All posts tagged Litigation Costs

Civil Justice Reforms Breakfast Seminar

Yesterday morning Kroll Ontrack hosted a breakfast seminar in Manchester in conjunction with the law firm Hill Dickinson LLP. We heard His Honour Judge Waksman QC (Manchester Mercantile Court) and His Honour Judge Davies (Manchester Technology and Construction Court) share their views on the impact of the cost management and disclosure aspects of the Jackson Reforms in their courts.

We discussed what impact the changes have had a month and a half into the period since implementation to compare experiences and to get an understanding of the types of orders judges are handing down.

Interestingly, the judges agreed that despite the menu of disclosure options now available to litigants, standard disclosure would still be the appropriate order in most cases. Rather than changing the type of disclosure order, Judge Davies said, the Court would take an active role specifying the extent of the search that should be carried out.   Judge Waksman stressed that the Disclosure Report was not intended to be a document that practitioners need to labour over, and a high level list of the classes of documents available will suffice.

Budgeting for standard disclosure on the Disclosure Report provides a bench mark upon which the approach to disclosure can be agreed by the parties and this is all that is required. Whilst there is a menu of disclosure options, there is no need to submit a menu of costs!

In relation to cost management, Judge Waksman said that the new rules do not represent a great watershed, pointing to the fact that the cost management pilot had helped to embed cultural change.

We discussed how there is real value in examining each party’s budget in order to be well prepared and ensure that the Case Management Conference is a meaningful exercise. Advance planning will pay dividends.

The court will not simply approve all directions that have been agreed by parties, but take an active role as cost management feeds into case management. Nevertheless, it is not intended that the examination of budgets will be a ‘gargantuan exercise’ nor a detailed assessment of costs. Judge Waksman expects that in his court these discussions will add an extra 10 minutes to the CMC, or 20 minutes if more complex and that in very many cases, the budget will be approved with few changes if any.

Kroll Ontrack led a discussion with panelists – Hudson Legal’s Tom Moore and the head of Hill Dickinson LLP’s litigation practice, Geraldine Ryan – to recommend the best ways to approach budgeting and disclosure in this environment.

The new rules place emphasis on early preparation and getting to grips with the likely challenges ahead. Working together it is possible to make logical decisions and apply the best technologies to evaluate risk, decide the optimum strategy and control costs.   As Judge Waksman pointed out in his closing comments there is no need for litigators to be afraid of the changes.

Daniel Kavan and Rob Jones would like to thank Judge Waksman and Judge Davies, Hill Dickinson LLP and our managed review partner Hudson Legal for helping us put together an enlightening seminar particularly relevant for Manchester litigators and their clients.

About Daniel Kavan

Daniel Kavan leads Kroll Ontrack’s Electronic Evidence Consultancy team in Europe. He and his team of experts advise lawyers and their clients on how to manage and analyse evidence from emails and other electronically-stored documents in legal matters including litigation, arbitration, internal audits and regulatory investigations.

One Month Today: Getting Ready for Jackson’s Civil Procedure Reforms

Jacksons-Civil-Procedure-Reforms

Last week we posted an update outlining all the latest details of the new costs management rules and the e-disclosure menu of options coming into effect this Easter in England and Wales. The legal community has had mixed reactions to these changes, which are only a few weeks away and constitute a significant part of the implementation of the recommendations in the Jackson Review.  A quick Twitter search for hash tag #jacksonreforms  shows plenty of debate about the implementation.  Law costs draftsperson Timothy Phillips tweets, “the Jackson Reforms would be as easy to master (but more fun!) if they were published in jigsaw format.”

The Law Society Gazette reported that litigators think that the Ministry of Justice’s handling of new rules to support the reforms as ‘shambolic’ and ‘deeply concerning,’ not leaving enough time for practitioners to prepare.  But the Government has pushed back, and as PLC reported, it rejected calls to delay implementation.  Last minute changes to the amended rules which have exempted large-scale cases from cost management have had some wondering whether this should be the case.

But it’s not all doom and gloom. Some of the changes will provide more flexibility in the way litigation is carried out. For example, rather than standard disclosure burdening parties in litigation, the court will decide whether to dispense with or limit disclosure, or any other order the court considers appropriate.  An analysis of the implications on practice, by my colleagues Tracey Stretton and James Morrey-Jones in conjunction with Eversheds Partner Mark Surguy, was recently published by the Society of Computers & Law. It also suggests some great ideas about how cutting edge technology could be used to do disclosure upside down, by handing the keys to the warehouse to the other side and jointly training a machine learning system on what kind of documents are relevant, and then letting the computer sort through the warehouse and decide what’s relevant and what’s not.

