Master of the Rolls sets out vision for fundamental review of costs rules

The Master of the Rolls told Costs Lawyers last week that he wanted a review of costs management and a longer-term look at the future of civil costs more generally.

Giving the keynote address to the ACL annual conference in London, Sir Geoffrey Vos (pictured) also urged Costs Lawyers to embrace technology and new ways of operating.

He said he had already asked the Civil Justice Council (CJC) to “embark on a review of costs issues at all levels, including the guideline hourly rates”, as he indicated he would do when setting the new rates in August.

On costs management, he said “we should undoubtedly take another look” at it given the time that has passed and that “considerable experience of its pros and cons has been obtained by judges, costs judges and practitioners alike”.

Though stressing that he would not start this process with “any preconceived ideas”, he recounted sitting in on a case and costs management conference in Birmingham recently in a clinical negligence case worth £100,000.

Much of the two-hour hearing was dedicated to costs budgeting, with many of the arguments focused on “quite small issues in the defendant’s costs budget”.

He continued: “And one was driven to wonder how often those costs are ever recovered against such claimants.”

More broadly, Sir Geoffrey said it was “extremely important” to consider whether the costs system – including costs shifting – was “fit for a modern justice system delivering dispute resolution digitally”.

This required an “holistic consideration of a number of interconnected issues”. First was the move to more remote hearings, which “may affect the way we look at costs recovery in different situations”.

“Secondly and perhaps more importantly, costs recovery will look very different in the online space with the implementation of an entirely digital online justice system for civil, family and tribunal cases.”

The third development was the extension of fixed recoverable costs, “which is going to have far-reaching effects on the types of cases where summary and detailed assessments are needed”. On the flip side were “the seemingly unlimited costs incurred in lengthy cases in the Business and Property Courts and elsewhere in the system”.

He explained: “‘Money no object’ litigation needs careful consideration in the modern environment. First of all, it utilises scarce court resources that may be better devoted elsewhere.

“Secondly, it’s sometimes undertaken for purely overseas parties with no obvious connection with this jurisdiction.

“Thirdly, it’s not always undertaken proportionately.

“And fourthly, it’s not always driven by motivations that are compatible with the objectives of our justice system.”

He conceded that the latter was rare, but there have been “infrequent examples of litigation and its huge costs being used by oligarchs and others as a weapon to oppress or harm those on the receiving end”.

The final factor to consider was the development and use of pre-action portals, artificial intelligence and the blockchain, which required “a completely fresh look at the costs of civil litigation more generally”.

The MR said he was “quite ambitious” and keen for the CJC to help him understand “the bigger issues in the context of digitisation”.

He added: “What I would like to see is the agility and insight from the CJC so that we can move more quickly to make incremental reforms to the system.”

On other matters, Sir Geoffrey stressed the importance of the guideline hourly rates, so long as they continue to exist, being updated annually “or at least every couple of years”, and promised to come back to ACL chair Claire Green on her question about why Costs Lawyers could not claim grade A rates. He admitted not knowing anything about the issue.

His speech concluded: “Lawyers must ensure they always add value and this means lawyers and costs professionals should not support outdated practices that can be undertaken more cheaply and effectively with the aid of technology…

“Costs Lawyers, just as much as anyone else within the civil justice system, have to get with the programme. The future is a different picture which we need to embrace and make sure that what we do and you do is in line with it.”

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Costs News
Published date
02 Dec 2021

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