Costs News

18 November 2021
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CJC proposes summary costs procedure for cases settled in pre-action protocols

The Civil Justice Council (CJC) has suggested introducing a summary costs procedure for costs liability and quantum disputes for cases that are resolved at a pre-action protocol (PAP) stage.

It said the procedure would be independent of part 8. Courts would make their determinations without a hearing and written submissions would be restricted in length.

The proposal was contained in an interim report on reforming PAPs which was put out for consultation on Monday.

Key reform options canvassed in the report include:

  • Making all PAPs available online via portals.
  • Formally recognising that compliance with PAPs would be mandatory, except in urgent cases where immediate court intervention is necessary.
  • Introducing a good faith obligation to try to resolve or narrow the dispute at the pre-action stage.
  • Introducing a requirement to complete a joint stocktake report/list of issues as a final step before the start of proceedings.
  • Expanded powers for the courts and new processes for raising compliance issues to facilitate a more robust, consistent and timely approach to non-compliance with PAPs.
  • Guidance to the courts to consider ways of streamlining directions and the litigation process to reflect the progress already made by parties who have complied with the relevant PAP.
  • Making PAPs more user-friendly through greater use of non-technical language, and by providing information about the pre-action and litigation process to litigants in person.
  • Creating a new general PAP with more concrete time frames and disclosure standards for pre-action letters of claim and replies.

The working party conducted a preliminary survey of court users last year, which attracted 148 responses and identified costs and proportionality as “perhaps the topic that produced clearer divisions than any other topic”.

It said: “A majority of respondents thought that the PAPs did promote dispute resolution at proportionate cost. Some respondents stated that this was only likely to be true of cases that settle at the pre-action stage and that, where cases did not settle, PAPs tended to have a frontloading effect.

“A few respondents thought that some cases had been over-prepared at the pre-action stage, or rushed to the PAP stage, bypassing internal complaints procedures, or deliberately prolonged at the PAP stage to increase costs.”

Respondents were split on whether PAPs frontloaded or saved costs, and whether the costs recoverable for PAP-related work (where costs are recoverable) were fair or not.

But 80% of respondents did not believe that the courts dealt consistently with non-compliance with PAPs when making case management directions or imposing costs orders.

“The comments added by respondents were illuminating and sometimes scathing. Some respondents felt that approaches to compliance varied across different types of cases, and between different judges,” the report said.

The consultation closes on 24 December.

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