ILTA Insight – litigation costs budgets

This is the third of a series of articles loosely based round the events in which I  participated last week. The recurring threads are the wide range of subjects which get swept up under or alongside eDisclosure / eDiscovery, and the opportunities available to new entrants to disputes resolution, not all for those with legal qualifications. This was particularly true of a post about my first ILTA Insight panel called ILTA Insight – the future by those whose future it is

My other ILTA panel was about litigation costs budgets. The Jackson reforms introduced the concept of costs management, with parties in most cases now required to set out in considerable detail the sums which they expect to incur for each stage of the litigation. My panel consisted of Richard Harrison of Laytons, Lee Gluyas of Nabarro and Jason Yalen of Accenture.

None of the panel members was against the idea of presenting clients with costs estimates – it is the legitimate expectation of clients engaging on large projects of any kind. Jason Yalen said that Accenture spends a lot of time and effort analysing the metrics of litigation and comparing historic data with the estimates they were given by lawyers. Lee Gluyas said that Nabarro had developed training and systems aimed at making informed predictions about each stage in a prospective case.

Richard Harrison is no less equipped with the tools and experience needed to predict costs. His objection is to the strait-jacket of Precedent H, which expects unrealistic granularity at a stage in the case where it is rarely possible to make predictions. He rejects the well-worn comparison with a construction project because a construction project does not have an opponent (to say nothing of a client and a judge) trying to destroy your building even as you are creating it.

To those who talk of differential budgets – one budget given to opponents and the court and the other to the clients – he points out that the statement of truth to be signed by the solicitor does not leave much room for two-tier budgets (The actual wording in PD 22 CPR is ‘This budget is a fair and accurate statement of incurred and estimated costs which it would be reasonable and proportionate for my client to incur in this litigation’. Further, he objects to the potential for giving away his litigation strategy by this early definition of what is to be done.

The result was all that I hope for from a panel – agreement about principles with polite differences about practicality, reflecting a context which no sensible person could assert that it is easy.

My theme here is new opportunities. When I qualified, bills of costs were drawn up retrospectively by two elderly men in the basement who emerged every so often with arcane calculations on specially designed paper. The last 18 months have seen a growth in the number of knowledgeable people skilled at the cross-roads of civil procedure and accounting (there may, of course, be some who are less knowledgeable, as in all new business types springing up to meet a new need).

We have also seen the development of software tools – those from Thomson Reuters Elite, for example – whose function is to enable prediction of stages and their costs and to allow the numbers – the hours, the charging rates, the costs of external providers – to be adjusted to help bring the overall total within a range which the court will consider proportionate. There is another potential career choice for those who don’t want to be lawyers but who are interested in the business decision-making which lawyers must undertake.

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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
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