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The Courts and Costs Management

Litigation Futures today reports a speech made on 13/05/15 by Lord Justice Jackson at the Harbour Litigation Funding lecture at Gray’s Inn. It was Jackson LJ’s view that costs management should not be undertaken by the court “if it lacks resources to do so without causing significant delay and disruption to that or other cases”.

Jackson LJ recognised that this is an issue currently having a significant impact on case management of substantial clinical negligence claims in the RCJ, where waiting time for a first CMC has now reached nine months. Privately, Masters have expressed misgivings about their current workload and the extra burden of costs management in the context of ever reducing court resources. The comment of one district judge in a moment of levity, and no doubt deliberately exaggerated, that the parties should only file documents in hard copy and not by e-mail or fax as the court ‘could not afford the paperclips’ is indicative of the very real pressures upon the court service.

Jackson LJ remains an ardent fan of costs budgeting, considering that “when done properly”, it works well. He is however clearly alive to the practicalities and pitfalls of budgeting, and proposes amendment of PD 3E to allow greater judicial discretion in deciding whether or not to costs manage a case.

Lord Dyson, Master of the Rolls, expressed misgivings as to that recommendation, taking a rather more pessimistic view of the likelihood of his judicial brethren continuing to apply budgeting to cases if given the option not to.

Various other recommendations were made, some which would no doubt be welcomed by all, such as a standard form of costs management order, and others that are likely to instil rather more alarm than inspiration, such as the recommendation that the court be given the power to assess incurred costs at the time of the original CMC.

There would be clear concern in relation to that latter proposal as to the ability of the parties to properly make their case for costs that have actually been incurred at the date of the CMC, where the claim is still ongoing; ordinarily, assessment of incurred costs takes place at the conclusion of the claim when the parties are free to bring all relevant considerations to the attention of the court, though which at the point of the CMC the ability or desire to raise all relevant matters is likely to be constrained by the need to ‘put on a brave face’ on one aspect or another.

Assessment of costs at the conclusion of a case has been likened to Lewis Carroll’s Alice Through the Looking Glass, given the propensity of parties to make submissions directly at odds with what they would have to say during the actual conduct of the claim. In the sense of compelling the parties to tell the blunt and candid truth it perhaps has much to commend it, but the conflict between maintaining a robust stance in terms of the merits of a claim so as to not lose ground in a negotiating position, and pointing out the difficulties and weaknesses of a claim so as to better explain to the court the need for costs on certain issues, will be difficult to resolve. In the context of the availability of court resources and the time likely required to properly explain all of those costs already incurred, whether this proposal is workable without causing delay and disruption to other cases seems questionable.

Jackson LJ predicts that in ten years costs budgeting will be accepted by the parties to litigation as entirely normal, and with the likelihood of revision rather than revocation, it looks like it is here to stay. It is right, however, that the Civil Justice Committee look at ways to improve the process, and that should certainly include its application to lower value claims in the multi-track, and the practical benefits of budgeting all matters where common sense dictates the settlement of the majority of cases long before trial, and where correspondingly the court’s window of influence over the costs that are subsequently incurred is in practice narrow and restricted.