ACL roundtable: Jack Ridgway (left) and Sir Colin Birss
The next steps to implement the Civil Justice Council’s 2023 costs review are underway, although it is not yet certain how far the guideline hourly rates (GHR) will be extended to counsel, the deputy head of civil justice has said.
Speaking at a roundtable organised by the Association of Costs Lawyers, Lord Justice Birss said that, with the most straightforward changes arising from the costs review he chaired having been made, like increasing the GHR, the focus was now on the longer-term projects.
There are two workstreams: the first to pilot the idea of costs budgeting-lite and the second to bring counsel into the GHR.
Shaman Kapoor of 39 Essex Chambers said GHR would introduce greater predictability, but Roger Mallalieu KC of 4 New Square was more guarded.
He accepted that they were coming either way – “It’s quite hard for counsel to mark themselves out as a special case, even if they wanted to” – but wondered where the evidence would come from to set the figures, given the difficulty over the years in establishing solicitors’ hourly rates.
He also questioned the use of geographical areas: “It’s not working very well for solicitors; it is even harder to see that working when it comes to barristers.”
Currently, Shaman Kapoor added, the assessment of barristers’ fees tended to be based just on level of call, with no thought to overheads: “It is a fairly blunt tool.”
But for Costs Judge Rowley, when solicitors’ hourly rates stopped being A+B (the cost of completing the work plus the profit element), “you lost a whole load of nuance about the weight of the case and all the rest of it.
“I think the same thing will happen with brief fees, however much we talk about it depending on all sorts of factors. It will end up being how many hours were spent and that will either be reasonable or not”.
Birss LJ explained that idea of the GHR extension was mainly to assist in the summary assessment of counsel’s fees. “I do not know whether we are going to end up with guideline hourly rates for counsel. Maybe we will. Maybe we will not. Maybe it will be broken down by specialisms. Maybe it will not.
“We need to have a better way of doing it than we currently have, which cannot be difficult because, currently, there is not anything. In terms of what it is, I am absolutely open to offers.”
For ACL chair Jack Ridgway, the main change in budgeting over the last year has been the willingness of masters to order parties to exchange budgets and then have their costs experts try and agree them. “The county courts are not necessarily moving as quickly, but some of them are starting to realise that there is a better approach.”
David Marshall, senior partner of London firm Anthony Gold and chair of the Law Society’s civil justice committee said he too has seen more flexibility, with masters undertaking directions and then asking the parties to go away and try to agree the budgets.
Costs lawyer Steven Green, partner and national head of costs at Irwin Mitchell, thought costs budgeting-lite would help: “It would be easier to prepare and easier to talk to the client about.”
The roundtable heard that, 11 years after the introduction of ‘proportionality’, the concept’s value was still unclear.
Judge Rowley said: “I am not sure most budgeting judges could tell you the difference between reasonable and proportionate. I think, in their head, it is the same concept.”
Mr Mallalieu agreed: “I could not tell you the difference between reasonable and proportionate and we argue about it. I have entirely failed to understand how you could ever end up at a level of costs that is said to be reasonable, taking into account complexity, value and all the other factors, but is also then said to be disproportionate.”
Mr Ridgway said he proportionality as “a wider test that says there are cases where we are not going to allow the little guy to be bullied, just because they do not have the resources. That is why it goes beyond value. How well that works in practice is another thing entirely”.
On artificial intelligence, he continued: “Bill drafting is, at its core, an accounting exercise with a lot of standardisation in terms of phases, tasks, activities, etc. Most people should be using electronic cases management systems of some sort and AI can make quite a significant difference.
“You still need to have someone go through the bill at the end, but the process of putting it together is ultimately a relatively menial task. It is not necessarily where a costs lawyer adds the most value.”
Mr Green reckoned the debate was little different to the one a decade or more ago on electronic bills and time recording.
“You can have all the AI you want, but if time recording is not pulling things through into budgets or bills, it just does not work. It is that behavioural, cultural thing. If people recorded the time, AI would have an impact.”
A full write-up of the roundtable can be found here.
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