PI Brief Update

Editorial: Reflections on Costs Management - Aidan Ellis, Temple Garden Chambers

25/11/15. Now that costs budgeting has been a feature of civil litigation, at least on the multi-track, for some time, it ought to be possible to offer some considered assessment on the merits of the budgeting process. That it remains difficult to offer such an assessment is largely because the approach to budgeting remains inconsistent. It begins before the hearing. Some Courts list costs management hearings by telephone, others specifically direct that they are unsuitable for telephone hearings. Some Courts require the parties to file a consolidated table allowing the rival budgets to be compared, others require a written summary of the points of dispute and still others require nothing in writing beyond the budgets themselves. The hearing time allowed varies considerably. These issues could, of course, be easily resolved by some centralised guidance or standard order. In the hearing itself, the approach taken by individual judges to the level of scrutiny applied to the budgets remains inconsistent – though anecdotally there are some signs that further training / guidance is leading to a more unified approach. Less Judges, for instance, are fixated on the hourly rates claimed, with more simply factoring the rates in to an overall assessment of costs of each phase.

Another teething problem is that it can be difficult to time the costs budgeting hearing. It can be impossible in a personal injury claim to try to budget at an early stage, particularly when it is unclear whether further medical evidence is required by either party. Alternatively, delaying the budgeting hearing can frustrate the process, because more costs slip into incurred costs – although the Court can comment on incurred costs, in my experience many Judges are reluctant to do so. Perhaps early budgeting needs to be combined with a greater willingness to allow amendments to budgets as litigation progresses.

It is difficult to tell what effect budgeting is having on the conduct of litigation. It may still be too early to tell whether greater transparency about costs encourages the parties to settle claims (conceivably knowing the likely limit of their exposure to costs might actually encourage parties to fight cases). Further research is probably required.

The cost of the budgeting process is high (it encompasses not only the cost of preparing the budget, but also the costs of negotiating (including preparing such points of dispute as the Court requires) and attending the cost management hearing). The demand placed on Court time is also considerable; absent agreement, costs management hearings cannot be done quickly. As a result, as the third anniversary of the Jackson reforms approaches, a rigorous assessment is perhaps required of whether costs budgeting has achieved it goals. 

Aidan Ellis
Temple Garden Chambers

Image ©iStockphoto.com/bluestocking