Costs News

05 November 2015
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News in brief 5th November 2015

Judge bemoans “mind-bogglingly” disproportionate dispute
“Week after week, if not day after day, judges like myself see litigants spending completely disproportionate amounts of money on purely financial litigation,” Mr Justice Holman began a ruling this week. “The tragedy is that any given couple or family tend only to experience such waste and folly on a single occasion and, if they learn the lesson at all, they learn it too late.

“This case seems to me to be yet another example of parties who have allowed their litigation to become completely out of control and to lack any proportionality to the underlying sums in issue.”

He was giving directions in EDG v RR (Rev 1) [2015] EWHC 3097 (Fam), in which he said “the bald fact is that the dispute between [the parties] in relation to current levels of maintenance is now £4,000 a year and, to get to this point and to achieve enforcement of arrears, the mother has already herself spent £30,000”.

Holman J said: “This is the point at which any person approaching this case with the least detachment, sense of reality or costs proportionality would ask how it is that these parties are still litigating against each other with such bitter intensity… To my mind, there is a total loss of costs proportionality in this case; and the idea of this mother coming over from Paris, as she has today and will have to again, and being locked in litigation with this father about these objectively small sums, is almost mind-boggling.”

IPT increase warning
This week’s increase in insurance premium tax (IPT) from 6% to 9.5% is a potential trap when the cost of after-the-event (ATE) insurance is assessed.

Martin Doyle, director at broker Amberis, pointed out: “On large multi-track cases, this could be a significant amount in light of the 3.5% increase. But, if handled incorrectly on volume business, the effect could be equally costly.” Clients taking out ATE also need to be made aware of how it will affect what is taken from their damages, he added.

How IPT collection is treated depends on the insurer’s accounting method and it is important that lawyers seek guidance from the ATE insurers or risk having to pay any shortfall themselves.

Paul Carter, on the ACL Forum, helpfully linked members to guidance issued by Allianz, DAS, and Temple. ARAG’s can be found here.

Security concerns addressed
Costs Lawyers can access a free one-hour online course on cyber security, which has been developed by the government with the support of both the Law Society and Institute of Chartered Accountants in England and Wales.

Legal professionals are increasingly becoming a target of cyber criminals, while government-commissioned research last year found that 81% of large organisations and 60% of small businesses had suffered a security breach during the previous year. The average cost of an organisation’s worst breach was between £65,000 and £115,000 for small businesses and between £600,000 and £1.15 million for large one.

Click here for the details and access the course.

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