Costs News

26 November 2015
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News in brief 26th November 2015

More PI reform announced 

The government is set to remove the right to general damages for minor soft tissue injuries and increase the small claims limit for personal injury claims from £1,000 to £5,000, it was announced in George Osborne's Autumn Statement yesterday. In moves likely to hit claimant personal injury lawyers very hard, the Treasury said: The government is determined to crack down on the fraud and claims culture in motor insurance. Whiplash claims cost the country £2bn a year, an average of £90 per motor insurance policy, which is out of all proportion to any genuine injury suffered. The government intends to introduce measures to end the right to cash compensation for minor whiplash injuries, and will consult on the details in the New Year.

"This will end the cycle in which responsible motorists pay higher premiums to cover false claims by others. It will remove over £1bn from the cost of providing motor insurance and the government expects the insurance industry to pass an average saving of £40 to £50 per motor insurance policy on to consumers."

It is said that claimants would still be entitled to claim for 'special damage', including treatment for any injury if required and any loss of earnings. "More injuries will also be able to go to the small claims court as the upper limit for these claims will be increased from £1,000 to £5,000," the Autumn Statement said.

Consent order error corrected

A consent order which adjourned a costs and case management hearing, but did not include a costs management order, has been varied by the High Court to include such an order where the parties had indicated to the court a clear agreement as to the costs budgets.

According to a Lawtel report of Caliendo & Anor v Mishcon de Reya & Anor, Mrs Justice Rose found that the claimant had opportunistically relied on the erroneous omission of a costs management order to proceed on the basis that the budgets had not been approved.

SCCO warning to paying parties over PoDs in budgeted cases

A recent unreported ruling has indicated that the SCCO is following the lead of the Senior Costs Judge in how parties should present bills of costs which have been subjected to costs management, according to Civil and Commercial Costs Lawyers (CCCL).

In BP v Cardiff & Vale University Local Health Board [2015] EWHC B13 (Costs), Master Gordon-Saker directed that bills of costs which have been subjected to costs management should be separated into parts so as to distinguish between the relevant phases of the budget and the costs of the costs management process.

CCCL said: “This guidance appears to have been generally implemented by receiving parties when serving bills of costs. However, some paying parties have been less inclined to revise their points of dispute and acknowledge the tides of progress.”

In its recent case, the firm served a phased bill of costs, with points of dispute eventually being received. While the points of dispute complied with Precedent G and the relevant practice directions, they did not follow the form and contents of the phased bill; they failed to identify which phases were agreed or disputed, failed to provide any good reasons to depart from the approved budget and merely clustered items together across all phases, “employing broad-brush indiscriminate reductions” – which CCCL said effectively rendered the costs management process and the application of CPR 3.18 “nugatory”.

“The form and content of the points of dispute made it impossible for the court or receiving party to establish which phases of the bill of costs/Precedent H should be reduced in accordance with CPR 3.18, thus prejudicing the claimant’s position at assessment. As such, an application was made to strike out the points of dispute and effect CPR 47.9(3). This application was recently heard by Master Rowley at the Senior Court Costs Office.

“In essence, the paying party submitted that their points of dispute followed Precedent G and that there was no guidance in CPR 3.18, CPR 47 or the relevant practice directions stating that they should have been drafted in any other way. It was the receiving party’s position that, as the points of dispute grouped together the entirety of the time claimed across all phases, it made it impossible for the court to have any regard to the claimant’s approved budget and made the application of CPR 3.18 at assessment unviable.

“Master Rowley found the points of dispute to be unhelpful to the extent of rendering the whole costs management process pointless. He ordered that the paying party must serve amended points of dispute in parallel with the relevant phases of the budget. An interim payment on account of costs was also secured and the receiving party was awarded their costs of the day.”

CCCL concluded: “While this decision is unreported, it stands as a clear victory for receiving parties and elucidates further the SCCO’s attitude to dealing with budgeted costs. Furthermore, it should serve as a warning for paying parties not to follow blindly the Civil Procedures Rules and practice directions having no regard for the obvious evolution and ultimate unification of the costs management and detailed assessment process.”

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