Prep 5 Costs Management and Case Management

Court’s jurisdiction to order costs

Court has full power to determine by whom and to what extent costs of proceedings are to be paid

Different types of litigation costs

• Solicitor-Client Costs

• Inter-Party Costs

• Non-Party Costs

Solicitor-Client Costs

Payable by the client to the solicitor under the contract of retainer

Inter-Party Costs

Used for the actual figure of costs awarded by the court which one party has to pay the other party

Non-Party Costs

Payable by those not party to the proceedings, most likely a ‘funder’

General rule for Costs

Costs follow the event so the unsuccessful party pays the costs however the court has complete discretion

Standard basis of Costs assessment under CPR 44.3(2) and 44.4(1)

Allows costs which:

• Have been proportionately and reasonably incurred; and

• are proportionate and reasonable in amount

• Any doubt is resolved in favour of the paying party

Indemnity basis of Costs assessment under CPR 44.3(3) and 44.4(1)

Allows costs which:

• Have been reasonably incurred; and

• are reasonable in amount

• Any doubt is resolved in favour of the receiving party

Considerations for whether costs are proportionate under CPR 44.3(5)

• Sums in issue

• Value of any non monetary relief

• Complexity of litigation

• Any additional work generated by the conduct of the paying party

• The parties’ last approved or agreed budgets

• Wider factors such as reputation and public importance

When do fixed costs generally apply?

• Uncontested Disputes

• Enforcement Proceedings

• Small Claims

Methods for assessing Costs

• Standard Basis

• Indemnity Basis

• Summary Assessment

• Detailed Assessment

Summary Assessment

Court determines the amount payable immediately at the end of hearing

Time Limits for Statement of Costs under 44 PD 9.5(4)(b)

Must be filed and served on each party not less than 24 hours before the time is fixed for the hearing

When should summary assessments be used?

• In fast-track cases

• At the end of an interim hearing or application

Detailed Assessment

More detailed procedure for assessing costs involving a Bill of Costs and its own hearing

Service of a Bill of Costs

Within 21 days of service of the notice of commencement

Types of Interim Costs Order under 44 PD 4.2

• Costs in any event

• Costs reserved

• Claimant or defendant’s costs in the case

• Costs thrown away

• Costs of and caused by

• Costs here and below

• No order for costs

Examples of Court’s general case management powers under CPR 3.1(2)

• Extend of shorten time for compliance with any rule, practice direction or court order

• Adjourn hearings or bring them forward

• Require a party or their legal representatives to attend court

• Stay the whole or part of the proceedings or judgment

• Order any party to file and serve a costs budget

Strike Out

Deletion of written material from a statement of case so that it cannot be relied on in proceedings by any party and targets cases which are inadequately drafted or otherwise an abuse of process

Grounds for strike out under CPR 3.4(2)

• Statement of case discloses no reasonable ground for bringing/ defending the claim

• Statement is an abuse of the court’s process or otherwise likely to obstruct the disposal of proceedings

• Failure to comply with a rule, practice order or court order

Abuse of Process under AG v Barker

Using a process for a purpose significantly different from its ordinary and proper use

Sanctions

Can relate to:

• Interest

• Costs

• Striking Out

• Any other measures adverse to a party

Unless Order

Provides for an automatic sanction in the event of non-compliance with the order

Automatic sanctions under CPR

• Where failure to disclose an expert report prevents a party from using that report at trial

• Where failure to file a costs budget will be treated as only filing a cost budget of applicable fees

Relief from Sanctions under Denton

• Is the breach serious or significant?

• Consider why the breach occurred

• Evaluate all the circumstances of the case to ensure that the court deals with the matter justly

Types of Track for Claim

• Small Claims Track

• Fast Track

• Multi-Track

Qualifying for Small Claims Track under CPR 27

• Cases not higher than £10,000

• Road traffic claims involving a child, protected party or motorcycle and not more than £1000

• Other road traffic claims not more than £5000

• PI claim not more than £1500

Requirements for Allocation

• Notice of Proposed Allocation on Parties

• Directions Questionnaire by Parties

• Proposed Directions (Fast/ Multi Track)

• Costs Budget and agreed budget discussion (claims under Cost Management Regime)

Service of Directions Questionnaire

Must be served no later than the date specified on the notice of proposed allocation

Staying a Case

Can be done by agreement of the parties or by court application and usually lasts for one month at a time

Contents of Directions Questionnaire

• Pre-Action Protocol

• Settlement

• Disclosure

• Witnesses

• Expert Evidence

• Trial

• Costs

• Directions

• Other matters

Criteria for Allocation

• Financial value of the claim

• Nature of remedy sought

• Complexity

• Number of parties

• Value of any counterclaim

• Amount of oral evidence

• Important of the claim to non-parties

• Views expressed by parties

• Circumstances of the parties

Overview of Allocation

• Defence is filed

• Court sends notice of proposed allocation

• Parties file directions questionnaires

• Parties file proposed directions

• Court allocates the claim and serves a notice of allocation

Allocation to Multi-Track

Court will possible hold a Case Management Conference

Features of Small Claims

• Very limited costs recovery

• Fewer formalities

• Abbreviated Directions

Standard Directions for the Fast Track

• Disclose within 4 Weeks of Allocation

• Exchange of Witness Statements within 10 Weeks

• Expert Reports within 14 weeks

• Pre-Trial Checklists within 22 weeks

• Trial date/ period fixed for trial within 30 weeks

Purpose of a Case Management Conference

• Suitability of the case for settlement

• Position parties have reached in litigation

• Steps parties have taken so far

• Compliance with previous directions and orders

• Estimated costs of litigation and whether this is proportionate

• Steps to be taken in the future

Issues to be considered at a CMC under 29 PD 5.3

• Whether the claim is clear

• Whether statements need amendment

• Required disclosure

• Expert evidence

• Factual evidence

• Further information required

• Will it be just and save costs to order a split trial or trial of one or more preliminary issues

Disclosure Report

Required not less than 14 days before the first CMC by both parties unless a PI claim

Contents of Disclosure Report

• Briefly describe relevant documents

• Describe location of documents

• Describe how electronic documents are stored

• Estimate broad range of cstso

• State which disclosure directions are sought

Case Summaries

Can also be submitted at the CMC to assist with proceedings

Contents of Case Summaries

• Chronology of the Claim

• Factual issues agreed and in dispute

• Nature of the evidence needed to decide them

To what does Costs Management apply?

To multi-track claims

Overview of the Costs Management Regime

• Budgets

• Budget Discussion Reports

• Case/ Costs Management Conference

• Directions Order

• Costs Management Order

What is a budget?

Estimate of the reasonable and proportionate costs, including disbursements, which a party intends to incur in the proceedings

When to file budgets under CPR 3.13(1)(b)

• If value is less than £50,000, with the party’s DQs

• Any other case, 21 days before first CMC

Costs Management Conference

The court considers the parties’ budgets and the budget discussion report

Main Consequences of a Costs Management Conference

• Case Management Decision

• Costs Management Order

• Assessment if no costs management order

Costs Management Order

Court will consider whether the budgeted costs fall within the range of reasonable and proportionate costs, it may record or fix the costs figure and will not depart from it at assessment without good reason to do so

Overview of Costs and Case Management Conference Procedure

• Budget not later than 21 days before first CMC

• Disclosure Report not less that 14 days before first CMC

• Draft Directions and Budget Discussion report no later than 7 days before first CMC

• Costs and Case Management Conference

• Directions/ Costs Management Order