News in brief – 24.06.2021

New Council members elected

Following the recent ballot of members, the newly elected members of the ACL Council are: Victoria Morrison-Hughes, John Pennington-Jones, Richie Young and David Bailey-Vella.

 

CLSB to benchmark prices Costs Lawyers charge

The Costs Lawyer Standards Board (CLSB) is looking to benchmark the prices Costs Lawyers charge for different types of services, it has emerged.

The news came in a policy statement published earlier this month on “good consumer outcomes” – the areas the CLSB intends to target through regulation.

The statement identifies seven outcomes of particular interest – price, quality, access, innovation, privacy, fairness and diversity – “and we will ensure that all our regulatory interventions promote one or more of these”, it said. For these purposes, a ‘consumer’ is any end-user of a Costs Lawyer service.

“We believe that there are many strategic and practical benefits to emphasising consumer outcomes,” the CLSB said.

“Regulators that have a focus on good outcomes are less inclined to evaluate success by looking only at whether firms and practitioners have followed a rule or implemented a process, but instead go on to critically evaluate whether a regulatory intervention had a positive impact on outcomes.”

The CLSB said that the first step was understanding existing consumer outcomes in both the regulated and “to some extent” the unregulated parts of the market for costs law services.

It is carrying out a programme of work against each outcome category, such as interviewing Costs Lawyers who have the highest proportion of lay clients, benchmarking the level of innovation in the profession, researching the pricing structures used by Costs Lawyers and benchmarking prices for different types of services.

 

Part 36 offer for nominal amount was genuine and reasonable, says High Court

A part 36 offer to settle for a nominal amount of damages was a legitimate offer reasonably made with an eye to costs, a High Court judge has ruled.

Shah and Anor v Shah and Anor [2021] EWHC 1668 (QB) was “an intense and protracted family dispute”, Mrs Justice Collins Rice said.

The claimants brought an action for breach of a consent order over the transfer of an apartment in India and sought £30,000 in damages. His Honour Judge Saggerson in Central London County Court found the defendants in breach of their legal obligations but only awarded nominal damages of £10 – although he said that “properly thought out to the point of proof”, there may have been a more viable claim made for losses.

The claimants made the part 36 offer six months before trial for £1 plus their costs. Both parties’ costs budgets had been set above £100,000, and the claimants’ costs at the time stood at more than £200,000.

HHJ Saggerson found it a genuine offer: “I infer that by the time the part 36 offer was made, with so much already invested in the action, the claimants are more likely than not to have concluded that re-working their financial claim and the supporting evidence was too risky and too expensive to be worth further pursuit.

“In colloquial terms, they saw the writing on the wall on damages. Something of the sort must have been in their minds given their part 36 attempt to trade the damages claim for an acceptance of liability and costs.”

The judge said he would not depart from the default position under CPR 36.17 “simply because the rules themselves may appear harsh or produce a harsh result”.

The actual sums of the offer and damages were not the issue. It was an offer to settle for nominal damages and that was what they were awarded – the judgment was at least as advantageous as the offer.

On appeal, Collins Rice J said: “I am satisfied that the judge had a tenable basis for concluding that: as a matter of ‘substance and reality’ the respondents had won; they had won something of value (determination of legal fault) which they could not have won without fighting the action through to a finish…

“That the respondents did not get substantial damages was due to their own litigation mis-steps and not to the intrinsic substance or merits of their case. That did not necessarily prevent them being ‘successful’ overall.”

On whether the offer was genuine, she said it made the defendants think about whether it was worth contesting the liability issue. “Part 36 offers demand hard choices about the least-worst alternative. The part 36 code is specifically designed to make parties face up to these sorts of difficult decisions.”

It had to be acknowledged, Collins Rice J went on, “that the consequences of part 36 in cases such as this are punishing, but it is a separate question whether they are unjust”.

“On that basis, the part 36 result was not an unjust windfall for the respondents, but the product of the appellants’ preference for a win/lose outcome and the hope of victory, over a settlement which the judge found not to be a ‘request for total capitulation’ in objective reality.”

Stephen Goodfellow (instructed by Bishopsgate Law) for the appellants. Yash Bheeroo (instructed by CVS Law) for the respondents.

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Costs News
Published date
23 Jun 2021

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