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Costs Management Guidance from the King’s Bench Division.

Costs Management Guidance from the King’s Bench Division

Senior Master Cook has provided guidance to assist parties who are dealing with costs management in high value personal injury and clinical negligence claims in the King’s Bench Division.

The ‘King’s Bench Masters Costs Management Hearings Guidance Note’ was published on 26^th September 2024 with the purpose of providing a neutral approach to issues which commonly occur in the budgeting process and to encourage settlement of these issues between the parties.

The guidance comes at a time when there has been significant attention on costs management following the recent judgments in Jenkins v Thurrock Council [2024] EWHC 2248 (KB) and Nicholas Worcester v Dr Philip Hopley [2024] EWHC 2181 (KB) which saw costs sanctions being issued against Claimants who were found to have presented and maintained unrealistic/disproportionate approaches to their costs budgets. This Note is therefore key reading for all litigators involved in costs management in the King’s Bench Division for claims of this nature.

A summary of the Note is set out below, but we would advise that the full version of the guidance is considered. A link to a copy of the full Note can be found here.

Summary of the Guidance Note

The Note sets out Senior Master Cook’s guidance as to the general approach to be taken in the King’s Bench Division to costs management, general issues that commonly arise, key points for each of the budget phases, and the costs of costs management hearings. A recommended form for costs management orders is provided on page six of the Note.

General approach

Budgets are not set through the same process as a detailed assessment. The Court is required to have regard to the provisions of CPR 44.3(5) when considering whether a budget is proportionate and to the factors set out at CPR 44.4(2) when determining whether costs are reasonable.

General issues that commonly arise

Hourly rates of solicitors:

It is not the Court’s role to fix or approve hourly rates when costs managing a case (CPR 3.15(8)). Whilst there is no requirement for the Court to make a determination on the reasonableness of rates, regard may be had to the hourly rates claimed when considering whether a budget is reasonable. An allowance of a budget based on hourly rates that involve some uplift on the Guideline Hourly Rates may be appropriate (particularly for more senior fee earners dealing with complex high value claims). It is not appropriate to budget on the basis that hourly rates will be reserved to detailed assessment.

Delegation:

The Court may consider the involvement of senior fee earners in work which could reasonably be delegated to a more junior fee earner (at lower hourly rates) when considering the rates in a budget.

Counsel’s fees:

The Court’s role is not to determine how the Claimant should be represented (e.g. by Leading or Junior Counsel or both). Some cases will justify the involvement of both Leading and Junior Counsel. If two Counsel are budgeted for, this may have an impact on the allowance that will be made for time for senior fee earners. Where both Leading and Junior Counsel are instructed, the future work may be assumed to be shared, and substantial involvement of Junior Counsel may reasonably be expected to reduce the level of Leading Counsel’s work.

Phases of the Budget

Issue/Pleadings:

• This phase will have been mostly completed by the time of the CCMC in numerous cases; however, the Schedule of Loss will often require further extensive work.
• The use of Counsel may be justified where the Schedule of Loss is complex, as the relative familiarity of Counsel in dealing with the issues/calculations involved may mean that these costs would be reasonable.

Disclosure:

• Highly case-sensitive in terms of the nature and extent of the documents involved and the level of careful consideration needed.
• Whether and/or the extent to which delegation of work can take place is also case specific.
• A distinction is made between the nature of work in obtaining updated records (which is generally considered to be Grade D work) and in reviewing documents (which would often justify a higher grade of fee earner).
• The guidance advises that, in most cases, solicitors are expected to keep a running, electronic bundle of documents which can be edited and will ultimately form the basis of the trial bundle (this also has an impact on the costs for the trial preparation phase addressed below).
• The work in assembling and paginating bundles is generally not separately chargeable.

Witness Statements:

• There is a general expectation that lower grade fee earners (Grade C solicitors, legal executives and those with similar experience) will be expected to prepare the first draft of a witness statement.
• It will be case specific as to whether work by higher-level senior fee earners in taking and/or checking witness statements is reasonable.

