News in brief 15th October 2015

Mandatory pilot of new bill format postponed
The mandatory pilot for the new electronic bill of costs will not start on 1 April 2016, the Civil Procedure Rule Committee decided last week.

The voluntary pilot began at the start of this month and will now be extended by six months to October 2016. The committee decided to adjourn its decision on the mandatory pilot to obtain the views of the Ministry of Justice and HM Courts and Tribunals Service. No other decision has been taken about the mandatory pilot or its timing save that the committee indicated that it would not countenance any mandatory scheme coming into effect before October 2016 at the earliest.

Fixed fee warning
Fixed costs are the direction of travel for commercial litigation, the judge in charge of the Commercial Court warned last week.

According to the Law Society Gazette, Mr Justice Flaux told the society’s commercial litigation conference that he suspected a tariff of recoverable costs would be introduced in the commercial arena.

He said: “My own view is that where we are heading is fixed costs; [with] a tariff for what is recoverable. The whole system of [costs] assessment will just go out of the window.”

The judge said he was not “advocating” fixed costs and had “not the faintest idea” what the tariff should be based on. “How do you assess how complex a case is? Certainly not by how much money is at stake,” he said.

Flaux J noted that, in the Commercial Court, cases “do not fit into any type of mould”, making it hard to make fixed fees work. He said he would prefer to see costs-capping orders used more to control excessive costs, adding that “anything other than a fixed costs regime would be appropriate”.

CA backs relief from sanctions over late funding notice
The Court of Appeal has rejected an appeal against relief from sanctions granted after notice of funding in a professional negligence case against London law firm Mishcon de Reya was served late.

The letter of claim was sent in December 2009, and lengthy negotiations followed. In February 2013, the claimants switched lawyers from Charles Fussell & Co to DLA Piper and entered into conditional fee agreements with the firm and counsel, and an after-the-event (ATE) insurance policy.

It should have notified the defendant within seven days but only did so in June 2013. DLA described the failure as an innocent oversight. It issued the claim a week later and also applied under CPR 3.9 for relief from sanctions, which was opposed by Mishcon.

At stake were about £45,000 of DLA’s costs and £17,000 of counsel’s, along with an ATE premium that could potentially be as high as £1.43m.

Mr Justice Hildyard granted relief on the grounds that the default did not have a serious and/or significant adverse effect on the efficient conduct and progress of the case, or other matters before the court.

The appeal court, with Lady Justice Gloster giving the judgment, robustly dismissed several challenges to Hildyard J’s judgment, including the contention that he had accorded no or inadequate weight to the evidence that if relief was granted, the costs of the proceedings could be increased by £1.43m.

“I am not persuaded that the distinction which the appellants [Mischon] seek to draw is well-founded,” said Gloster LJ. She noted that one of the conjoined cases in Denton involved the late filing of a costs budget, a situation that was “analogous to the present case” given the sanction that attached to such a failure, and that the Court of Appeal there had focused on the effect of the breach, and not on the consequence of granting relief.

In any event, there would be no increase in the overall costs of the litigation here, because the ATE would still be payable, although by the claimants rather than defendants.

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Costs News
Published date
19 Aug 2016

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