The Civil Justice Council has set in motion a possible shake-up of the civil costs regime with the start of a wide-ranging consultation. The judicial-led group will look at the key areas of costs budgeting, guideline hourly rates, the impact of digitisation and portals, and the consequences of the extension of fixed recoverable costs.

A working group has been set up to discuss the issues and events will be held in the coming months to get a sense of what costs changes – if any – the profession wants. Consultation closes on 30 September.

The CJC says the working group will not conduct an examination of the ‘fine-grained’ aspects of the areas under the spotlight, but will instead be ‘holistic in nature’.

It asserts that the costs system in civil justice must be fit for purpose in a digital justice system, assessing costs incurred not just in proceedings before the court but those incurred before court proceedings even begin.

That issue will be considered this month in the high-profile Belsner case, which was initially a dispute over costs of an RTA personal injury claim but has also developed into a discussion about ‘contentious’ and ‘non-contentious’ costs, and whether costs should apply for claims that settle prior to issue.

The consultation asks what costs can be claimed through pre-action protocols and where claims processes are more automated. Much of this process will be governed by rules created by an online procedure rule committee, and the working group will look at how pre-action costs are determined when that is in place.

The CJC says the tenth anniversary of costs budgeting is an opportune time to review the impact and effectiveness of the rules. It acknowledges that costs budgeting has ‘not been without its critics’ and that some judges often feel they are not equipped to conduct the costs budgeting exercise properly. The consultation asks whether costs budgeting should continue in its current form, whether it should be restricted in scope or even whether it should be abolished altogether.

The latest guideline hourly rates were set only last year but are subject to review every two years. The consultation seeks out a ‘feasible mechanism’ for doing this, particularly given the limited resources available.

The CJC says it will not ‘cut across’ the existing work being done by the government to extend fixed recoverable costs for certain cases up to £100,000, but it will look at how these changes affect the wider civil justice system.

The consultation paper adds: ‘There may be other areas in which some form of fixed costs or cost capping scheme may be worthy of consideration. A possible example could be certain kinds of high value specialist litigation.’

 

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