Expert Reports:

• The general assumption will be that where the parties have instructed their own experts, disputes will remain up to and including a trial.
• The Court may have regard to its own experience when determining experts’ hourly rates. The Court will not allow experts’ fees as claimed in the budget just because an expert has advised that their fees will be a certain amount.
• Conferences with experts can take place via video link in some, if not many cases, which will avoid the incurring the costs of experts’ travel time/expenses.
• There will be some instances in which in person conferences would be reasonable (an example is given of an in-person conference being required in a clinical negligence claim where liability is disputed, and close scrutiny of scans/x-rays may be needed).

PTR:

• A Pre-Trial Review is generally not required in the King’s Bench Division.
• With no costs for a hearing, future costs of 2/3 hours will usually be allowed, together with a listing fee where appropriate.

Trial Preparation:

• As addressed above, the King’s Bench Division’s guidance is that in most cases, there is an expectation that a running, electronic bundle of documents will be kept which will form the basis of any trial bundle.
• Whilst assembling/paginating bundles is generally not separately chargeable, work in preparing an index and deciding on the documents to be included in a bundle can be claimed.
• Whether or not a pre-trial conference is reasonable will be case specific. This decision may be impacted by the inclusion of conferences in other phases of the budget.
• There are generally two elements to the Court’s determination of brief fee: the work that Counsel will put in on the brief and the fact that Counsel has been booked for trial and so will have a gap in their diary if the case settles (which may be difficult to fill at short notice).
• The level of a reasonable brief fee will be impacted if Counsel is expected to be heavily involved in the earlier phases of the budget.

Trial

• Budgets should provide for experts’ attendance at trial on the assumption that attendance would be reasonable. However, the Court may not be in a position to determine whether/for how long it would be reasonable for experts to attend trial at the time of the CCMC.
• Where it is unclear as to how long an expert would be required to attend trial, a budget can be agreed on the basis of an assumption (noted to be typically be one- or two-days’ attendance) without there being a finding/agreement on this point. This can be adjusted in due course and the assumption made regarding the length of attendance can be recorded in the costs management order.
• It may not be reasonable for a senior solicitor to attend throughout a trial (even in high value cases).
• When estimating times for solicitor’s attendance at trial, a reasonable starting point is noted to be 7/8 hours a day to include 5 hours of Court time, meetings before/after court, travel, and work in ensuring notes made in the course of the hearing are made available to counsel.

ADR/Settlement:

• A JSM can be budgeted on the assumption this will take place. If a JSM is not needed, this would likely be a good reason to depart downwards from an approved budget.
• The Note highlights that ADR/Settlement is an important phase in high value claims and a significant amount of work may be required.
• The Court will take the extent to which Counsel and the solicitors will be familiar with the issues arising from earlier involvement in the case when setting the budget.

Costs of Costs Management Hearings

The guidance reminds us that the provisions of CPR 44.2 apply to costs management hearings. As in the recent cases of Jenkins and Worcester mentioned above, the guidance confirms that parties who pursue unreasonable or unrealistic claims for costs or fail to take reasonable steps to agree budgets or to make reasonable offers in respect of costs, may be the subject of adverse costs awards.

At a time when there has been a particular focus on the potential costs penalties that can apply if unrealistic and ambitious budgets are presented and maintained during the costs management process, this guidance will be helpful to all litigators dealing with high value personal injury and clinical negligence claims in providing insight as to the general approach that will be taken to commonly arising issues in the King’s Bench Division

How can PIC assist?

Partners in Costs (PIC) are an expert team of Costs Lawyers and Costs Consultants with a wealth of experience in preparing costs budgets and dealing with the costs management process. We are here to provide expert support and will work in partnership with you to secure the best result.

For further advice and training in relation to costs budgeting, please join our Ben Petrecz, Advocate and Senior Costs Consultant, who will be hosting the next FTG Knowledge Hub on Thursday 28^th November.

Leigh King, Costs Lawyer 

14.11.2024