Costs News

13 August 2015
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Breakdown by budget phases to become mandatory in detailed assessments

Parties going into detailed assessment where a costs management order has been made will need to serve a schedule containing a breakdown of the bill by reference to the budget phases, the Civil Procedure Rule Committee has decided.

The addition to part 47 and to the practice direction will come into force on 1 October 2015.

In a paper to last month’s CPRC meeting, the Senior Costs Judge, Master Gordon-Saker, said that until the new form of bill is in universal use, in those cases where the bill does not identify which costs are claimed in each phase it is difficult to apply rule 3.18 – that where a costs management order has been made, on detailed assessment the court will have regard to the receiving party’s last approved or agreed budget for each phase of the proceedings and not depart from that budget unless satisfied that there is a good reason.

He said: “There are two possible solutions: (1) to require receiving parties to serve bills divided into parts that reflect the phases (but that leads to very unwieldy and complicated bills that are difficult to assess); (2) to require the receiving party in a budgeted case to serve (with or after the bill) a schedule containing a breakdown of the bill by reference to the 10 phases in the budget. The latter seems to be the option adopted by most courts, on a case-by-case basis, where the issue has arisen.”

Master Gordon-Saker referred to Lord Justice Jackson’s Harbour lecture in May, in which the author of the civil justice reforms reported Costs Judge Colum Leonard as saying that, in the small number of budgeted cases referred to him so far, “he has received no indication that such orders are causing any undue difficulty”.

Jackson LJ said: “I recommend that all courts should adopt this approach. It is only a short term expedient… work is now afoot to develop a new form bill of costs, which will be readily comparable with costs budgets.”

Master Gordon-Saker told the CPRC: “To avoid the need for directions to be given in each case, it would seem sensible that the rules require the service of a breakdown in every case in which a costs management order has been made and the old form of bill used.”

He added: “A working party of the Association of Costs Lawyers, to whom I am indebted, has produced a number of model breakdowns… Each contains the basic information needed. I would suggest that the format of the document is best left to the parties, provided that the rule has specified the information needed (the costs claimed for each phase of the proceedings).”

As circulated to members last week, a pilot of the new bill of costs will be introduced in the SCCO from October on a voluntary basis, to allow for evaluation and feedback and any necessary amendment. The next step will be to make the new bill of costs mandatory in cases where a costs order was made after April 2016.

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