Commercial Court considers budget amendments
The Commercial Court is willing to entertain retrospective amendments of costs budgets despite that not being the practice developing elsewhere, it has emerged.
A newly published record of this month’s meeting of the Commercial Court users’ group committee noted that recent developments in case law elsewhere (in particular Yeo v Times Newspapers Ltd [2015] EWHC 209 (QB)) indicated that there would be very limited opportunity for retrospective amendment of costs budgets where parties mis-estimated their budgets.
It said: “HHJ Waksman QC (Mercantile Court) concurred that this was the line which was developing where costs budgeting had been in for some time, and emphasised that, where parties had a costs budget and saw an overshoot looming, an application should be made promptly and before the costs budget figure was exceeded.
“Flaux J [judge in charge of the Commercial Court] noted that the practice in the Commercial Court was to give liberty to apply to allow for amendments to costs budgets, as the court appreciated that it dealt with many cases where precise budgeting ahead of time was not possible. He also noted that the court was also content, in appropriate cases, to adjourn the question of the costs budget if the parties considered that the first CMC was not an appropriate time to deal with it.”
Appeal over CFA assignment ruling
An appeal has been lodged against a recent district judge ruling that the bid to assign a conditional fee agreement from insolvent law firm Barnetts to SGI Legal, which bought its personal injury caseload, was not effective.
DJ Jenkinson in Liverpool found that, although the documents to move the client across to SGI described it as an assignment, the effect was a novation of the conditional fee agreement, based on the terms of the original CFA with Barnetts, but taking effect from January 2014.
He said it fell foul of the general principle that a contract involving personal skill or qualifications was incapable of assignment. He rejected the argument that this case fell into the exception found in Jenkins v Young Bros Transport Ltd in 2006, where the client was loyally following an individual solicitor; there was no evidence that this was what happened with the Barnetts client.
Further, as the terms of the Barnetts CFA, signed in February 2012, did not comply with the post 1 April 2013 rules – because it did not spell out that the success fee should not exceed 25% of the damages – it was unenforceable.
However, he ruled that the benefit of the original retainer was validly assigned, meaning the claimant was entitled to claim the costs incurred by Barnetts.
SGI Legal confirmed that it has lodged its grounds for an appeal, but declined to comment further.
Jackson calls for end of insolvency exemption
Lord Justice Jackson has called for the recently extended exemption for insolvency cases from the impact of his reforms to come to an end.
The exemption for insolvency from the end of recoverability was due to expire in April but, after extensive lobbying, the government decided that it would continue “for the time being”.
Delivering the Mustill Lecture in Leeds, Jackson LJ said it should have come to an end as the government had originally proposed. “By now the profession has had more than enough time to prepare for the changes,” he said.
“I reach that opinion for the following reasons. (i) The recoverability regime was principally designed to assist individual claimants of modest means, in particular those who ceased to qualify for legal aid in April 2000. The advantages gained for insolvency litigation were a windfall. (ii) Recoverability is an instrument of oppression, which is liable to crush defendants who have a good defence. (iii) Recoverability drives up the overall costs of litigation. (iv) It is perfectly possible to bring insolvency litigation without the benefit of recoverability.”