Now that we are only two months from Jackson D-Day, solicitors are waking up to the prospect of costs budgeting.
Costs budgeting will require lawyers to think carefully about the likely costs of a trial at an early stage, submit budgets to the court for approval, and let the court know if the estimated costs change as the case progresses – or they will not be able to recover any increase on their original budget from the losing party. The rules will apply throughout the multi-track in the County Court and High Court.
Last summer, a judge’s decision in a defamation case which was part of a costs budgeting pilot sent shockwaves through the costs world. The winning claimants lost out on substantial fees because they had not complied with the costs budgeting requirements under the pilot. The appeal judgment on that decision was handed down today and will give further publicity to the impending costs budgeting rules.
ut while the new regime will be a culture shock for solicitors, it will be just as much so for the judges; a fact acknowledged recently by Mr Justice Ramsay who is overseeing the reforms.
One might imagine that the judiciary would have received extensive training to support them in the transition to the new rules. But, in fact, they will only be given a single day’s training.
The Ministry of Justice tells me that ‘all salaried civil judges’ will receive a ‘special day’s training… [which] includes working on some detailed and difficult costs budgeting exercises’. The senior judiciary will be given a shorter session, while deputy district judges and other fee-paid civil judges will not attend any sessions. That is on the basis that fee-paid judges will not normally be hearing high-value multi-track claims – although practitioners tell me that, at the moment, it is not uncommon for deputy district judges to be listed for case management conferences in multi-track cases.
Those on the ground have doubts that one day’s training is really enough for judges to get to grips with such a fundamental change. Iain Stark, chair of the Association of Costs Lawyers, worries that in essence, judges will simply be learning as they go along, which does not bode well for consistency of approach. He also points out that the final rules on cost budgeting have not even been published yet. So what is the training being based on?
Another issue is the extent to which judges will be savvy about the kind of costs tactics that may be played out under the new rules. For example, for one financially strong party, there might be an advantage in putting in a very low costs budget, to make the opponents’ figure – where the lawyer might be acting under a no-win, no-fee arrangement – look expensive, and likely to be rejected by an inexperienced judge. That would put a lot of pressure on one of the parties, and we are likely to see an increase in these kinds of costs tactics.
Although there are concerns that costs budgeting will frontload expense, ultimately it is about making the cost of litigation clearer from the outset, and that is an obvious benefit to clients. But it seems a shame that a little more investment could not have been made in giving judges fuller support on how to make this work in practice. The reform itself might be sound, but – as with so much of the Jackson package – the way it is being implemented could have been done so much better.