Costs: Keeping the Wheels Turning During the Crisis
The coronavirus creates unprecedented challenges for all in the legal industry. Below are some pointers to help law firms and Costs Lawyers to continue to keep the wheels turning during this difficult time. The topics covered are:
· Cashflow/costs payments;
· Sending files to your Costs Lawyer;
· Signing, service and filing of documents, and;
· Dealing with hearings.
Cashflow and Costs Payments
Keeping costs payments coming in will be a priority for many, so now more than ever it is vital that settlement orders include provision for an appropriate amount of costs to be paid on account. There are likely to be substantial delays to detailed assessment proceedings (though not to the preparation of Bills of Costs, which we are able to provide promptly) due to disrupted listings and reduced capacity among Costs Lawyers and costs draftsmen on the other side.
If no provision for a payment on account is included in the final order, the next opportunity to obtain one (if the paying party does not consent) will be upon an application to the Costs Judge, and then only after formal service of a Bill of Costs, receipt of the paying party’s Points of Dispute and the filing of a Request for Assessment. Even in normal circumstances, that is not a speedy process. In the current crisis, it is likely to become glacial.
Where settlement is concluded by Part 36 and the paying party does not agree to render a payment on account, consideration should be given to the making of an application to court for a final order incorporating a costs payment.
CPR 44.2(8) provides that “where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.” The provision is mandatory and there will rarely be a valid legal basis for a paying party not to consent to the making of a payment on account.
In matters where split trials are ordered, once the Claimant has succeeded on liability, an order for a payment on account can be made in respect of the quantum costs notwithstanding that the quantum proceedings are ongoing: RXK v Hampshire Hospitals NHS Foundation Trust [2019] EWHC 2751 (QB). As ever, when settling any part of a case with an order for costs to be assessed if not agreed, it is necessary to include the word “forthwith” in the order, as otherwise, a Bill of Costs cannot be formally served until the proceedings have concluded, potentially delaying your costs claim significantly.
When seeking a payment on account of costs, solicitors too frequently underestimate the amount to which they are entitled. The amount sought should be properly quantified and a Schedule of Costs prepared in support of it in the event of dispute. In cases which have been subject to Costs Management Orders, significantly higher payments on account can be obtained (see, inter alia, Thomas Pink Ltd v Victoria’s Secret UK Ltd [2014] EWHC 3258 (Ch)).
Given the inevitable delays to assessment proceedings, it is important to ensure the right figure on account is obtained, as the next opportunity to secure an order for payment will not arise for some time.
Provision of Documents for Costing
If a Cost Budget, Bill of Costs, Points of Dispute or other costs document is required to be prepared, or advice is needed, the appropriate papers can be provided to us by a number of electronic means, including the use of sharing platforms (such as Dropbox, OneDrive, Sharefile and Workshare), the sending of a USB drive, or remote access.
For hard copy files, courier collection can be arranged.
Where solicitors are working remotely and do not have access to their hard copy file, but cannot provide full papers electronically, solutions can be arranged to ensure the matter will nevertheless be progressed – just get in touch and we will make the appropriate arrangements.
Signature, Service and Filing of Documents
When working remotely, you may not have access to scanners, high capacity printers or administrative support.
CPR 5.3 and Practice Direction 5A, make clear that court documents can be signed electronically (see also Zurich Insurance Plc v Romaine [2019] EWCA Civ 851). This includes Bills of Costs, Costs Budgets and other costs pleadings.
For those who have not used electronic signing of documents previously, it can be done fairly easily and we will be happy to talk through this with practitioners if needed.
It is increasingly desirable to avoid the exchange of paper documents wherever possible, and email may be preferred as a means of service. Litigants are still required to have confirmation in writing that the recipient accepts email service (Practice Direction 6A, 4.1), and failure to confirm this can render service invalid (Barton v Wright Hassall [2018] UKSC 12). Given current circumstances, it is to be hoped that there will be few who refuse to accept email service but it remains prudent to check the position in advance.
As far as filing is concerned, the Senior Courts Costs Office implemented use of the CE-File electronic court file on 20 January 2020 in accordance with the Electronic Working Pilot Scheme. Its use is mandatory for assessment where a request for hearing has been filed after 20 January 2020 and voluntary where the assessment was requested between 7 October 2019 and 20 January 2020. For other cases, documents may be filed by email but you should confirm with the individual court.
Hearings
A Protocol Regarding Remote Hearings was published on 20 March 2020, providing that “the objective is to undertake as many hearings as possible remotely”. Paragraph 12 provides that “It will normally be possible for all short, interlocutory, or non-witness, applications to be heard remotely. Some witness cases will also be suitable for remote hearings”. An updating letter of 23 March 2020 from the Lord Chief Justice clarifies that “hearings requiring the physical presence of parties and their representatives and others should only take place if a remote hearing is not possible and if suitable arrangements can be made to ensure safety”. The Designated Civil Judge for Greater Manchester has confirmed that all interim applications, Costs and Case Management Conferences and Pre-Trial Reviews will take place by telephone or video from 25 March 2020. While at present some in-person hearings in civil matters are going ahead, it appears likely that over the coming days and weeks, costs-related hearings which cannot be held remotely will be adjourned.
There are a number of different options for remote hearings, including Skype for Business, Zoom and BTMeetMe, as well as the more familiar BT Conferencing for telephone hearings. Most CCMCs and interlocutory hearings in costs matters should be capable of being dealt with remotely without undue difficulty, but assessment hearings present different challenges. During detailed assessments, advocates need to refer frequently to the file of papers in support of submissions, and to hand papers from the file up to the judge while the hearing is ongoing.
Most video conferencing software allows for screen mirroring, by means of which an advocate can show specific electronic documents to the judge while making submissions. The usefulness of screen mirroring will be constrained by the electronic documents available, however. In cases where the correspondence on the electronic file is not both logically ordered and easily accessible, or where the electronic file is not comprehensive, receiving parties will be well advised to seek adjournment of detailed assessment.
Where a full detailed assessment is impossible or undesirable, an alternative will be for the Court to deal with the paying party’s points of principle only and adjourn the hearing of the specific objections. Such an approach frequently facilitates settlement and, given the current situation, litigants will be expected to adopt a pragmatic and co-operative approach to alleviate the burden on the system.
