Detailed assessments of litigation costs

August 18, 2009

Everything was a mystery when I became an articled clerk in the late 1970s, not least that label “articled clerk”. Your articles were a period of apprenticeship, and the name also of the document which you and your principal signed by which he was bound to instruct you in the mysteries of legal practice. Of all the mysteries, the darkest was the job of the costs draftsmen. Literally darkest in fact, since these two elderly gentlemen shared a large gloomy room in the basement of the firm’s Georgian building in Gray’s Inn. My visits to them were rare, probably to deliver a file found to be missing from the huge piles which surrounded them. I never saw them anywhere else in the office. From time to time, a pile of files would return from its (always prolonged) stint in the basement, accompanied by pages of narrative and figures on stiff, strangely ruled, paper.

Firms of that size had not, until recently, had litigation partners. The client partner fronted the case, with the unglamorous parts falling to a managing clerk. The managing clerk’s office, also in the basement, had been turned into a stationery cupboard by my day, which gives some idea of his status.

In due course, the two old gentlemen disappeared and their role was contracted out. I recall taking part in only one formal dispute over the costs payable by the loser to the winner. My recollection is that my opponent was as ignorant as I was about the procedure, the principles and the components of the bill.

The costs of arguing about costs were a powerful disincentive to agree them, and it was usually possible to lump the costs in with the settlement figure or agree a rough and ready percentage of the fees actually paid by the winning party. Nothing much changes, I suspect, except that the amounts now are much larger, both absolutely and as a proportion of the sums in issue. Many cases are fought on, long after the parties have lost interest in the issues, because the sunk costs are so high. Read the rest of this entry »


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