Finding a middle ground on detailed assessment

11 January 2023

Lord Justice Birss

Lord Justice Birss is a man with a lot of influence over the world of costs right now. Not only is he the deputy head of civil justice, but he also chairs the Civil Procedure Rule Committee and the Civil Justice Council’s (CJC) current costs review.

So he had a lot to talk about when addressing the ACL’s annual conference in London at the beginning of November. He did not disappoint. He talked about the choices the CJC working group is facing – he listed some of the many, many reform suggestions received in relation to costs budgeting – without indicating which way it is going. But it was when he went on to talk about three “bugbears” with the current costs system that he gave more of an idea of his thinking.

One was relatively minor – the lack of detail in form N260 about the costs of counsel. He said: “We have all had the unedifying experience of hearing counsel, having knocked several lumps out of their opposing solicitor’s numbers, then skating over the figure for opposing counsel. I’ve seen it many, many times now. Never mind the fact that it creates a ridiculous impression of some kind of weird omerta at the Bar, the real objection is that it’s just silly.”

He suggested that the N260 should either require an hourly rate or at least the amount of counsel’s time that the fee represented. This would help judges and the people arguing about the costs “to grapple with the numbers and make it possible to have better decision making in that area”.

Then there was the role of estimates. He said he was “genuinely puzzled” about the distinction between estimates and budgets: “Law firms are all required by the SRA to produce costs estimates for their clients and keep them up-to-date. And it’s an important job and I know it’s taken seriously, particularly by solicitors… These same people tell me that they find preparing budgets to be very difficult, time-consuming and expensive.

“I’m not belittling some obvious differences between estimates and budgets – one goes to court and their opponent and the other doesn’t. But I still, to be honest with you, find it hard to understand why they’re so different from the point of view of the preparation. The reason it matters is because if we could harness the work on estimates and use it for budgeting, it would save an awful lot of effort. But everyone tells me you can’t do it. But so far, to be honest, no one’s ever really managed to explain to me why.”

In some cases, a solicitor’s estimate will indeed form the basis of the budget, but most clients are not concerned as to how their fees are split per phase; rather, they want to know their liability to a certain date or the overall sums payable to their solicitor. Indeed, it was the insufficiency of estimates which in part led to the creation of budgeting. We don’t see that focusing on them gets to the core of the problem.

The third bugbear was the “cost of the costs” and whether the certainty provided by detailed assessment was worth the time, effort and cost of achieving it. Summary assessment was “significantly less costly and time-consuming” and “my question is whether we should not just use that in every case”.

Sir Colin stressed that there were no actual plans to do away with detailed assessment but that he was raising the issue for debate. But, of course, when someone in his position reveals what’s on his mind, you are wise to take note.

We at the ACL would argue that there is mid-point between the current system of detailed assessment and the abolishing it altogether, but it requires part 3 of the Solicitors Act 1974 to be overhauled. I don’t think there is any serious opposition to the idea – the Senior Costs Judge, Andrew Gordon-Saker, is on the record as strongly supporting it, for example – but finding the time both of Ministry of Justice officials and Parliament to do it may be a struggle.

The detailed assessment process could be substantially tightened up at all stages, not least at the start by making it crystal clear what, precisely, a bill is. It is somewhat ridiculous that so much time can be spent deciding whether a bill is a bill and what kind of bill it is.

It was a packed day that demonstrated just what a dynamic field of practice costs is, but other issues of note to the wider profession included Costs Judge Rowley explaining that he was carrying out a review of the costs precedents in part 47 and King’s Bench Master Victoria McCloud giving a sneak preview of the outcome of the consultation on pre-action protocols.

She said parties would be able to serve a notice on their opponent if they considered there was a significant breach of the protocol to reduce the possibility of ambush and with a view to remedying it during the pre-action period. Also, where cases settle but costs are not agreed, a simple summary procedure was likely to be introduced, not unlike provisional assessment, to deal with them.

A version of this article was first published on Thomson Reuters Dispute Resolution Blog, as part of the ACL’s regular series of articles for legal publications to raise the profession’s profile.

Jack Ridgway is the chair of the ACL

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11 Jan 2023

Jack Ridgway is the chair of the ACL

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