Detailed assessments of litigation costs

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.

Most of those who visit this site are primarily interested in the disclosure and electronic disclosure sections of Lord Justice Jackson’s report, and in the case management aspects of which disclosure forms a major part. That is, however, but a tiny corner of the problem with which Sir Rupert Jackson is grappling. The costs implications range from fundamental issues of principle to methods of funding litigation and down to the mechanics of assessment.

Costs are like e-disclosure in that they lie at the junction between a technical subject and the Civil Procedure Rules. The other thing they have in common with e-disclosure is that judges have no experience or training in the subject. They will, of course, have had to advise on and argue about costs as a liability point, but will not have had to concern themselves with actual quantification, just as the logistics of electronic disclosure rarely fell to them as barristers. One of the options being considered by Lord Justice Jackson is that costs management will become part of the judges’ case management role. Many will rise to this — you do not get to be a judge without the ability to pick up new subjects from scratch. Nevertheless, it is asking a lot of any judge to get his mind round, say, the proportionality of a proposed disclosure exercise and the costs implications which go with it, whether this is done in advance (as Sir Rupert intends) or in retrospect.

The latter involves two broad options, depending on the case. They might be dealt with by a summary assessment by the judge hearing the case, which inevitably involves a slightly rough and ready element but has the benefit of the judge’s involvement in the case; alternatively, they might be sent off to a costs judge who knows everything there is to know about the assessment of costs but nothing of the handling of the case beyond what appears in the documents. Inevitably, the parties must then present their claims as compellingly as possible, and that involves what is effectively satellite litigation about the costs.

I am prompted to these thoughts by a kind comment made on my post Jackson litigation costs consultation ends by Simon Gibbs of Gibbs Wyatt Stone, who describe themselves as “defendant costs specialists”. You may be interested in his article Changes to the assessment process about one of Lord Justice Jackson’s Costs Review Seminars. The conflict which the article describes, between a list of chronological items of work (as now) and “providing an explanation as to why certain work was necessary or why this work was unusually time-consuming” is an interesting one. The present approach has the merit of forcing parties to stick to the hard facts, and is presumably both quicker to complete and easier for the costs judge to assimilate. The proposed change, effectively encouraging a more discursive approach, allows the party to try and justify something which will not necessarily be obvious to a costs judge not involved in the case.

I am in what appears to be the minority, with Mr Gibbs. Much as I would like the opportunity to explain why the costs of a particular task escalated, the potential for a whole new and expensive war on the subject seems considerable.

I am content now, as I was in 1978, to leave the deeper mysteries of litigation costs to those who know about them, but, for as long as we have the so-called “English system”, under which successful parties can expect to recover a contribution to the costs from the loser, those of us interested in making the courts more accessible need to understand something of the problems which arise at the very end of the process.

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About Chris Dale

I have been an English solicitor since 1980. I run the e-Disclosure Information Project which collects and comments on information about electronic disclosure / eDiscovery and related subjects in the UK, the US, AsiaPac and elsewhere
This entry was posted in Discovery, eDisclosure, eDiscovery, Electronic disclosure, Litigation, Litigation costs, Litigation Support, Lord Justice Jackson. Bookmark the permalink.

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