The debate around the Civil Procedure Rule Committee (CPRC) consultation to extend the mandatory costs budgeting regime to include commercial cases over the value of £2m has largely been one-sided. Understandably, those representing commercial parties in these claims are trying to protect a steady stream of income as well as save the time and expense that the system creates, but the fact remains that the spirit of costs budgeting – to help control excessive spend on costs – speaks directly to these kinds of cases.
The first few months of the regime have been broadly successful: solicitors, costs lawyers and judges are playing their part in creating a transparent system where costs are managed at every stage of litigation. The new system is still in its infancy. However, any rash and permanent exemptions made at this stage, as the new regime is still bedding in, could draw a line under an issue that then needs to be re-examined further down the line.
The City of London Law Society’s litigation committee, in its response to the CPRC consultation, points to its clients’ ability to ‘decide how much they wish to spend on litigation, when and on what terms, and… estimate in broad terms their potential liability in costs’.
But this does not go hand in hand with the transparency that the costs budgeting regime hopes to achieve. We have seen time and time again how a sensible approach to budgeting is thrown to the wind when wealthy parties engage in high-value litigation – a do or die attitude seems to take over. Are there really any paying clients who would not welcome both transparency and judicial oversight of their costs spend – and potential liability?
Maintaining this exemption for high-value Commercial Court claims would not just be a blow for the spirit of costs budgeting, undermining the approach of the judiciary to date, but would add insult to injury to those handling other or lower-value claims.
Sue Nash, Founder, Litigation Costs Services, High Wycombe, Bucks