Costs Law Reports Conference 2016



Teresa Aitken and Colin Campbell – Joint Editors of Costs Law Reports

Once again we extend a warm welcome to all Delegates attending our third Costs Conference entitled “Costs Law and Practice”.

Until a few days ago, the past year felt as if it had had something of a “phoney war” about it. At the inaugural Conference in 2014, practitioners were coming to grips with the initial round of Jackson Reforms, which had been implemented on 1 April 2013 and with the plethora of relief from sanctions applications that had followed. By last year the “stink of Mitchell” as Professor Dominic Regan colourfully described the aftermath of Mitchell v News Group Newspapers, had subsided, to be replaced by news two months before our second Conference that the “New” electronic bill had been unveiled by the Hutton Committee, with a Pilot Scheme to come into force the day after the day after the Conference had taken place. Twelve months on, no electronic bill has yet been assessed at the Senior Courts Costs Office, its use is not mandatory, and following Denton v White, the growl of Mitchell has been reduced to a whimper. Little wonder then that “phoney war” has been on the lips of many practitioners.

That is about to change dramatically. First, the 85th update to the Practice Direction has extended the Pilot Scheme to 30 September 2017, and following a speech by Lord Justice Jackson on 23 April 2016 that there should be a long stop date for the implementation of the electronic bill with its used to be mandatory thereafter, it looks like 1 October 2017 will be that date.

The reasons? Within the last few days, we have seen the 86th update to the Practice Direction. This provides in terms that “the Pilot Scheme in its amended form will come into effect on 3 October 2016 with a view to establishing a mandatory form of bill of costs to apply to all work done after 1 October 2017” and that “the Rule Committee will monitor and review the Pilot Scheme and aim to fix the mandatory form of the new bill of costs at its meeting in May 2017”. Out will go “old” precedent H to be replaced by a revised “new” precedent H and the same fate is to befall precedent AA, which will now be called precedent AB. These changes will take effect on the third working day after this Conference although as of 22 September, when this Introduction went to print, no replacement precedent H had been produced by the Ministry of Justice. So it is a case of “watch this space”, but when the 86th update comes into force, the changes will clearly be dramatic and today we are fortunate to have the Senior Costs Judge as our final speaker and a prominent member of the Rule Committee who will be able to enlighten Delegates about the changes.

Our reference to a phoney war does not mean that the editors have been scratching around for costs cases to publish each month. In fact, the reverse has been true: not only have we been spoiled for choice, but by popular demand, we have published several judgements at Circuit Judge and Costs Judge level. These include the latest cases on proportionality now that the amended rule CPR 44.3(2) is starting to bite. And what a bite that has been. Nicholas Bacon QC will bring Delegates up to date with developments now that it is clear that for costs incurred after 1 April 2013, Lownds is reversed and the court must stand back, having assessed the costs, and if the resulting figure for reasonable costs appears to be disproportionate, more must come off.

This has not been without controversy. Queen musician Brian May, whose costs were reduced from £210,000 on assessment to £99,000 and thereafter to £35,000 upon application of rule CPR 44.3(2), referred to the new test as “the scam of “proportionate” legal costs”. Writing in the Times, he then asked himself rhetorically, “What was in the mind of the people who introduced this ridiculous rule of proportionality?” Our speaker will tell us!

Other hot topics within Nicholas Bacon’s remit will be costs budgeting and the latest cases involving CFAs made before 1 April 2013. As things stand at the moment, CFAs can be assigned, but a case has been fast tracked to the Court of Appeal: in this context, there is some very difficult law, including whether personal contracts can be assigned at all, still less whether both the burden and benefit of the contract can be transferred and where does the client fit in? Then there are late changes in funding from CFAs to legal aid, which are also likely to head to the Court of Appeal, plus the “sin of addition” where a party wins the case, but finds either that the work undertaken was outside the scope of the CFA, or the party against whom the costs order was made, has not been identified. Who said that satellite would litigation would disappear? The cases which Nicholas will cover will illustrate just how wrong were those who did.

