Kerry Underwood

CAPPED COSTS IN BUSINESS AND PROPERTY COURT – VOLUNTARY SCHEME

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Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

The two year voluntary pilot scheme came in on 14 January 2019 and is based on the existing one in the Intellectual Property and Enterprise Court, which is widely seen as being very successful.

As with the Intellectual Property and Enterprise Court, clients have certainty of maximum exposure to the other side’s costs, and this is expected to lead to a sharp increase in work for commercial lawyers.

It is running in the London Circuit Commercial Court and in Manchester District Registry and Leeds District Registry in the Circuit Commercial Courts, the Technology and Construction Courts and the Chancery courts.

It is open to cases:

  • with damages of £250,000 or less;
  • requiring a trial of no more than two days;
  • where there is no allegation of fraud.

Any case which is likely to require extensive disclosure or reliance upon extensive witnesses or expert evidence or to involve numerous issues or parties may be excluded.

The procedure is contained in Practice Direction 51W (PD 51W) contained in the Civil Procedure Rules Committee’s 102nd CPR Update – Practice Direction Amendments.

The Ministry of Justice has also issued an information bulletin.

Key features include:

  • Particulars of Claim limited to 20 pages and defence with counter-claim limited to 20 pages and other statements of case limited to 15 pages of case accompanied by a core bundle – PD 51W.2.9;
  • witness statements limited to 15 pages and confined to matters in the list of issues – PD 51W.2.31;
  • no expert evidence unless the court orders under PD 51W.2.33;
  • oral evidence from two witnesses per party;
  • no costs budgeting.

No later than 21 days after the trial, the parties must produce schedules of costs for summary assessment and a costs cap applies to each stage, with an overall cap of £80,000 plus VAT, court fees and enforcement costs.

Wasted costs may be ordered in addition to the capped costs.

Costs are capped, not fixed, and so a summary assessment procedure is still required.

Claims are commenced by issuing in the Capped Costs List and leave if the defendant objects in the defence to the matter remaining in the list.

The parties can agree before the Case Management Conference to the matter exiting the list, even if the defendant did not object in the defence.

The court can, at the Case Management Conference, order the matter out of the List – PD 51W.2.2.

The parties can agree to transfer into the List an action not commenced in the List – PD 51W.2.1.

Costs

The Capped Costs Table appears at the end of Practice Direction 51W and I set the table out in full below.

Although the overall total is £80,000, the sum of the total of each of the caps is £98,000.

Thus it is possible to hit the maximum of £80,000 without completing all of the stages, or without reaching the maximum in any given stage.

For example let us assume that there were no experts’ reports – stage maximum £10,000 – and no reply and defence to counterclaim as there was no counterclaim – stage maximum £6,000, that would reduce the overall total possibly available from £98,000 to £82,000, capped at £80,000.

The absence of two stages with maximum capped costs of £16,000 does not come off of the overall maximum of £80,000.

These capped costs are by reference to phase, and not just the stage that the court process has reached, and therefore great care needs to be taken to see what work properly belongs in what stage/phase.

Clearly the idea is to avoid exceeding the cap in any given stage, as the costs will then be reduced to that cap.

THE TABLE

Work done in respect of Maximum amount of costs
Pre-action £10,000
Particulars of claim £7,000
Defence and counterclaim £7,000
Reply and defence to counterclaim £6,000
Case management conference £6,000
Disclosure £6,000
Witness statements £8,000
Experts’ reports £10,000
Trial and judgment £20,000
Settlement / negotiations / mediation £10,000
Making or responding to an application £3,000
Work done post-issue which is not otherwise covered by any of the stages above £5,000
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Written by kerryunderwood

January 25, 2019 at 6:33 am

Posted in Uncategorized

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