Costs News

20 December 2018
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Voluntary pilot of capped costs for cases worth up to £250k to begin next month

A pilot scheme introducing capped costs of £80,000 for High Court cases worth up to £250,000 – as recommended by Sir Rupert Jackson last year – is set to be introduced next month.

The surprise announcement said that the voluntary pilot will run in Business and Property Courts in Leeds and Manchester (Chancery, Circuit Commercial and the Technology and Construction Court) and the London Circuit Commercial Court.

Subject to ministerial and parliamentary approval of the 102nd update to the Civil Procedure Rules, it will start on 14 January and run for two years.

Based on the capped costs regime in the Intellectual Property and Enterprise Court, it is the first sign of progress on Sir Rupert’s report. Though the government has regularly expressed general support for his recommendations, nothing concrete has yet happened.

The draft pilot rules were set out in the report, having been approved by the rule committee. There have been some minor amendments, but it is not yet clear what they are.

The aim is to streamline the procedures of the pilot courts, lower the costs of litigation, increase the certainty of costs exposure and speed up the resolution of claims.

As set out in the Jackson report, as well as those worth more than £250,000, cases will be exempt from the pilot if they require a trial of more than two days after appropriate case management, involve allegations of fraud, are likely to require extensive disclosure or reliance upon extensive witness or expert evidence, or involve numerous issues and numerous parties.

The regime set out by Sir Rupert would see statements of case limited in length, and accompanied by the documents upon which the party proposed to rely. There would be no automatic disclosure, witness statements or expert evidence – the need for these would be considered at the case management conference (CMC).

Witness statements, if ordered, would be limited in length, will deal only with issues set out in the list of issues, and there would be a general rule that a party may rely on the oral evidence of no more than two witnesses at trial.

The general rule would be that expert evidence would not be permitted. However, where it was permitted at trial it would be given in the form of a report from a single joint expert.

Applications other than at the CMC would be dealt with without a hearing, unless the court considered it necessary to hold a hearing.

As far as it is practical, there would be full docketing, with the trial taking place no more than eight months after the CMC and lasting no longer than two days.

Not more than 21 days after the conclusion of the trial, the parties would produce a schedule of costs by reference to various stages of the litigation, which would be assessed summarily by the court.

A cap would apply to each stage, together with an overall cap of £80,000 (exclusive of VAT, court fees, wasted costs and costs of enforcement).

Where a part 36 offer was made by the claimant but not accepted, costs would not be set at large. Instead, the stage caps will increase by 25% and the overall cap would increase to £100,000.

Sir Rupert wrote: “If the pilot is a success, I recommend that the capped costs regime used during the capped costs pilot (with any modifications found necessary) should become available for any suitable case in the Business and Property Courts or the business and property lists of the county court up to a value of £250,000. This could be done by creating a ‘capped costs list’ in those courts.

“It may well become appropriate to extend the regime to cases up to £500,000, but that must be for future consideration.”

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