCC.
Though an application to set aside the DCC was made quickly, it took 13 days from being notified of the DCC for the defendants’ solicitors – who did not have any internal costs facility – to appoint a firm of Costs Lawyers and a further 16 days to provide them with a copy of the file and electronic dataset in the required format. The hearing of the application was five weeks later – the defendant solicitors told the court they had needed more time to draft points of dispute.
Master Rowley was critical of the lack of urgency, adding: “Moreover, I would have expected any litigation firm to have links with external Costs Lawyers so that instructions could be sent immediately.
“In these days of costs budgets and costs and case management hearings, the interplay between Costs Lawyers and instructing solicitors goes far beyond the traditional instruction of a cost draftsman to prepare a bill (or points of dispute) at the end of a case when the substantive proceedings have concluded.”
ACL chair Claire Green says: “This case serves as a salutary warning to solicitors that they cannot just ignore costs – there can, quite literally, be a very high price to pay for doing so. Our members who work in-house add significant value to their firms, above and beyond drafting bills, while there is a strong community of external Costs Lawyers ready to help so long as the communication is there.
“At the very least, law firms should make sure they have arrangements in place with Costs Lawyer specialists for when problems like this arise. The courts are showing less and less tolerance for delays, sometimes with drastic consequences, and that applies to costs just as much as other aspects of civil procedure.”
Stewarts partner Fiona Gillett, who worked hand-in-hand on the case with Joseph Dowley, senior costs draftsman at the firm, says: “However experienced a litigator you are, input from in-house costs specialists is invaluable to a full-service client offering. Having the necessary in-depth understanding and experience in practice of the costs rules and the SCCO Guide in-house at Stewarts undoubtedly resulted in a successful outcome for my clients in their continued enforcement of costs orders against the defendants.”
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Notes to editors:
Association of Costs Lawyers
The Association of Costs Lawyers (ACL) is a membership body representing and promoting the status and interests of Cost Lawyers in England and Wales. Founded in 1977, the Association was granted authorised body status in 2007 and is a front-line regulator, able to authorise its members to undertake the reserved legal activities of litigation and advocacy. In recognition of this new-found status, ACL changed its name from the Association of Law Costs Draftsmen in 2011. Costs Lawyers are regulated by the Costs Lawyer Standards Board.
The term ‘costs draftsman’ denotes an unregulated and unqualified person operating in costs and those who instruct costs draftsmen have no recourse to either the Legal Ombudsman or the Costs Lawyer Standards Board.