Jackson reforms: The unintended consequence?
Sarah Wearmouth and Ben Hardiman, from law firm Mills & Reeve’s professional indemnity team in Manchester, detail the implications of the recent changes to civil procedure rules in the shape of the Jackson reforms.
In keeping with the CPR requirement that cases must be dealt with “justly and at proportionate cost”, the recent reforms to the Civil Procedure Rules spearheaded by Lord Justice Jackson introduce provisions aimed at ensuring that solicitors and the court maintain stricter control of the costs incurred throughout the litigation process, in particular by costs budgeting.
But what does this mean in practice and, more importantly, what might happen when a costs budget doesn’t go to plan?
What has changed?
Subject to limited exceptions, CPR 3.13 provides that all represented parties engaged in multi-track proceedings must file and exchange costs budgets (known as Precedent H) before the first case of management conference.
The draconian consquence of a failure to file a costs budget in the time specified is that a successful party will only be entitled to recover court fees whilst a defaulting party can make an application for relief from sanction, recent decisions such as Murray v Neil Dowlman Architecture Ltd, Berg vs Blackburn Rovers Football Club and Elvanite Full Circle Ltd vs AMEC Earth & Environmental (UK) Ltd suggest it will be difficult to persuade the court that relief should be granted. The result is that a very difficult conversation between solicitor and client is likely to follow if successful clients are unable to recover their legal fees from their opponents because of their own solicitors’ failure to comply with a deadline. ”
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