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Paul Bunting, Partner, Aspinall Wright Solicitors
Happy New Year to all our Readers and Welcome Back!
2015 promises to be a fantastic year in costs with lots of interesting challenges for us all.
The year opens with the point set in motion by Lord Neuberger in Coventry v Lawrence (2014) 4 AER 517: namely, whether the presence of additional liabilities restricts access to justice and offends Article 6 ECHR. The point will be heard by the Supreme Court starting on 9th February 2015 with applications to intervene by, amongst others, the Justice Secretary, the Law Society, the Bar Council, and groups representing the interests of asbestos victims and insolvency practitioners – two areas where success fees are of course currently still recoverable. The decision is certainly awaited with interest.
The consequences of this one succeeding are far reaching and potentially concerning not least for the Government; however, Professor Dominic Regan speaking at a costs conference in London on 8th December 2014 urged paying parties to take account of paragraph 58 of the High Court decision Caliendo (2014) EWHC 3414 (Ch) where it was said to be “wholly inappropriate, unwise and indeed wrong” to begin to assess the human rights argument. Professor Regan also made reference to the case of Motto & Others v Trafigura and asked: why did Lord Neuberger miss the point in that case three years ago? Watch this space.
On 30th September last year Lord Justice Jackson gave a speech raising the possibility of fixed costs being applied to claims worth up to £250,000. This would neatly side step the need for cost budgeting in the majority of cases. Coincidentally, January 2015 is the start date for a new pilot scheme to train the Judiciary on how to budget and Precedent H. Although the writer does believe there will be a drive to encompass all fast track costs within fixed fees in the near future, it is not yet anticipated this will encompass multi- track cases.
Insurance companies are making a lot of noise about industrial disease and it is true that disease cases where fast track costs remain at large have experienced an explosion over the last year as PI firms try to focus on bringing in costs bearing work. Insurance companies are calling for fixed fees and a deafness portal in particular and again, watch this space.
Payments on account of costs are likely to increase with the rate set in Thomas Pink v Victoria’s Secret (2014) EWHC 3258 (CH) at 90% of the agreed budget – significantly higher than the previous benchmark for paying parties set in Mars UK Ltd v Teknowledge Ltd (1999). What do you think – too high? Or a sign that budgets are achieving some of what was expected of them when they were conceived.
CPR Part 36 is also substantially revised and re-worked for April 2015. An excellent series of articles on the new Part 36 can be found at Civil Litigation Brief. Pay particular attention to the renumbering – all your stock letters will need to be amended!
The new proportionality test remains unclear with no decisions yet reached at the Court of Appeal. Will this be the year to change that? The continued pressure from insurance companies, in particular in relation to noise induced hearing loss claims, looks likely to prompt attention at some level sooner rather than later.
We could not start the year without mention of the guideline Hourly Rates which have remained unchanged since April 2010. A review continues to rumble on behind the scenes - we await further detail this year. There is concern in particular quarters that the rate review will result in a further lowering of guideline rates given the rise in technology and the time saving, labour reducing technologies we now employ at work. Of course, the expense of such technologies must be built in to the cost being charged to the end user, and inflationary pressure on overheads and staff costs is also a factor. It is to be hoped that the review is based on empirical data and not a knee-jerk desire to reduce lawyers’ fees.
There are bound to be plenty of issues in the coming year which we hope to report on and include in regular articles and newsletters. If you are not already subscribing to our company newsletter please head over to the John M Hayes Home Page and add your name.
Monday 5th January 2015