Commercial cases worth more than £2m will be exempt from new costs management rules, the judiciary has decided.
A document issued today says that the exemption was made in an amendment to the Civil Procedure Rules finalised last week.
Costs management is a key element of the Jackson reforms coming into force on 1 April. It requires parties to prepare a detailed budget setting out the entire costs of proceedings in time for the case management conference.
Jackson had said in his 2010 review of civil litigation that the new rule may not be appropriate for high-value cases, which led to the admiralty and commercial courts being excepted from costs management rules.
In the document issued by the president of the Queen’s Bench Division and chancellor of the High Court, it was said to be ‘undesirable’ for the exception to apply only to those courts.
As a result, it will also now apply to cases in the Chancery Division, technology and construction court and the mercantile courts.
The direction states that Civil Procedure Rules ‘shall not apply to cases where at the date of the first case management conference the sums in dispute in the proceedings exceed £2m, excluding interest and costs, except where the court so orders’.
It said the master of the rolls had been consulted and agreed with the decision.
The document added: ‘Parity of approach in relation to cost management between these courts is considered to be important to avoid any inappropriate forum shopping as parties get used to the new rules.’
Sue Nash, costs lawyer and founder of Omnia Legal Software, said: 'This latest announcement appears to be yet another part of the tidying up exercise from the CPR Committee on the costs budgeting rules, but with barely over a month to go before the new rules are implemented it’s a last minute change to add to the general chaos and confusion surrounding the implementation of Lord Justice Jackson’s reforms.
'It’s a blow to cost management as it undermines the imperative behind the proposed change in the first place – the reasoning behind the new system is supposed to be that legal costs need to be controlled but this latest change suggests that they are motivated not by the pure fact that costs are too high, but only that certain costs are too high.
'It undermines the approach of the judiciary to date and could be seen as adding insult to injury to those handling PI and lower level claims.'
It is still envisaged that costs management orders would be made in all other cases except where there is ‘good reason’ not to.