We post a monthly costs update for Liverpool Law Society. This is the one for September 2022.
In our last update, we mentioned the imminent extension of fixed recoverable costs to most civil proceedings. One of the problems with fixed cots is that they can become ‘stuck’ costs. This is the case being made in elation to personal injury costs which have remained the same since 2013. It is fair to say that inflation has dominated the news recently. This is having a significant effect of the value of costs –
https://www.lawgazette.co.uk/claimants-call-for-review-of-stagnant-fixed-costs/5113462.article
The Gazette report refers to figures from the Association of Consumer Support Organizations which notes that the fee for a medical report in a straightforward case has been £180 since 2014. Inflation has increased the real cost to £225. Solicitors’ fees are similarly out of date, meaning that firms are effectively seeing a drop in the value of their work. This is something that should be addressed and will only get worse as more cases are forced into the regime.
A recent decision on Part 36 in a Housing Conditions case has looked at the question of injustice where a party accepts an offer out of time. Holly Wright (& others) -v- Birmingham City Council* and 8 linked cases had settled pre issue. The dispute was about costs. The claimants’ solicitors were claiming costs that the council argued were grossly excessive. The Claimants’ solicitors made Part 36 offers for significantly reduced costs. The council accepted the offers but deliberately did do out of time. This was to avoid the usual consequences following acceptance of a Part 36 offer. This was followed by an application for costs by the council against the claimants. This was based on the amount of the reduction, meaning that it would be unjust pursuant to Part 36.17(5) – “the Claimants’ ultimately accepted Part 36 offers on costs on average conceded just under 70% of the full costs claimed in the bills.”
The argument was rejected by Regional Costs judge Baldwin. Part 36 was designed to provide a clear and simple framework and “any party setting itself down the path of attempting to escape the norms of that framework and thereby continuing an element of division bears a heavy and significant burden of persuading the Court that therein lies the only route to a just outcome”
The council had chosen to accept the offers late in order to avoid the usual costs consequences. There were no factors stopping them from accepting the offers in time. There was therefore no injustice that justified departing from the norm.
“The problem with the choice made, in my view, in terms of the injustice argument, is that it smacks too much of a “cake and eat it” approach. In other words, the Defendant is trying to settle, “sort of” within the Part 36 ethos, but just sufficiently outside of it to try to overturn the normal costs consequences, by being highly critical by way of allegation against the Claimants, but without being prepared actually to have the argument, such that the Court might actually be able to use its findings, leading to reductions made, as a foundation for its overall costs of costs decision”
One positive piece of news is the extension of Pro Bono costs orders to Tribunal proceedings. These orders have been around in civil proceedings. If lawyers take on a case on this basis then there would not normally be any inter partes costs if they win because of the indemnity principle; there are no costs to pay. But if the court makes a pro bono costs order then the losing party can be required to pay the costs to the Access to Justice Foundation. This is a statutory power under s194 of the Legal Services Act 2007. On 22nd June 2022 this was extended to enable UK Tribunals to make similar orders. The power mirrors the Tribunals power to make costs orders in other circumstances.
September feel like the start of a new term! A busy costs year beckons…
*See – https://www.civillitigationbrief.com/2022/08/09/defendants-could-not-show-injustice-when-they-accepted-a-part-36-offer-out-of-time-part-36-is-intended-to-be-a-two-way-straight-and-narrow-highway/