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29 March 2022
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A streamlined costs system would benefit all

It is striking how often the Gazette now runs stories about costs rulings from the courts. Of course, its journalists are living by the oldest newspaper maxim of them all – ‘follow the money’ – and know all too well that its readers, unsurprisingly, want to know any risks to them being paid. And, let’s be honest, they probably rather enjoy it when someone else messes up and doesn’t get paid. 

But it is also a feature of an increasingly complex system where at times it appears that costs have become the tail wagging the litigation dog. 

I look at the most recent issue of the Association of Costs Lawyers’ member magazine and see articles about cases on the never-ending saga that is part 36, the pitfalls of detailed and summary assessments, and various other aspects of costs recovery. There are rulings coming out at a pace that would amaze those who founded the ACL 45 years ago. 

So perhaps it wasn’t a surprise to hear His Honour Judge Paul Matthews, sitting as a High Court judge, recently bemoan satellite costs disputes as “a recurring, but highly undesirable, feature of modern litigation”. 

The judge said: “I am sorry to be old-fashioned, but, when I started in practice, this kind of thing just did not happen. The losing party accepted liability for the costs, and the receiving party only rarely argued for indemnity costs. (Summary assessment had not then been introduced.) 

“Nowadays, it seems, losing parties nearly always argue that they should not pay the costs at all (I do not know when was the last time I heard counsel use the phrase ‘I cannot resist that’), and winning parties nearly always argue that costs should be on the indemnity basis. 

“This modern kind of satellite litigation is pernicious. In my view it has the effect of diminishing overall justice, and thus gives English civil procedure a bad name.” 

It is no revelation to discover that most judges do not like dealing with costs – our regular member surveys still evidence judicial reluctance to budget, nine years on from the start of the costs management regime introduced by the Jackson reforms. 

Indeed, last year, Master Davison said in a ruling: “QB masters, Chancery masters and costs judges do not necessarily share this defendant’s expressed confidence that costs budgeting controls costs better, or more effectively, than detailed assessment.” 

If we’re having this debate more than a decade on from Sir Rupert Jackson’s report on costs, it could be said that he did not ultimately achieve his aims. Arguably his subsequent 2017 report on fixed recoverable costs (FRC) may make more impact because the government is now looking to implement it for most money claims worth up to £100,000. Long-awaited fixed costs in clinical negligence cases are also finally on the horizon

We all know what a blunt instrument fixed costs are and the ACL has expressed concerns about the lack of statistical rigour behind the figures put forward for FRC. But this is not stopping their expansion and perhaps expresses frustration in government and the judiciary that so much time is being spent on costs.

 So, what can be done? Undoubtedly there is a sense that costs law is simply too complicated. It’s probably why the Senior Costs Judge, Andrew Gordon-Saker, has urged a review of the Solicitors Act 1974. We fully back this. Too much time is spent simply working out what type of bill one is (statute, interim statute, Chamberlain, etc) before actually looking at what it contains. As in all aspects of life, the costs world has moved on a lot from 1974 and these types of tripwires are unnecessary. 

Similarly, we are keen to engage with the Civil Justice Council working party set up by the Master of the Rolls in the wake of his decision last August to increase the guideline hourly rates. This will review the rates more deeply to reflect issues such as greater use of technology and more home-working, which make the location of the lawyer undertaking the work less important. 

Some might wonder what all this means for our profession of costs lawyers. While you may expect that we would welcome ever greater complexity, because it might drive more solicitors to our doors, actually we don’t. 

Recovering a fair level of costs for the work they have done will, of course, always be vital to solicitors. A group of properly trained and regulated specialists who can do this effectively and efficiently – whether working independently or within law firms, as plenty of our members (myself included) do – will be in demand. Frankly, most fee-earners will always see costs as a hassle. 

Costs should not be some backwater insulated from the wider trends in the market. A streamlined costs system that works more smoothly, while identifying and dealing with the genuine issues of contention, will benefit all. As costs lawyers, we are committed to doing our bit to make it happen.

 This article, written by Jack Ridgway first appeared in the Law Society Gazette on 18 March 2022

Jack Ridgway is chair-elect of the Association of Costs Lawyers and is a senior Costs Lawyer at Bolt Burdon Kemp

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