Costs Budgeting Webinar Professor Dominic Regan

Teresa Aitken, Costs Lawyer Deborah Burke, Costs Lawyer

Introduction The Speakers…….Professor Dominic Regan Professor at City University, London, columnist for New Law Journal and special adviser to the ACL.

Teresa AitkenCosts Lawyer & Managing Director of PI Costing Ltd

Deborah BurkeCosts Lawyer & Director of Deborah Burke Costing Ltd

Introduction

1. Key Features of Costs Management2. Getting the Budget right 3. Planning

Overview

Q - What is Costs Management?

1. An exchange of budgets2. Consideration of budgets by the Court3. The Court managing a case4. Costs are assessed in accordance with the approved

budget

Q – Where can the new regime be found?

• CPR 3.11 to 3.18 & PD 3E• 1st April 2013 • New Precedent H

Q - Why do firms need to engage in the process of Costs Management

1. From 1 April 2013 Mandatory for all Multi-Track cases2. CPR 3.143. CPR 3.18

It will not apply to:-

1. Admiralty and Commercial Courts2. Cases where there are fixed or Scale Costs3. Where the Court otherwise orders

In addition:

• Less than £25,000• Litigants in Person

Completing Precedent H

Phases • Pre-action costs• Issue/pleadings• CMC• Disclosure• Witness statements

• Expert reports• PTR• Trial preparation• Trial• ADR/Settlement

discussions

Q - How will a fee earner go about completing Precedent H

Completing Precedent H

This should not be a new skill for litigators…….

Jefferson v National Freight Carriers [2001] EWCA Civ 2082

Completing Precedent H

Need to consider……

1. Complexity2. Value3. Likelihood of settlement4. Risk5. Likely shape of future litigation

Completing Precedent HThen….

1. How long the anticipated work will take 2. Level of fee earner 3. Counsel 4. Other experts 5. Other disbursements

Completing Precedent HTips….

1. Accurate Time Recording 2. Use the correct hourly rates 3. Cement margin of error 10/15%

Completing Precedent H

Q - How do fee earners complete the “Assumptions”?

• Set out on front Page

• Getting the Assumption right is critical

Completing Precedent H

Tips…..

• State the obvious• Separate document • Consider your opponent’s assumptions• If there are no assumptions

Completing Precedent H

Q - What does the reference to “Contingencies” mean?

Contingencies are different from assumptions:-

• An application for security for costs• An application for specific disclosure

Q - So you have got the budget in draft form, what next?

• Look at it objectively • Proportionate • Be realistic • Talk

Q - Once the budget is exchanged and filed at Court, can the fee earner just sit back?

• No• Consider the opponent's budget • Consider the opponent’s assumptions • CPR 3.15(1) and (2)

Tips…..

• Inform your client within 7 days• Undertake regular reviews • The Court will have regard to any available

budgets

Q - What happens if my budget becomes inaccurate?

• Try to agree a revised budget with the opponents

• File and serve with the Court • Attendance Note • Court will then approve/vary/disapprove

revisions

Q - If a costs management order is not made, am I off the hook as a litigator?

• No!• Section 6• Amend to apply budgets• A statement of reasons• 20 % rule

Q - What happens about the costs which a client has incurred before the first budget is filed at Court?

• Not retrospective • Nevertheless influence decisions

Q - Will I get paid for preparing a budget?

• £1000 or 1% of the approved budget

• Total costs of the costs must not exceed 2% of the approved budget

Practical Examples from Case Law

Q - Tell us about the Sylvia Henry case

Henry v News Group Newspapers Ltd, SCCO, 16 May 2012, Senior Costs Judge Hurst

Q - Is there any good news from Case Law?

Safety Net Security Limited v Leonard Coppage and Freedom Security Solutions Ltd

Conclusion

• It’s happening • Get ready• Engage• Use your Costs Lawyer