Fixed Costs & Disapplication of Fixed Costs
Following Lord Justice Jackson’s lecture on 28 January 2016 in relation to the extension of fixed costs (follow this link for further information), the Ministry of Justice issued the following statement:
“This government remains supportive of the principle of extending fixed recoverable costs and will consider Lord Justice Jackson’s comments carefully”.
Law Society President, Jonathan Smithers, responded to the proposals by stating he was “extremely concerned” and fixed fees for highly complex cases was “totally inappropriate”.
The Civil Justice Council (CJC) met for the first time on 11 March 2016 to discuss the possible extension of fixed costs. The CJC invited 20 Senior Judges, lawyers, costs lawyers and academics to the meeting.
We will keep you updated with any further developments.
Disapplication of fixed costs
In the case of Broadhurst & Anor v Tan & Smith the Court of Appeal have ruled that where a Claimant beats its own Part 36 offer, then fixed costs do not apply. Part 36 offers have always been fundamental to litigation, this case further demonstrates and strengthens the importance of Claimant’s making well pitched and early Part 36 offers.
Compliant Part 36 offers are essential, opponents will now (more than ever) look to rely on technicalities to challenge the validity of a Part 36 offer.
Changes to CPR Part 3 from 6 April 2016
The changes to CPR Part 3 are:
- Budgets must be filed with the directions questionnaire for claims where the stated value is less than £50,000.00
- Budgets must be filed for all other cases, not later than 21 days before the first CMC
- The front page of the budget will only need filing and exchanging for claims where the value is less than £50,000.00
- Parties MUST now negotiate
- Parties MUST file an agreed discussion report no later than 7 days before the first CMC
- The precedent H guidance notes MUST now be followed
- The court cannot fix the hourly rate
- The exemption regarding children’s case has now been formalised
- The court will ordinarily dis-apply costs management for Claimant’s who have a limited or severely impaired life expectation
>Please click on this link which details the changes and the references to the relevant.
Retrospective Success Fee
A retrospective success fee can be recoverableinter partes, but construction is key.
In the recent case of O’Brien v Shorrock  EWHC 1630 (QB) the court held that the date for the purpose of the Notice of Funding is the date on which the CFA was entered into, and not the date from which it purports to run. Where the Notice of Funding states the date from which the CFA took effect (purports to run), this is incorrect and an application for relief from sanction should be made.
A retrospective success fee will only be recoverable where it is reasonable and justifiable; in judgment Eldis J said that such success fees should ‘…attract a degree of scepticism…’ Nevertheless in principle a retrospective success fee is recoverable, however it is important that the solicitor provides a detailed statement of reasons for the success fee when the bill is submitted for assessment.
Any questions? Please contact Matthew Rose at firstname.lastname@example.org or call me 0113 222 3248.
Assignment of CFA's - Further News
In Webb -v- London Borough of Bromley the Claimant challenged a decision following the Provisional Assessment of the Claimant’s Bill of Costs. It was found that an assigned CFA (from firm 1 to firm 2) was invalid.
The Claimant challenged that decision and the matter proceeded to an oral hearing. It was reconfirmed that the assignment was invalid. The Master also determined that the retainer between firm 2 and the Claimant was unenforceable because it failed to comply with the Conditional Fee Agreement Regulations 2013. Therefore no costs were recoverable in respect of firm 2. Please click on the following link to read a more detailed summary of the case >Assignment of CFA's.
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