JACKSON SEMINAR -7 May 2013

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Jackson Costs Reforms –
Do we need to revisit our approach?
Simon Johnson
7th May 2013
CFA
Previous Position
Success fees recoverable from D if C succeeds.
Maximum permitted: 100%
After 1st April 2013
• Success fees irrecoverable from losing party
• Success fees payable by C to solicitor, capped
at 25% ( excluding future care and loss)
• Applies to net damages after CRU
• Mesothelioma claims exempted
Success fees capped at
of general damages
ATE Premium
Previous Position
C insures against the risk of losing.
If C wins, premium recoverable from D.
From 1st April 2013
• Recoverability of premiums abolished for any
CFA entered into after this date
But
• Experts fees in clinical negligence; and
• Mesothelioma claims exempt
Claimant Costs Schedule: Fast-Track
Claimant Costs Schedule: Fast-Track
Claimant Costs Schedule: Fast-Track
What should we do differently?
• Draw claim out to the end of the limitation
period
• Rise in number of unrepresented Claimants –
protect settlement against challenge
• Such Claimants often fall foul of time-table –
keep paper trail of correspondence
Different Approach?
Be more robust in defence – especially low-value
claims.
Remember
• Greater certainty over cost of losing.
• No success fee/ATE premium to pay
Increase in General Damages
Simmons v Castle [2012]
• Increase of 10% in general damages in cases
concluded after 1st April 2013
• But only where the CFA entered into after 1st
April 2013
• Will also apply to non-CFA cases concluded
after 1st April 2013
Awards of general damages for PSLA
to be increased by
QOCS
Previous Position
Losing party pays winner’s reasonable costs
QOCS
From 1st April 2013
• If C wins, he or she still recovers costs
• If C loses or discontinues, D cannot recover
their costs
Exceptions
QOCS protection lost if:• Claim is found to be fraudulent
• C has failed to beat D’s part 36 offer
• Case has been struck out where:i. No reasonable grounds for bringing claim;
ii. Proceedings are an abuse of process; or
iii. Conduct likely to obstruct just disposal
Our approach?
• Plead fraud more frequently, where reasonable
• Increase use of surveillance, where justified
• Be more aggressive with strike-out applications
(e.g flagrant disregard for court orders)
• Do not neglect thinking about abuse of process
Examples – Please see Hand-out
Part 36
Previous Position
If C makes an offer which is not accepted/not
beaten at trial, D pays costs and:• Enhanced rates of interest
• Enhanced costs (indemnity rather than
standard basis)
Previous Position
If D makes an offer which is not accepted and not
beaten at trial:• C pays D’s costs from 21 days after offer made
to trial
• C pays own costs during that period
From 1st April 2013
Claimant’s Offers
D who fails to beat them at trial will pay an
extra 10% of damages (up to £500k) – separate
from Simmons v Castle [2012]
5% uplift on element of the award between
£500k-£1m (maximum £75k uplift)
From 1st April 2013
Defendant’s offers
If C fails to beat it at trial, will be liable for D’s
costs and own costs from date of part 36 to trial.
But – capped at level of damages recovered.
Key exception to QOCS.
Example
• D makes Part 36 of £10,000 on 1st June 2013
• C does not accept and goes to trial on 1st
August 2013
• C is awarded £9000 damages
• C pays D’s costs from 22nd June 2013 to trial,
capped at £9000
Part 36 Tactics
Claimant offers
• If liability is likely to attach and it is realistic, do
not delay in accepting – avoid 10% uplift for
failing to beat
• Do not leave quantum to one side at the outset
• Make early investigations as thorough and
effective as possible
Part 36 Tactics
Defendant offers
• Make as early as possible; C will be cautious in
view of risk of losing QOCS protection
Costs Budgeting – Multi-Track
Previous Position
Retrospective detailed assessment.
From 1st April 2013
Parties exchange costs budgets within 28 days of
the defence.
If one or the other party objects, court intervenes.
Costs Budgeting – Multi-Track
When assessing costs at conclusion, the court:• Will have regard to the receiving party’s last
approved budget; and
• Will not depart from such approved budget
unless there is good reason to do so
Our approach?
Clients will need to be involved in:• Preparing D’s budget (in case QOCS exception
comes into play); and
• Assessing C’s draft budget and preparing the
challenge.
Spotlight on costs at the beginning.
Our approach?
Henry v News Group Ltd [2012]
• No good reason to depart from courtapproved budget
• C left with a £300k shortfall (Judgment on
appeal imminent)
Our approach?
Safetynet Securities Ltd v Coppage [2012]
• Winning C came in on budget
• Detailed assessment “was futile”
• Ordered costs paid within 14 days of trial
We must get used to budgeting and, getting it right
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