Costs and Vulnerable Parties – Changes are Afoot
The Civil Justice Council are looking at overhauls to make litigation work better for vulnerable parties. For many this recognition is long over-due. The report itself weighs in at 155 pages and sets out to look at the current position and to provide recommendations for change. The report contains some interesting insights on how the future might look with respect to costs and vulnerable parties.
Principally the report is about ‘access to justice’ (which is a fundamental right). The Civil Justice Council rightly reflect that vulnerable parties (and witnesses) need effective support. Indeed, it’s notable that 25% of individual Claimants who answered a civil court user survey indicated that they considered they had a physical or mental condition. There is a moral duty to ensure that these individuals (and other vulnerable users) do not have a diminished experience with the judicial system simply because they are vulnerable.
Vulnerability can take different forms, it could be age, it could be a lack of capacity, a physical disability or disorder. It’s an important point to note as it demonstrates that the scope of any changes will impact individuals with very different vulnerabilities. Whilst this article will examine the recommendations pertinent to costs, the individuals who these proposals are designed to assist should not be forgotten.
Where is a bolder place to start with the Civil Procedure Rules than the overriding objective itself? One of the key recommendations is to embed the issue of vulnerability within the objective so that it focuses parties and the Court from the get-go.
The exact wording and any changes are subject to approval, however, the amendment suggested by the Civil Justice Council sets the tone:
Dealing with a case justly and at proportionate cost includes, so far as is practicable –
- ensuring that the parties are on an equal footing and can fully participate in proceedings;
(g) ensuring that witnesses can give their best evidence
The CJC want the amendment to sit hand in hand with the introduction of a new practice direction which it is proposed will directly address vulnerability. Such a shift invariably carries costs consequences and the Council have not forgotten this and recognise that it is an issue which directly correlates to a vulnerable person’s experience at Court and also the fact that additional time arises to allow vulnerable parties to have a comparable experience.
Flowing from the proposed overriding objectives are suggested amendments to the test of proportionality. The report notes that “proportionality is fundamental to the civil court process.”
The Council determined that it would be wrong to disapply proportionality completely recording that in most cases, the additional costs would be “woven into [the] overall costs […] which [would] make it difficult to leave them ‘out of account’”.
So how to deal with proportionality in the context of vulnerable parties? The solution, it is recommended, would be to amend the definition of proportionality within the CPR. Such a step, it is argued, would allow the Court to manage costs accordingly.
The proposed amendment would be an addition to CPR 44.3(5) so that it would provide that ‘costs incurred are proportionate if they bear a reasonable relationship to –‘
“any additional work generated or expense incurred due to the vulnerability of any party or any witness”
It is hoped that this would allow the Court greater flexibility with costs where there is a vulnerability.
Interestingly, the Civil Justice Council report envisages that no amendments would be required to the costs management rules and that parties alleging an extra cost as a result of vulnerability “may explain the additional cost, linked to the specific measure sought within any phase in the assumptions box in the Precedent H”. This is not an option where a case is valued at less than £50,000.00 or costs in the budget do not exceed £25,000.00 and a front-sheet only is required (which has no space for assumptions). If the parties do not reach agreement on costs, however, there would usually be an opportunity for oral representations with the Court at least.
There are some additional comments of interest whereupon the Council warn that parties will need to be aware of any vulnerabilities to parties or witnesses early on “as the court is unlikely to permit variations to a budget […] if the party/representative ought to know about [it] at the time of directions/costs management.” They further comment that if a vulnerability comes to light at a later stage in the litigation then these would have to be addressed by an application to vary.
Fixed, Scale and Capped Costs
One of the biggest issues routinely raised by many practitioners is the difficulties faced in conducting fixed costs cases involving vulnerable parties. Potentially some positive news is on the horizon. The Council makes it clear within their report that they believe that “the Ministry of Justice should consider whether there should be a provision within every fixed or scale costs regime for a discretion to consider a claim for an amount of costs which is greater than the fixed recoverable costs to cater for the consequences of specific, identified measures which have been necessary to cater for vulnerability.”
Whether this leads to any changes remains to be seen but it is welcoming to see that the CJC recognised the need for some flexibility when it comes to fixed and scale costs cases. The issues within fixed costs cases are well documented. Whilst the fixed costs provisions provide a mechanism for disbursements to be recovered where they are “reasonably incurred due to a particular feature of the dispute” (CPR r45.25I(h)). The Court of Appeal in Aldred v Cham  EWCA Civ 1780, however, held that advice for an approval hearing for a RTA claim involving a minor was not recoverable because the Claimant’s status as a child had “nothing whatever to do with the dispute itself”. Indeed Coulson LJ continued that “age, linguistic ability and mental wellbeing are all characteristics of the claimant regardless of the dispute”. The CJC quite rightly recognise that this comment has to be seen in the context of the limitations of the fixed costs provisions. Put bluntly the Court of Appeal may have interpreted the rules correctly but the rules themselves appear to be flawed.
Capped costs are not forgotten either though no changes are envisaged. Various reasons are given. Aarhus Convention claims and Judicial Review claims already have broad enough discretion according to the CJC. Meanwhile, the capped costs scheme under CPR r47.15 is a predominately paper process and the Council do not envisage vulnerability issues arising with the capped costs scheme in the Business and Property Courts as it is too limited in nature for any amendments to be needed.
What does the future hold?
The reality is that we simply do not know. We don’t know what recommendations will be taken forward and implemented, though it can be said that the conclusions on the issue of costs clearly have vigour and force. It would be highly surprising if none of the recommendations were enacted in some form.
It’s also self-evident that cases involving vulnerable parties have additional expenses and it is quite right that this is recognised within the recoverable costs. Indeed, as APIL pointed out in the consultation period “there is no costs budgeting in cases involving children, as it is recognised that children are vulnerable and extra work is required to ensure that their case is resolved fairly.” Why recognise some vulnerabilities in some circumstances but then not others elsewhere?
At the Civil Procedure Rules Committee meeting in May of this year, the Committee signalled agreement to the key proposals but there was a recognition that the Ministry of Justice would need to look at some aspects including a review of fixed costs. Given wider issues including the Covid-19 Pandemic and the political situation with Europe, it remains to be seen when any changes will be implemented. Any delays in implementation will ultimately adversely affect vulnerable parties so the importance of acting efficiently cannot be understated.
It must be hoped that these changes are seen for what they are. This is not about undermining proportionality or the fixed, scale or capped costs schemes. It is not about making lawyers richer. It is about a moral obligation for society to ensure that vulnerable parties can get all of the support which they may need. Access to justice for vulnerable parties inevitably comes at a cost but the cost of doing nothing is far too great.
Read the Civil Justice Council’s report on ‘Vulnerable Witnesses and Parties within Civil Proceedings’ via the link – https://www.judiciary.uk/wp-content/uploads/2020/02/VulnerableWitnessesandPartiesFINALFeb2020-1.pdf
Sean Linley | Costs Consultant | Partners In Costs Ltd