A senior judge has questioned why costs law itself is so expensive and suggested there may be scope for greater transparency around costs during litigation.

In a roundtable convened by the Association of Costs Lawyers, Lord Justice Birss said the expense of assessing costs was a ‘nonsense’ and it was ‘absurd’ that such high fees are incurred on straightforward cases.

The event was convened to mark 10 years since the introduction of costs budgeting and held in the shadow of the Civil Justice Council’s costs review, which is led by Birss, who is the deputy head of civil justice.

‘The thing that I still do not understand about civil litigation is: how come nobody really knows how much every case is likely to cost?' asked Birss. ‘Cases are really not that different from each other. My old clerk could guess pretty well what the case was going to cost. We seem to have bought into the idea that for every single straightforward or even relatively complicated case, one cannot say roughly what it is going to cost. I do not believe it.’

He suggested that while some litigants need their lawyer to work within a budget, others can afford to pay the difference between what they will recover from the other side if they win and what they will end up having to pay. The judge pondered whether the ‘marginal cost of fiddling around with the budget’ was worth the effort for the second category of litigant. 

Birss LJ

Lord Justice Birss: Profession has ‘bought into idea’ that costs estimates are always difficult

Birss asked whether there might be a benefit from a new rule where parties have to include a budget update whenever they make any application to the court.

He also said that litigation costs may come under greater control with the increasing role of litigation funders with experience of financing cases.

‘Litigation funders are looking at costs in a different way and that is a place in which you can change the culture, because with funders, the lawyers are not just dealing with a different individual client every week.,’ added the judge. ‘They are dealing with an organisation that is thinking about these things and asking questions in a way that clients who may only litigate once do not.’

ACL chair Jack Ridgeway defended the costs sector, pointing out how difficult it is to be certain during different stages of litigation about what work is required.

Ridgeway added: ‘You are looking at two boxers and you are asking one boxer to say, "You do not know what kind of punch he is going to throw, but I want you to predict it and you have to be right every time", because that is civil litigation, ultimately.’

Birss leads a steering group approved by the CJC overseeing a review of costs budgeting, guideline hourly rates, costs under pre-action protocols and portals, and the extension of fixed recoverable costs. Public consultation ended last year and a report is due later this year.

 

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