Fixed Costs, QOCs, Fundamental Dishonesty and more - Latest from the CPRC

 

The annual Civil Procedure Rules Committee open meeting also gives an interesting insight into the work they do and changes which are on the horizon. This is a significant time for change and developments in the arena of costs law so this year’s meeting is of particular interest. The Master of the Rolls kicked things off by remarking that the work on the extension to fixed recoverable costs “is extremely worthwhile”. The tone firmly set at the start. We also had an opportunity to raise a number of questions (though unfortunately the deadline for questions pre-dated both the fixed costs report and CJC costs review final report). What can be gleamed is that there is a lot of work for the CPRC to do. 

 

 

The key costs points arising from this year’s meeting are as follows: 

 

 

 

On the recently published Civil Justice Council’s Costs Review Final Report, LJ Birss (who headed up the working party) stated that there will be work undertaken to commence some pilots, specifically on costs budgeting light and costs capping in patent cases on the Shorter Trials Scheme. He confirmed work would be undertaken on these soon. 

 

 

We asked the CPRC about the imbalance where a Defendant can raise fundamental dishonesty but face no sanction if it is not proved. We expressed concern that this had led to a situation whereby a Defendant could raise the issue routinely and use this as a scare tactic against Claimants and asked whether there was an appetite to toughen up the position. My view is that there ought to be a requirement for clear justification to be given where fundamental dishonesty is raised. 

 

The CPRC stated this is not something they have thought about but they will provide a written response. LJ Birss did, however, intimate that he felt unlikely there would be a toughening up of the rules. 

 

 

The CPRC had previously intimated that the Civil Justice Council would be looking at the issue of the Provisional Assessment cap and whether it ought to be reviewed. It has remained static at £1,500.00 plus VAT and Court Fees since its inception in April 2013. After this time we have seen inflation rise and guideline rates increase, seeing a scenario develop where parties have less time to do the same level of work in. 

The CPRC have confirmed that there is no immediate proposal to review this but they have accepted it is an issue that the costs sub-committee it should look at, though with no promises as to when. 

 

 

We asked the CPRC whether there were any plans to expand QOCs, given it had been intimated in the past it may be extended QOCs to claims including actions against the Police and other public authorities, human rights cases, cases under the Equality Act 2020, human rights cases, housing disrepair, professional negligence claims (particularly those arising from personal injury claims), judicial review and private nuisance. 

The CPRC confirmed that there were currently no plans to expand QOCs at the current time. 

 

 

We raised the issue with the CPRC around the recovery of agency fees in fixed costs claims (an issue likely to become more prevalent with the extension of FRC). We flagged the contrasting unbinding case law on the point with some county court decisions holding agency fees are irrecoverable (having been covered by the existing fixed costs) and others finding there were no rules disallowing the same. 

 

The CPRC’s current view is that this will remain an issue for the courts to determine and it would be for an appeal decision to ultimately address it. 

 

 

Provisional Assessment applies to claims where the costs claimed are £75,000.00 or less. We raised the issue that this has led to some debate with the White Book commenting that they interpret this as a sum which is net of VAT. Our experience is that some Courts agree with this approach, however, others do not. 

 

The CPRC advised that this is an issue that will go on the costs sub-committee’s list but no present consideration. They have recognised it is something that ought to be looked at. 

 

 

We asked the CPRC about the issue which arose in McGreevy v Kiramba [2022] EWHC 2561 (SCCO) (26 September 2022) the Court held that Part 36 where Section IIIA of Part 45 applies, it would limit a Claimant’s costs to the those prescribed in the relevant tables and crucially there would be no right to seek a larger sum by reference to CPR 45.29J. The updated fixed costs rules due to take effect in October, have not remedied this so we asked whether this was a lacuna which needed to be addressed or whether it was an intentional construct. 

 

The CPRC have advised again this is something which they will place on the list for consideration of the costs sub-committee and it was not actually an issue they had considered previously. It is at least on their radar. 

 

 

Another repeated issue and one which we have raised with the CPRC previously after they intimated they would look at this point. This point centred around the inconsistent approach taken to the recovery of court fees where remission is not investigated. Case law has decisions supporting both outcomes i.e. the court fee is recoverable where remission is investigated and alternatively it should be disallowed where remission is not investigated. 

This remains an issue for the Ministry of Justice to address so it is likely to sustain as a contentious issue for the foreseeable future. 

 

 

We asked the Committee whether they had a view over the approach to the preparation of Costs Budgets in case where judgment has been entered. We have been advised in some cases that the Costs Budgets should only include incurred quantum costs (even where no order for costs has been made with respect to liability costs). There is no guidance in the rules as to the correct approach but we know that the case of Page held that a partial or incomplete budget would be viewed as non-compliant and thus the court fee only sanction could apply. We asked the committee for any clarity they could give on this point. 

 

The CPRC have confirmed that they will look at this and they accepted it was a good point though again conceded it may not be anytime soon. 

 

 

The CPRC stated that consideration should be given to the flexibility of allowing a specialist judge to undertake summary assessment and that this should be consulted upon and considered by the costs sub-committee (though it was remarked that the costs sub-committee is exceptionally busy). It is proposed that consideration should be given to a rule change to this effect. 

 

This comes after the Court of Appeal decision in R (On the application of Isah) v Secretary of State for the Home Department [2023] EWCA Civ 268, where Lady Justice Asplin found that summary assessments could only be undertaken by judges who ordered it and there was no power to order otherwise. 

 

If volunteers from the CPRC can be found outside the costs sub-committee then it may be dealt with more quickly otherwise it will be added to the costs sub-committees long list. 

 

 

The Disclosure Pilot Scheme (which is in fact no longer a pilot) applies within the Business and Property Courts. The Master of Rolls confirmed that there are no current plans to extend these disclosure rules beyond its current scope. He did add, however, that some consideration should be given in future to whether specific cases outside the Business & Property courts might benefit from these rules but that it should not be a blanket fit. 

 

 

The updated Part 45 rules (due to come into force in October 2023) will finally remedy the issue brought about by Aldred v Cham. 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.” 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. 

 

Having intimated an amendment would be coming in May 2021, the disbursements rules will finally be changed as follows: 

 

This widening will be welcome news to practitioners and should give parties more scope and flexibility for the recoverability of disbursements. 

 

 

It is good that the Civil Procedure Rules Committee are taking on board queries and concerns around various costs issues, however, with the pace and scope of changes which are currently underway it is very clear that it will be some time before many of these points are even considered let alone addressed. 

 

This means that uncertainty will continue and contentious issues will persist. Of all the sub-committees it is fair to say that it appears that the costs sub-committee is by far the busiest. By at least raising issues and seeking to address these with the Civil Procedure Rules Committee it ensures that they are at least aware of them. 

 

That said, we raised the issue around Aldred v Cham in May 2021 and that is only now getting address with a view to implementation of the expanded wording of the relevant rules in October 2023 (some 2.5 years later). This demonstrates that progress is never expedient and that the various committees have their own priorities which will not always align with the users of the court and judiciary. 

 

We will continue to monitor and report on both progress and developments around costs law. The only real certainty is that there are no signs of abeyance on the front of the evolving world of costs.