CJC Costs Working Group final report May 2023
The final report has been published on 10 May 2023 from the Civil Justice Council Costs Working Group set up in April 2022. This group was asked to look at
- A review of Costs Budgeting
- A review of Guideline Hourly Rates (GHRs)
- Examination of costs under pre-action protocols/portals and the digital justice system
- Consideration of the wider impact of the extension of Fixed Recoverable Costs (FRC)
The report is 54 pages in length – so here’s a quick overview to take you the most important parts of the report.
The recommendations do reference the fact that since costs budgeting was introduced it has improved case management and proportionality of costs. Most respondents to the consultation agree costs budgeting is useful but requires a new approach.
The recommendation is that costs budgeting should be retained but one size does not fit all. A pilot is suggested. Personal Injury, Clinical Negligence, Business and Property Courts work and specialist work is identified as different from the norm and requires a pilot to progress.
In a case involving QOCS, and in clinical negligence cases involving NHSR, recommend full budgets to be dispensed with for Defendants requiring only a front page of Precedent H – still open to extend to personal injury cases.
Costs Budgeting Light
Pilot scheme to commence for Part 7 tailored approach for cases between £100,000 and £1M – Costs budget light testing reducing court and parties time.
CCMC – Staged approach required – e costs management and case management tasks would not have to take place simultaneously.
Listing a CCMC separately to the first directions hearing – as directions hearings are shorter than CCMC’s.
The question as to allocate costs management to the SCCO or regional costs judges
Further recommendations to follow on
- Timescales for exchanging budget discussions reports
- Simplification of Precedent T process
- Penalties for those who fail to comply with timescales
- Overall approach to budgeting process with GHRs and pre-action / incurred costs.
Guideline Hourly Rates
Recommended to retain GHRs
Responses confirm GHRs is fit for purpose
View to annual index linked increases – with 3 caveats
- Top flight commercial work rates too low
- That fact counsel fees are excluded
- A test to depart from GHRs
A need to review the rates last increased in 2021 with detailed review in five years time to consider the impact of the above
Setting up a working group to tackle the market rates content of GHRs and overall a review process every five years to keep on top of market rates
A review of index linking on 1st January each year on GHRs using SPPI (Services producer price inflation)
Short term recommendations
Four changes are recommended
- New rate for high value commercial work
- Retrospective uplift to the 2021 figures using SPPI
- Inclusion of counsel fees assessed by reference to GHR
- The test to depart from GHR to be clearly stated – currently two thoughts of approach
- “a clear and compelling justification and it is in the interests of justice to do so”
- a case of above average complexity or length, and where departure is “just and proportionate”.
Pre-action and digitisation
To engage in pre-action processes to settle claims without need to use litigation and to narrow the issues before settlement of a case
It was noted the tension in costs during the pre-action processes which may result in more costs sanctions being imposed to encourage compliance within the protocol.
Noted overall to overlap with the recommendations of the Pre-Action Protocol Working Group at section 6 – the CJC Report recommends a simplification of the process to determine pre-issue costs.
Consequences of the extension of Fixed Recoverable Costs
It is not the work of this working group to either examine or re-examine the work of the Fixed Recoverable Costs changes nor the work being done in relation to clinical negligence cases.
The report notes the implication of who is to pay for the lawyer’s costs and whether this comes from the other side or from damages which has important implications in personal injury cases – overall this could lead to the extension of FRC as well as changes to GHR and costs budgeting.
The announcement from the Courts and Tribunals Judiciary website can be found here Civil Justice Council Costs Review – Final Report – Courts and Tribunals Judiciary
The link to the report can be found here Civil Justice Council report on costs – Final Report May 2023 (judiciary.uk)
Adrian Hawley 11.05.23