A clampdown on the accuracy of costs estimates is being driven from the senior judiciary downwards, a leading costs expert warned last week.

Mark Harvey, a partner at Hugh James in Cardiff, said costs claims that were more than one-fifth over a firm's original estimate were at risk of being held to be 'unreasonable' or 'disproportionate' by the courts.


Mr Harvey said that under rules introduced last year - of which many solicitors seemed to be unaware - costs that exceed estimates by more than 20% may not be paid if the firm fails to provide a 'satisfactory explanation' for the increase. The solicitor may also lose the higher costs if the paying party can show that it had 'reasonably relied' on the earlier estimate.


Speaking at the Association of Personal Injury Lawyers' annual conference, Mr Harvey added that judges were entitled to ask for an estimate 'at any stage in a case', and to serve this estimate on other parties. He said that under the Costs Practice Direction, estimates should be provided on the form 'Precedent H', which 'takes the form of a mini-bill', and is so detailed that it adds a further layer of costs in itself, particularly in lower-value claims.


Mr Harvey said: 'The senior judiciary have made it clear they are going to look very carefully at estimates. Indeed, deputy district judges were given short shrift by the senior judiciary [at a recent costs forum] when they said that they do not do so at the moment.


'If you put in too high an estimate, the judge may say it is too expensive, and cap you. If you underestimate, the court will [punish] you in detailed assessment. So estimates will have to be very well thought through.'


He added: 'Cost estimates are here to stay, and they are going to bite at [case] management level and at detailed assessment level. You have been warned.'