Solicitors have ‘significant concerns’ that costs budgeting will increase overall costs due to the time taken to comply with it.
An 18-month pilot study into new costs rules brought in by the Jackson reforms has found they will get a mixed response from practitioners forced into change.
The pilot found the majority of solicitors who took part spent between two and four hours to complete form HB , which sets out costs budgets. Feedback from costs draftsmen indicated that in London the process could take ‘considerably longer’, the study noted.Practitioners also reported the difficulty of predicting costs accurately at the early stages of litigation, when the work required may be subject to change and costs depended on how difficult the opponent’s conduct of a case was.
But solicitors did concede completing the budget form would become easier once it was more familiar, and the report into the study noted the reforms’ positive effect on clients.
‘Most solicitors agreed that the pilot did assist with early attention to costs, that this allowed their client better to understand their potential liabilities and could also assist with settlement.’
The report concluded that it was ‘likely’ the overall effect of costs management would be to bring down the total costs of the litigation.
As for judges, the general early view was that the pilot encouraged proportionality of costs to the value of the claim and they were pleased with the reforms.
However, feedback towards the end of the pilot was more critical, stating that the extra burden judges from managing cases had become clearer and the procedure was adding ‘significantly’ to time taken in case management. One judge in a telephone interview warned of the ‘considerable extra burden’ faced, which would limit the number of costs management conferences he could hear in a day to four.
Under the reforms, which came into force in April, all parties except litigants in person must file and exchange budgets in advance of litigation. Thereafter the court will control the parties’ budgets in respect of recoverable costs and will not allow them to depart from the agreed budget unless satisfied there is good reason to do so.
The pilot scheme was started in all technology and construction courts, and mercantile courts on 1 October 2011.
Originally scheduled to run for 12 months, it was extended to 31 March this year to continue the procedure until new rules came into force in April.
The pilot was created at the invitation of Lord Justice Jackson (pictured) and monitored by Nicholas Gould, a senior lecturer at King’s College London and partner at Fenwick Elliott.