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Judiciary buy in critical to new litigation costs scheme success

28 September 2011

One of the lawyers involved in drafting the Practice Direction designed to control the spiralling cost of litigation is calling on lawyers and the judiciary to buy into the scheme on the eve of its extension to all Technology and Construction Courts (TCCs) and the Mercantile Courts.

The pilot scheme has been implemented by Practice Direction 51G and is being extended to all TCCs and the Mercantile Courts from 1 October 2011 until 30 September 2012, after a successful pilot was run in the Birmingham TCC in 2009.

The scheme was introduced in the wake of Lord Justice Jacksons civil litigation costs review in 2009.

Under the scheme litigants will have to file and exchange cost budgets. Judges will then have the right to approve or disapprove the costs budget.

If one parties costs increase significantly over time they will have to explain to the court the reasons for the change.

Parties can also report the other party to the court if they believe they are spending money disproportionately on costs.

Nichola Evans, a partner at law firm Browne Jacobson and a member of the Working Party which drafted the new Practice Direction, is hopeful that the changes will help control costs and for parties in litigation to be given a realistic and commercial view at an early stage of the litigation of precisely what costs are anticipated at each stage of the claim:

"This is an innovative scheme which in time should make a major contribution in controlling the costs of litigation.

"The onus will certainly be upon solicitors to properly project manage their litigation and to provide the court with accurate costs advice to allow the courts to make decisions as to how cases ought to proceed.

"Whilst at first blush the spreadsheet could look daunting the reality is that the cost information is what a solicitor is obliged to give their own client in any event.

"Getting a budget wrong or not properly strategising a claim could have major consequences for a client as well with the courts becoming more interventionist and taking bold decisions on what costs will be allowed.

"One can only hope that the judiciary buys fully into this scheme to allow much more dynamic management of claims to ensure that cases are dealt with as cost efficiently as possible. Who knows - if this scheme is a success we may see the scheme extended to other courts! "

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