Costs management Flashcards
When will costs be ‘proportionate’?
Where they bear reasonable relationship to sums in issue in proceedings, value of non-monetary relief in proceedings, complexity of litigation, any wider factor of public importance etc.
What are the 2 limitations of cost assessment?
Cost assessment = limit costs one party can recover from another - only ordering party to pay costs that were reasonably and proportionately incurred
- Limited information when making case management decisions -
- Uncertainty about what a court would consider to be disproportionate costs
How does costs management address the limitations of cost assessment?
At case management stage
Parties provide a future budget of costs to court at early stage so court can tailor directions and amend/approve agreed budgets between parties to indicate what costs they deem proportionate (less uncertainty)
When does the costs management regime not apply?
- Small, fast and intermediate track
- Claim form states £10m or more
- Claims on behalf of a person under 18
- Claims subject to fixed/scale costs
- Claims which are for a monetary claim which is not (fully) quantifies or a non-monetary claim and CF states £10m or more
Can the court disapply or apply CMR when it would usually (not) apply?
Yes!
What is a cost budget and when is it filed?
- Costs budget = estimate of reasonable and proportionate costs (inc disbursements) which party intends to incur in proceedings
- Should be filed 21 days before first CMC
Where the stated value of the claim is less than £50,000, will the budget be filed 21 days before CMC?
No - where the stated value of the claim is less than £50,000, should be filed with directions questionnaire
How do solicitor’s fees (governed by retainer) relate to what the party might hope to recover?
- Solicitor fees need not bear any relation to recoveable costs - can end up claiming a lesser amount than what solicitor is charging to ensure budget is both reasonable and proportionate!
- Budget relates to what party might hope to recover - not what solicitor can charge client
Important to involve client in budgeting process to avoid solicitor/client cost issues and warn clients they may not be able to recover all the money they spend on their case
What is the prescribed form for the costs budget? What 2 things must practicioners set out in it?
- Precedent H
- Must set out:
- Assumptions budget is based on
- Contingencies - things anticipated but potentially unnecessary (e.g. app for disclosure)
Must be signed with own statement of truth
Will incurred costs (pre-budget) be included on Precedent H?
Yes but cannot be altered by court
Rule that a party will only recover budgeted costs unless there is good reason does not apply to costs incurred prior to costs budget
Once costs budgets are filed and exchanged by parties, what are they required to do with one another?
Discuss budgets and agree costs figures where possible in a budget discussion report
When must a budget discussion report be filed and exchanged? What will be indicated in them?
- No later than 7 days before first CMC
- Indicate figures agreed and not agreed for each phase of ligitation and brief summary of grounds of dispute
Will cost management always happen at a CMC?
Usually, but can convene solely for purposes of cost management at a costs management conference
When must court have regard to available costs budgets?
When making any case management decision (particularly case management decisions at first CMC)
Why would a costs management order not be made?
Where court satisfied that litigation can be conducted justly and at proportionate cost in accordance with OO without an order
What will a costs management order do for agreed and not agreed figures?
- Agreed figures = record extent to which costs budgets are agreed between parties (for both parties)
- Not agreed figures = record court’s approval of a party’s costs budget after making appropriate revisions and setting figures for costs for each party for each stage of proceedings (for each party)
I.e. will end up with 1) figures agreed between the two parties and 2) figures for each party not agreed between the two parties but deemed reasonable and proportionate by the court
What cannot be changed by the court?
Costs agreed between the parties
Where a court approves a costs budget, what does this indicate?
That budgeted costs are reasonable and proportionate
If a CMO has been made, what will the court have regard to when assessing costs on standard basis?
The party’s last approved/agreed costs budget
Will the court depart from the agreed costs budget? I.e. allow costs in excess to be recovered
Where CMO has been made and court are assessing costs on standard basis
Not unless there is a good reason to do so
If no costs management order is made, what is the relevance of the budgets?
They can stil be taken into account
If the budget provides for a greater sum than a party incurs, can they recover this from the opponent?
No; budget effectively becomes a cap
If there is no costs management order made, when must the receiving party provide a statement of reasons with a bill of costs for difference between costs claimed and costs shown in budget filed by party?
If there is a difference of 20% or more between costs claimed by receiving party on detailed assessment and costs shown in budget filed by that party
Cf making a CMO - court won’t depart from budget unless a good reason to do so
If the paying party reasonably relied on the budget, what may the court do?
In situation where receiving party has claimed more than in costs budget (where no CMO made)
Reduce recoverable sum
If significant developments in litigation warrant a revision to party’s budget (up or down), what must happen?
- Amended budget submitted to other parties for agreement if possible (Precedent T)
- Amended budget submitted to court for consideration
What will ‘significant developments’ not include?
Re things that warrant a revision to party’s budget
Inadequacies/mistakes in preparation of costs budget
What is the consequence for a party which fails to file a costs budget when required?
They are automatically treated as having filed costs budget comprising of only applicable court fees unless court orders otherwise
What happens if the court ‘approves’ the automatic budget?
This becomes the starting point for what can be awarded in future assessment proceedings
Dangerous - costs likely to be significantly more than court fees
When should the budget and budget discussion report be filed?
- Budget = not later than 21 days before first CMC
- Budget discussion report = at least 7 days before first CMC
List everything due for a costs and case management conference and when it should be filed by?
- Budget (Precedent H) - no later than 21 days before first CMC
- Disclosure report (and e-docs questionnaire) - not less than 14 days before first CMC
- Draft (agreed/proposed) directions - at least 7 days before CMC
- Budget discussion report (Precedent R) - at least 7 days before CMC
