INTERIM APPLICATIONS, ADVOCACY FEES, 12.5% UPLIFT: MORE FIXED COSTS ISSUES
CPR 45.29H (1) allows a court to make an order for costs of an interim application and specifies that that shall be for a sum equivalent to one half of the applicable Type A and Type B costs in Table 6 or 6A.
CPR 45.29J (1) provides that if there are exceptional circumstances the court may award an amount of costs which is greater than the fixed costs referred to in rules 45.29B to 45.29H. That must include interim applications as 45.29H deals only with interim applications.
CPR 45.29J (2) allows the court to carry out a summary assessment of such costs. That could mean the judge waiting until the end of the case and then summarily assessing all costs but one would expect the rule to spell that out if it were the case. It makes sense to allow immediate summary assessment as most cases settle and would not be subject to any further assessment process. A party would then need to apply to escape fixed costs in relation to just one interim application. That would involve a hearing over a relatively small sum which could have been dealt with by the judge in a couple of minutes at the end of the interim application hearing.
The Practice Direction does not help.
Some courts are summarily assessing costs at the end of an interim application. Examples of cases where judges have found exceptional circumstances justifying an escape from fixed costs include a defendant’s failed application to set aside judgment and resile from an admission and a defendant’s application for relief from sanctions.
It is not clear what the position is in relation to interim application costs where there is more than one claimant.
Given that a Type A payment reflects the work involved in preparation for a paper hearing, there should be a payment for each claimant, just as there is for preparing for trial.
That logic cannot necessarily be carried over to Type B costs which cover the advocacy as at the trial of a fixed costs case only one advocacy fee is awarded, albeit aggregated by adding up the value of each claim to arrive at a total which may trip the matter into a higher band and thus a higher fee. That cannot happen on an interim application.
CPR 45.29H (2) provides for the 12.5% London enhancement in relation to interim application costs. It has been suggested that that indicates that the fixed cost is for each party and not intended to be a single payment to be shared. However exactly the same point applies to advocacy costs at trial, where there is only one advocacy fee, albeit a potentially higher one as the value of the claims is aggregated as set out above.
On balance my view is that only one advocacy fee is recoverable for an interim application, however many claimants there are. There is nothing to stop a court finding that a multiplicity of claimants constitutes exceptional circumstances warranting advocacy costs greater than Fixed Recoverable Costs.
Practice Direction guidance would be welcomed.
Advocacy Fees, Multiple Claimants and the 12.5% Uplift
Suppose that an advocate appears for say four clients, each of whom recovers £4,000.00, giving a total of £16,000.00 which is within the upper band and thus attracts an advocacy fee of £1,705.00.
If one of those claimants is a London claimant attracting a 12.5% uplift, is that applied to the whole sum or is only a quarter, that is 3.125%, applied to reflect the fact that only a quarter of the claimants is London based?
It becomes more complicated if the claimants recover different sums. Suppose the total awarded is £20,000.00, of which the London claimant gets £8,000.00 and the other three get £4,000.00 each. That total attracts an advocacy fee of £1,705.00.
Given that the London claimant has received 40% of the total damages is the enhancement then 5% of the total to reflect the fact that 5% is 40% of the enhancement of 12.5%?
At present this involves relatively small sums. That will change as Fixed Recoverable Costs spread horizontally to other areas of work and vertically to cover higher levels of damages.
On a multiparty multimillion pound one month trial with a leader and a junior the sums will be significant.
Is it not time this 12.5% lawyers London weighting allowance was scrapped?
I will be dealing with this at length in – KERRY’S 60th BIRTHDAY TOUR 2016!
My book on Fixed Costs will be available shortly and is free to anyone booking a place on the Portals and Fixed Recoverable Costs course.
Meanwhile you can visit my related blogs –