Jackson Costs Review – Part 7 – A shrinking role for costs draftsmen?

Lord Justice Jackson's Preliminary Report on Civil Litigation Costs (see previous post) focuses on the perceived problems that have arisen in recent years in relation to legal costs: “There is no doubt that litigation over costs has increased dramatically in recent years, and that this growth is one of the driving factors behind the present review. Whilst many such disputes concerned issues which would need to be resolved under any system which involves costs-shifting, the disputes over the enforceability of conditional fee agreements have generated more litigation, arguably to less useful purpose, than any other. … [L]engthy detailed assessment hearings (largely devoted to legal arguments about recoverability and other technical challenges) still abound. This continuance of technical battles, albeit on changing fronts, appears to be attributable to the huge sums of costs which are in play. Both in the field of personal injury and in other areas, the Costs War is still being fought with some vigour.”

The Report goes on: “Taken collectively, the law reports of the last decade present the unseemly spectacle of endless and expensive squabbles about how much money should be paid to lawyers. … The question must be asked whether the Costs War either serves the public interest or benefits the profession as a whole. If the answer to this question is no, then consideration must be given to what further measures (beyond those already adopted) should be taken in order to stamp out such litigation. … In commenting on the issues raised in Phase 1 of the Costs Review, Professor Ian Scott (general editor of the White Book) stated: ‘I do fear that the profession to which I belong has lost its soul and is far too preoccupied with making money. Further, I think it is capable by its actions of killing the goose that has laid the golden egg. Another thing I feel strongly about is the shocking squandering of scarce court resources on refereeing of disputes about costs’”.

In addition to some of the radical proposals for dealing with these perceived problems, such as increased fixed fees and an end to two-way costs shifting, a number of the options up for consideration include changes to the current detailed assessment process. Some of the problems and options highlighted by the Report include:

1. “The most frequently expressed view is that the costs of detailed assessment and the court fees charged for it are often disproportionate to the amounts at stake in the main proceedings.”
2. “What is required is a bill which gives relevant information to the court and to the paying party and which is transparent. The current form of bill makes it relatively easy for a receiving party to disguise or even hide what has gone on.”
3. “Whilst detailed points of dispute may be necessary in high value complex cases, there is no such necessity in low value, straightforward bills.”
4. “A major problem in the SCCO is the fact that many detailed assessment cases settle very late in the day when it is too late to appoint another case in place of the settled case.”
5. “If a matrix, scale or tariff is in place for fast track cases there is no need for points of dispute or any reply. Depending on the structure of the fast track costs scheme it may be possible to do away with detailed assessment of such cases altogether. In order to cater for exceptional cases there should be an escape clause enabling a receiving party [or paying party] who feels that the scale allowance is too low [or too high] to apply to the court for a detailed assessment subject to a costs risk, e.g., if the assessment does not result in an increase [or decrease] of 20% or more the party applying will bear the costs of the detailed assessment.”
6. “[I]t is suggested that the Costs Practice Direction should be amended to the effect that in fast track cases points of dispute should not extend to more than three pages. … In low value cases it may be possible to dispense with points of dispute altogether, or at least to limit them to points of principle rather than quantum.”
7. “There should be a requirement that the paying party should make an offer in respect of the costs at the same time as serving points of dispute. Where the points of dispute assert that no costs should be payable, eg because of a breach of the CFA Regulations, a provisional offer should be made on the basis that the preliminary issue is decided in favour of the receiving party.”
8. “There appears to be no reason why Part 36 should not apply to detailed assessment proceedings in the same way as it applies to the substantive proceedings. This would provide greater certainty than the present provision in the rules that any offer to settle ‘may be taken into account’.”
9. “For bills of up to say £50,000 it may be possible to have a system of provisional assessment whereby the costs officer considers the bill and supporting papers in the light of the points of dispute.”
10. The decision in Crane v Canons Leisure Centre [2007] EWCA Civ 1352 may need to be reversed.

All these proposals are designed to reduce costs disputes and reduce the cost of costs disputes. None of this is good news for the average costs draftsman or other costs professional.