Costs Management - marriage of convenience or arranged marriage?
The words of Just Costs’ head Phil Bradbury rings true when he describes the relationship most lawyers have with costs management as a “marriage of convenience”. He said: “There’s no love or affection for the process, but it’s better the devil you know and they won’t be filing for divorce any time soon.”
We could take this concept one step further by describing it as an arranged marriage as with most big developments in legal processes, it tends to have been imposed upon lawyers.
Commercial litigators are particularly sensitive to the lack of consistency in the judicial approach towards cost management depending on which county court (or judge) is dealing with the case and the lack of guidance as to what “proportionate costs” means when they’re tasked with reviewing parties’ budgets.
A comprehensive poll by Just Costs found that after four years only 17% of commercial lawyers believed the costs procedure had had a “positive” impact and 23% said “neutral”. Personal Injury lawyers were even less cheerful with just 10% saying costs management had had a positive impact.
However, all things considered the overwhelming majority (90%) of PI solicitors and 78% of commercial litigators preferred costs management to fixed recoverable costs unquestionably.
This homogenous opinion is largely driven by recognition that fixed costs simply does not fulfill the needs of legally complex cases. Any sort of apportioned costs bands would not allow for the protracted amount of work needed to obtain a successful outcome considering they tend to be low value cases; access-to-justice issues being a flashpoint for many in legal circles.
However, where commercial and PI part ways is in how they complete their Precedent Hs. A Just Costs survey reveals that commercial litigators tend to deal with them in-house (63%) whilst the majority (70%) of PI lawyers outsource the work to costs specialists. There’s a widespread frustration however with the Excel format of Precedent H with reformatting problems and deleted formulas commonplace which begs the question can this even guarantee the accuracy of the final figures or costs outcomes? Lack of training in Excel and the presumption that solicitors are Excel-savvy have left many up in arms. These issues could however be overcome if LHQ software is used as it produces Precedent H seamlessly on the input of information (easily on a budget report for estimated costs and from the law firm PMS for incurred costs) so avoiding any extensive use or knowledge of Excel.
Moreover, if the judiciary were to employ a software system like LHQ that enables the creation of a database of historical average costs budgets of similar cases which could be available across the courts system. Judges would then use the database figures as a ‘guide’ so reducing the potential postcode lottery and at the same time negating the need for the imposition of fixed costs.