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Costs and Litigation Funding Newsletter - May 2020

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Changes to the statement of truth

The statement of truth wording has been amended (CPR 22 PD 2.1) and this was implemented on Monday 6 April 2020, as follows:

“I believe that the facts stated in this [name document being verified] are true. I understand that proceedings for contempt of court may be brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth.”

These changes do not affect the statement of truth for Costs Budgets. The current statement of truth in accordance with CPR 22 PD 2.2A remains, as follows: 

“This budget is a fair and accurate statement of incurred and estimated costs which it would be reasonable and proportionate for my client to incur in this litigation.”

The statement of truth must be signed by a senior legal representative. Although no reference is made to this in the CPR, the Costs Budget must be signed by a fee earner who is involved in the litigation, certification by any other person does not comply with the requirements of the statement of truth as they are not able to verify that the budget is either fair or accurate. 

Sue Fox is a Senior Associate in our Costs and Litigation Funding Team. If you have any questions, please contact her on 07587 554 804 or at sue.fox@clarionsolicitors.com.  

 

The importance of correctly certifying documents in detailed assessment proceedings

Please follow this link to see Andrew’s latest Vlog on the mis-certification of a Bill of Costs and the substantial fine a law firm recently received from the SRA. 

Andrew McAulay is the head of our Costs and Litigation Funding Team. If you have any questions, please contact him on 07764 501 252 or at andrew.mcaulay@clarionsolicitors.com.

 

£1.5million costs were not exceptional enough to fall outside Summary assessment

A recent High Court decision shows that careful attention should be given to the preparation of a Statement of Costs, even where the amount that is being claimed is high. Parties should not assume that the amount claimed will deter the Judge from summarily assessing costs at the conclusion of the hearing.

In the case of Eli Lilly & Co v Genentech Inc [2020] EWHC 564 (Pat), which was subject to the shorter trial scheme, the Defendant attempted to argue that substantial costs incurred for a trial of a preliminary issue and a summary judgment application amounting to £855,000 for the Claimant, and £675,000 for the Defendant were “an exceptional circumstance” and therefore should be determined as costs in the case, rather than be summarily assessed. The Defendant sought to rely on the Shorter Trials Scheme Practice Direction 57AB which provides that:

“Save in exceptional circumstances-
(a) The court will make a summary assessment of the costs of the party in whose favour any order for costs is made;
(b) Rules 44.2(8), 44.7(1)(b) and Part 47 do not apply.”

Roger Wyland QC, sitting as Deputy High Court Judge, articulated in his judgment “I agree that these figures are large for what was a two day hearing. However, I do not believe that this makes the circumstances exceptional. The mere fact that substantial costs have been incurred is not, of itself, exceptional” and proceeded to summarily assess the costs, off-setting on certain issues where appropriate. 
  
Although this case relates to the shorter trial scheme, this decision serves as a reminder of the importance of Statements of Costs for all hearings where costs can be summarily assessed under the relevant rules. Careful consideration should always be given to the preparation of the Statement of Costs, even if it appears improbable that they will be dealt with in the circumstances.  

A well-prepared Statement of Costs will assist the Judge in determining costs, which in turn assists with securing the optimum amount of recovery. Furthermore, the default position is that your costs will be payable within 14 days thus boosting cashflow, which will no doubt be well received by practitioners in these current difficult times. 

Conversely, submissions should always be readily available in relation to the opponent’s Statement of Costs to assist the advocate in minimising those costs.  In the event that the Court refuses to summarily assess the costs, a well-prepared Statement of Costs will assist with maximising a payment on account of costs pursuant to CPR 44.2 (8). 

Anna Lockyer is an Associate in our Costs and Litigation Funding Team. If you have any questions, please contact her on 07826 822 821 or at anna.lockyer@clarionsolicitors.com.

Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.