This year we are introducing two new topics and will be delighted to welcome Registrar Sally Barber, whose experience in insolvency costs is immense, having practised at the Chancery Bar and upon her elevation to the Bench, is now a member of the Insolvency Rules Committee. With the ending of the CFA insolvency exemption in April, how will Insolvency Practitioners fund claims in future and will rogue directors get away with their wrongdoing from now on? Registrar Barber will provide the answers. The second topic is costs in the Court of Protection which have undergone changes over the past twelve months. Costs Judge Jennifer James will bring the Conference up to date, following her recent appointment to a judicial post at the SCCO after a distinguished career in law including as a lecturer teaching on the Bar Professional Training Course.

The addition of Costs in the Court of Protection and Insolvency Costs means that we are not featuring the Solicitors Act and mediation in costs as separate topics this year. That is not to say that developments in those areas have been  limited. On the contrary, there has just been a dramatic decision by our final speaker Master Gordon- Saker about delivery of a bill under s.58 of the Act and mediation in costs is increasingly being used as a rapid and inexpensive alternative to detailed (and provisional) assessment via CADR (

We have already mentioned the New Bill. Expectations last year were that in would be in universal use by now, but concerns were also expressed that it was too complicated and would add to, rather than save costs. This in part was due to the belief that investment would be required to acquire electronic J code recording systems, but Lord Justice Jackson pointed out that he had never stated that these would be compulsory and it is now accepted that any time recording system can be used so long as work is recorded by reference to phase, task and activity. To assist further, the Hutton Committee has been working on a simplified electronic bill, more about which its head, Alexander Hutton QC will be able to tell us following the changes that have been made and how quickly an increase in its use can be expected. So far the number of bills brought into the SCCO can be counted on one hand and none has progressed to a full assessment. Indeed, the only real evidence of its presence in the SCCO’s courtrooms, is the arrival of sixteen Big Screens on which the electronic bill will be displayed, one for each of the eight Masters and the others for the use of the parties, all still waiting to lose their virginities so to speak. Is that all about to change? Our speaker will give us his views.

Lastly and certainly not least, we are delighted to welcome Sir Jeremy Stuart-Smith as our keynote speaker. Due to pressures of judicial office, Sir Jeremy cannot speak at the customary opening of the Conference but has kindly agreed to give his talk at the start of the afternoon session. Those with long memories will recall that Mr Jeremy Stuart-Smith QC (as he then was), was leading counsel in Sarwar v Alam [2002] 1 Costs LR 37, a classic “costs wars” case in which the lead judgment was given by Lord Phillips MR and the glistening array of barristers numbered eight silks and seven juniors. More recently , Sir Jeremy (as he now is) has delivered judgments in several key costs cases, from giving relief from sanctions where a statement of truth had been omitted from a costs budget   (The Governor and Company of the Bank of Ireland v Philip Pank Partnership [2014] 2 Costs LR 301), to the level of penalty it was just to impose where a costs schedule had been served late ( Devon County Council v Celtic Bioenergy Limited [2014] 4 Costs LR 609), to the effect on a budget of the signature of a costs costs draftsman rather than a senior legal representative (Americhem Europe Ltd v Rakem Ltd [2014] 4 Costs LR 682), to the correct approach to follow in the Technology and Construction Court when fixing a costs budget (Americhem Europe Ltd v Rakem Ltd [2014] 4 Costs LR 682). It will be fascinating to hear the views of the Judge who decided those cases about their importance and how he envisages costs budgeting and the Jackson reforms will affect our professional lives over the next twelve months.

Costs Law Reports continues to provide a unique service for practitioners who spend their professional lives working in costs. Although there are those who say that the cases can all be found on the internet so there is no need for an entity that is dedicated to providing transcripts of cases on costs, we beg to differ. In Costs Law reports you will find transcripts of judgments that are unreported elsewhere, in addition to which we are the only service to publish decisions of Costs Judges in criminal cases on appeal from Determining Officers under the Criminal Defence Service (Funding) order 2007 as amended. That all said, we welcome suggestions from our subscribers and as we have shown in the publication of cases this year “below”, we are willing to act upon them. We very much hope that you will enjoy a stimulating, informative and interesting day; given the line-up of speakers we have put together, we are confident that you will.