The rule change certainly provides an opportunity to think about litigation and disclosure with a fresh mind. To that end, on Thursday morning, March 21st, I will be hosting a breakfast seminar at which Senior Master Steven Whitaker will look at what has changed and why and what the implications might be on a panel with Pinsent Masons’ edisclosure expert Andrew Herring, Hudson Legal’s Director of edisclosure Tom Moore, and Kroll Ontrack’s Rob Jones.  I would encourage you to come along, enjoy breakfast on me, and contribute to the debate or listen to what the experts have to say. You can find all the details and register here.

What’s your reaction to the reforms? Please comment below.

About Daniel Kavan

Daniel Kavan leads Kroll Ontrack’s Electronic Evidence Consultancy team in Europe. He and his team of experts advise lawyers and their clients on how to manage and analyse evidence from emails and other electronically-stored documents in legal matters including litigation, arbitration, internal audits and regulatory investigations.

All Change! Are You Ready? – The New Cost Management Rules

Cost Management Rules

The way in which litigation costs are managed is about to fundamentally change in the UK. From 1 April 2013 new costs management rules will require litigants to prepare and exchange litigation budgets before the first case management conference. The courts will thereafter approve and actively manage cases within the parameters of these budgets.

Which Cases Will Be Affected?

The new regime was initially going to apply to cases in various courts across England and Wales except for cases in the Commercial Court.

In a statutory instrument laid before parliament on 12 February the new rules were set to apply to all multi-track cases commenced on or after 1 April 2013 in a county court or the Chancery Division or Queen’s Bench Division of the High Court (except the Admiralty and Commercial Courts), unless the proceedings are the subject of fixed costs or scale costs or the court otherwise orders.

See http://www.legislation.gov.uk/uksi/2013/262/made

In a last minute change to the rules announced on 21 February high value cases worth more than £2 million will also now be exempt from the new cost management regime unless the court so orders.

http://www.judiciary.gov.uk/JCO%2fDocuments%2fPractice+Directions%2fcosts-budgeting-announcement-draft-direction-cpr-rule-3-12.pdf

This means that cases before the Chancery Division, Technology and Construction Court (TCC) and Mercantile Courts, worth more than £2 million will not be subject to automatic cost management.

As is normally the case, the Courts have retained the discretion to apply the new regime to “any other proceedings where the court so orders”. A Court might therefore embark on active costs management as part of case management and order budgets to be prepared. Of course, a budget is not something that can be put together on the back of envelope, so there is some advantage to being prepared ahead of time.

How Will the New Rules Affect Your Cases?

If the new regime does apply to a case then only costs that have been budgeted for and approved by the court will be recovered at the end of a case. The Courts have indicated in early case law that they will not depart from the budget without good reason (Sylvia Henry v News Group Newspapers Ltd [2013] EWCA Civ 19). Costs will need to be tracked accurately and budgets will need to be living documents that are kept up to date.

The key concept underpinning the change is that of proportionality when it comes to litigation costs and this is now made clear in the overriding objectives of the rules. Even costs that are reasonably or necessarily incurred might not be recoverable if they are out of proportion to the value of the claim or the issues at stake in a case. You will therefore need to focus more on costs from the outset of a case, particularly on the relationship between the estimated costs of running the case and the most likely ultimate recovery at the end, and shape your litigation strategy around an informed cost/benefit analysis.

What About Disclosure?

In order to budget effectively, you will need to consider and quantify disclosure requirements early on in the life of a case rather than leaving it to the last minute, which tends to be the current practice. Importantly, you will need to focus on the scope or extent of the disclosure exercise from the outset because that will shape the cost of the exercise which follows. That is where the new CPR rule 31.5 comes into the picture. It applies to all cases (except for personal injury cases) and requires that:

  • no less than fourteen days before the first case management conference each party must file and serve a serve a report verified by a statement of truth, describing what documents exist, how and where they are located and stored and estimating the broad range of standard disclosure costs.
  • not less than seven days before the first case management conference, parties must agree a proposal in relation to disclosure.
  • a new menu of disclosure options will allow the courts the flexibility to adopt a far more tailored approach in substantial cases. This includes limiting the exchange of documents to those related to specific issues only or other novel approaches such as simply handing over the “keys to the warehouse” and allowing the other side to find the documents they need.

What Now?

Even before their introduction, the anticipated changes to the CPR are already being changed. There is no doubt, however, that we are entering a new era of cost management in litigation and that cases will require a greater degree of management from the outset. The need to file a report and cost estimate on disclosure is still a fundamental change even if the need to file case budgets under the cost management rules has been restricted. Technical expertise is likely to be very helpful as approaches to edisclosure are designed and costed. Innovative technologies and techniques such as Technology Assisted Review and outsourced review can reduce the burden and cost of disclosure and these have a role to play in reaching the goal of proportionality. We are primed and ready to help you when the new rules are implemented.

About Tracey Stretton

Tracey Stretton is a legal Consultant at Kroll Ontrack in the UK. Her role is to advise lawyers and their clients on the use of technology in legal practice. Her experience in legal technologies has evolved from exposure to its use as a lawyer and consultant on a large number of cases in a variety of international jurisdictions.