UK: Civil Justice Council (‘CJC') Working Group's Final Report

The report from the CJC working group (led by Lord Justice Biriss) makes recommendations in the area of guideline hourly rates ('GHR's), costs budgeting, pre-action and digitisation and the consequences of the extension of fixed recoverable costs ('FRC's').

It is evident that there are clear winners and losers arising from the report's recommendations, of which the first three issues are summarised below, with the extension of FRC's, commented upon previously.

• Costs budgeting / management recommendations

The report confirms that costs budgeting is here to stay; however, there is also an appreciation that 'one size does not fit all.' Claims where Qualified One-way Costs Shifting ('QOCS') applies no longer requires a party to complete the whole of the Precedent H form, rather only the front sheet, whilst preserving the right of the court to require a fully completed Precedent H form.

The introduction of "costs budgeting lite" for cases worth between £100,000 and £1 million, together with the separation of the roles of case and costs management splitting, akin to a staged approach i.e., address costs management once the case management has been concluded, enables the parties to focus on the costs required in compliance with directions and not anticipated steps at the point of drafting the Precedent H.

Other notable recommendations include: -

• Earlier deadlines for budget discussion reports to provide for a longer period to permit negotiations;
• The simplification of the precedent T process for varying budgets;
• Greater reliance on the hourly rates and incurred; and
• Powers to refer costs budgeting to specialist judges i.e., Costs and Regional Costs Judges.

Any reference to hourly rates within the costs management process would represent a sea change; however, a welcomed one, but arguably one that may fetter any future detailed assessment.

Guideline hourly rates recommendations

No time soon will we be seeing an end to the GHR's, which benefit all parties in affording, to a degree, certainty and are to be welcomed. In terms of widening that certainty, counsel's hourly rates are to be included, which will finally give rise to a long awaited expense of time calculation justifying the levels currently paid.

The GHR's remain subject to annual index (SSPI) linked increases on the 1st of January each year, together with an overarching detailed review of GHR's every five years, assumed next to take place in 2026.

Pre-action and digitisation recommendations

An extension to CPR 46.14 to deal with the incidence of costs where parties have settled the substantive dispute but where there is no agreement on who pays. This proposed extension to CPR 46.14 may enable parties at a very early stage to isolate any dispute as to the principle of payor in addition to amount.