Fixed Costs, Fee Remissions, Guideline Hourly Rates and more - A look to the future

 

Carter Burnett were in attendance at the annual open meeting of the Civil Procedure Rule Committee. It offers a fascinating insight for those with any interest in how the Civil Procedure Rules are constructed, considered and updated. 

 

The meeting which took place on the ominous Friday 13 May dealt with a diverse array of issues but placing our focus on costs here are some of the interesting issues which arose, including the responses to questions which we ourselves raised. 

 

Guideline Hourly Rates (and the Provisional Assessment cap) 

 

We raised two questions pertaining to whether the CPRC would look at the other recommendations made in the final report on Guideline Hourly Rates published last year (such as the possibility of an annual update of the GHRs on the basis of inflation or a full review within 3 years). 

 

The other question raised was whether there was any intention to look at the Provisional Assessment cap under CPR r47.15(5) which remained static despite the increase in GHRs, effectively providing a real-terms cut to the time which parties can spend on Provisional Assessment. 

 

The CPRC confirmed that the Civil Justice Council had set up a costs group which would be headed by LJ Birss. It was explained that this would take a holistic view to costs and justice and would look at a number of matters to include generally how GHRs should operate, the future of Costs Budgeting and even the impact of the extension of the Fixed Recoverable Costs. 

 

No firm commitments were given but it was made clear that an initial report would be published soon with consultation to follow with a final report intended by autumn. It Is good to see that costs issues have not been left aside and we will keep an eye on the proposed changes once they are made known. 

 

Fee Remissions 

 

We asked the CPRC for an update on the issue of where a party had chosen not to seek a fee remission given they had indicated they would look at the issue previously and that there were now conflicting judgments with Ivanov v Lubbe coming out in favour of the recovery of a court fee where no remission was investigation and latterly Gibbs v King’s College NHS Trust finding the reverse. 

 

The CPRC advised that this remained on their radar, however, they had paused their work upon it to allow the Ministry of Justice to consider any policy implications. For now at least, fee remission arguments will invariably continue with inconsistency in the Court’s approach. 

 

Extension of Fixed Recoverable Costs rules to be decided by the end of the year with implementation in April 2023 

 

It ought not come as a surprise that one of the areas to which time was devoted was fixed recoverable costs. 

 

The CPRC reasserted the intention for implementation of the extension of Fixed Recoverable Costs to most civil litigation up to £100,000.00 by April 2023. The intention is that the rules will be drawn up and be approved before the end of the year with implementation part of the SI update in April of next year. This means it shouldn’t be too long before we have clarity on what next year’s changes will be and how they will operate. 

 

The committee made reference to the recently opened QOCs and Vulnerability consultations will remain open until 20 June which will inform the finalising of the rules. We reported on the consultation previously. 

 

Aldred v Cham – Characteristic versus Feature 

 

Some practitioners will be aware that the CPRC agreed in principle last year to amend CPR r45.29I(h). 

 

The rule currently provides that the Court may allow a claim for “any other disbursement reasonably incurred due to a particular feature of the dispute.” 

 

At the May 2021 CPRC meeting it was resolved that this should be changed to "any other disbursement that has arisen due to a particular feature of the dispute or which are required by the rules to be incurred" (or something to this effect). 

 

This issue arose after the LJ Coulson held that Counsel’s approval advice was not recoverable as the Claimant’s age was a characteristic rather than a particular feature of a dispute. 

 

We asked the CPRC to confirm what the position was given the previously stated intentions. They confirmed that the issue was still getting looked at and that the intention is that the April 2023 reforms will include any amendments to address matters arising in Aldred v Cham. 

 

This will be little solace for practitioners who are seeking to recover disbursements like approval advice, translator fees etc with the present challenges likely to now persist until at least April next year. 

 

Fixed Recoverable Costs and Part 36 

 

The CPRC were asked about whether the new Fixed Recoverable Rules would include a penalty for a Defendant who accepts a Part 36 offer out of time but before Trial and whether any proposed uplift may apply to Counsel also. 

 

In short it was advised that the Ministry of Justice were doing no work on the issue of late acceptance of Part 36 but they did invite impacted to parties to provide further details to the committee if they believed it reflected a lacuna in the rules. 

 

An uplift has been proposed in the consultation paper where a Part 36 offer in a fixed costs case is beaten at Trial though it did not address the issue of late acceptance even though some respondents to the consultation did raise it as an issue. 

 

QOCs and late acceptance of Part 36 

 

One question raised related to whether the CPRC would look at the position surrounding late acceptance of a Part 36 offer by a Claimant and specifically the Defendant's ability to receive credit for any costs entitlement post expiry of the offer. 

 

Thee CPRC advised that the issue was not presently getting looked at and absent further submissions from interested parties it would not be considered. 

 

Disclosure Pilot Scheme 

 

The Master of the Rolls, Sir Geoffrey Vos, specifically addressed questions around the future of the Disclosure pilot scheme which is presently due to end this year. 

 

He stated that they could not rule out further amendments to the scheme before the end of the year and that no decision has yet been made as to whether to make the pilot permanent. He did add, however, that he believed it would be made permanent and would not need extending again. 

On the question of whether the disclosure pilot could be rolled out beyond the Business and Property Courts he said that consultation would be needed before any potential extension could be implemented. 

 

Future of the N260 

 

The electronic N260 pilot scheme came ended on 31 March 2022 with the CPRC indicated that they would instead look at Statements of Costs again. Mr Justice Trower responded to our question about the future of the N260 by indicating that future changes would relate to certification as to where work was undertaken (bearing relationship the Guideline Hourly Rates and location) and that they were also looking at other unspecific miscellaneous suggestions with a view to making the N260 form more user friendly for both parties and the Court. It was, however, said that these miscellaneous changes would only be minimal. 

 

Electronic Service 

 

A question was asked about electronic service and specifically whether the requirements under CPR PD 6A (4.1 & 4.2) may be made less stringent. The CPRC confirmed that they would be looking at the issue of electronic service imminently. The requirements under PD 6A currently mean parties need to agree to electronic service and specify any limitations (such as e-mail size). 

 

Belsner v Cam and informed consent 

 

Forget the latest Marvel movie, the big summer blockbuster is happening in the Court of Appeal (and will be streamed for free via YouTube). The case concerns the issue of informed consent to deductions from damages in PI cases. It was previously held that law firms had to make sure their clients were aware they could be liable for costs which were beyond what could be recovered from an opponent. 

 

It was made clear that the CPRC would be watching the outcome at the Court of Appeal when the case reconvenes in July with the intention to look at matters which arose and surrounding issues.