Litigation costs update – New format Bill of Costs & Post-Jackson additional liabilities

New format Bill of Costs and Precedent Q

Following the work undertaken by the Hutton Committee and approval from the Civil Procedure Rules Committee, a voluntary pilot of the new format bill of costs began in the Senior Courts Costs Office on the 1st October 2015.

The new format of the bill of costs, which can be found here will follow the format of a Precedent H costs budget in order to allow a much easier comparison between the approved/agreed costs budget and the final bill of costs.

The new bill of costs aims to be a “self-calculating, self-summarising spreadsheet document based on the J-Codes, which is capable of being generated automatically by use of the J-Codes and adopting the same structure” according to the official guidance.

A mandatory pilot was due to commence on 1 April 2016 but this has recently been postponed without a definite alternative date being given.

In order to bridge this gap, there has been an amendment to CPR 47.6 which now includes the following provision; “if a costs management order has been made, a breakdown of the costs claimed for each phase of the proceedings”.

The breakdown is to be in the format of the new Precedent Q, which can be found here.

We have been keeping abreast of these latest developments so we are well placed to advise you in respect of all aspects of the new Bill of Costs and Precedent Q.

Post-Jackson additional liabilities

With success fees and ATE premiums no longer being recoverable from the paying party, you would be forgiven for thinking that the Courts would not have a great deal of interest in the deduction of success fees, capped at 25% of damages, from the Client’s compensation.

However, if this deduction is coming from a child’s compensation, then be warned!

In A & Anor v Royal Mail Group (No. 2) [2015] EW Misc B30 (CC) (18 September 2015), the Claimant’s solicitors were representing two children who had been injured whilst passengers in a car.

The Claimant’s solicitors, rather belatedly, filed the necessary documentation in accordance with PD 11.1 & 11.2 supplementing CPR 21.12. The success fee had been claimed at 100%, but capped at 25% of the damages, and the base costs in each claim were in the region of £3,000. Both children had recovered a little over £2,000 in compensation. The 25% deduction from the compensation being sought was therefore £516.25 and £528.75 respectively.

In a scathing judgment, Regional Costs Judge Lumb slashed the figure being sought for base costs from £3,000 to £1,180 (to allow the success fee to be calculated) and the success fee was reduced from 100% to 10% given that there was only a remote risk of an innocent child passenger being unsuccessful in such a claim.

The resulting deductions from the children’s compensation were therefore assessed at £118 plus VAT, which gave £141.60. This was clearly significantly less than the figures being sought by the Claimant’s solicitor.

We have a great deal of experience in filing the necessary documentation under PD 11.1 and also dealing with the subsequent hearings so if you have any issues in recovering the success fee deduction from a child’s compensation, we are happy to help.

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