Cost budget variations: this is not going to end well.

Our senior litigator Myles Hickey has published this letter in the Law Gazette highlighting the negative affects new budget rules will have on the management of claims if courts go by the book:-

DJ Lethem's informed commentary (Variation of budgets - part 1 LSG 18.11.2013) reveals the problem caused by CPR PD3E paragraph 2.4. The court may only approve prospective budget variations. So if the litigator has responded to developments in the case to keep it moving before getting those steps approved, he or she would have to hope for a pragmatic and liberal interpretation of CPR 3.18 on detailed assessment at the end of the case (no departure from an approved or agreed budget "unless satisfied that there is good reason to do so"). As Christopher Lethem notes, such a calculated breach of the budget is a strategy fraught with danger. As a member of the CPRC, he should know.

He develops this in part 2 of his article (LSG 25.11.2013) with the observation that in the post Jackson costs regime, where proportionality trumps reasonableness, it is likely that standard basis assessment will reduce recoverable costs, so only the brave will seek detailed assessment.

Therefore litigators have no realistic alternative to seeking prospective budget variations once the budget is in danger of being exceeded. And they are then faced with the task of showing the variation is warranted through significant developments in the case, rather than oversight (or perhaps optimism that the opponent would cooperate) and all against the elegant and  unpredictable yardstick of “proportionality”. This PD seems to me a recipe for slowing down litigation,  snarling up court lists with applications and denying effective access to justice for those with cases with low or moderate multi-track value.

There is raucous approval in some commentary on the Jackson reforms by judges (though not this one) and defendant costs lawyers at the new powers of the courts to strip out costs. There is much talk of "robust" approaches. What it means in fact is that paying parties are likely to get a windfall, thoroughly undeserved, through the new provisions if they are not applied intelligently. As others have noted, this is an unfair and regressive outcome of changes which surely could not have been intended. The way to ensure justice on costs budgeting is for courts to adopt a low threshold for approving proposed budget variations and tackle paying parties’ objections “robustly”.  Otherwise the “costs wars” of the past 20 or so years will seem like playground games by comparison.

 

Myles Hickey

Car Passengers and the duty to cyclists

Paragraph 239 of the Highway Code imposes a duty upon drivers before they or their passenger(s) open a door, to make sure that it will not hit anyone passing on the road or pavement,  or force them to swerve.  They have a duty particularly to watch out for pedestrians, cyclists and motor cyclists.

Greta, a young, fit and experienced cyclist was knocked off her bike at night by an offside passenger who did not check before opening the door into her path. Greta’s bike was properly lit.  Greta struck the car door side on, and suffered spiral fractures to the metacarpals of two fingers on her left hand, which was trapped between her handlebar and the door.  She also had some small scarring to her face where she struck the floor.

The Police were uninterested in pursuing the passenger for a breach of her duties to Greta.   However,  failure by the Police to act is not by any means fatal to pursuing a successful civil claim.  A person will not be convicted unless they are believed to be guilty beyond reasonable doubt.  Civil claims are proved “on the balance of probabilities” which means “more likely than not”.  A claim was therefore made against the driver,  who was insured.   Insurers will normally deal with the liability of their insured’s passengers in these circumstances.

Although the passenger had been pretty unhelpful to Greta and had assumed that Police disinterest meant that she would face no further claims, her insurers took a more realistic attitude.   They did not allege that Greta had been cycling too close to the vehicle.   They did raise the absence of a cycling helmet as contributing to the facial injury Greta had suffered.

There were claims for loss of income (Greta had a number of casual jobs, paid in cash and proving loss was difficult).   They initially proposed a settlement figure of £10,000 but we persuaded them that a more realistic settlement would be £12,500. We made allowance for a possible argument about the absence of a cycle helmet contributing to the minor scar on her forehead.  (The law on cycle helmets is that the defendant has to show that the wearing of a helmet would have avoided or significantly reduced the chance of injury;  it is likely if they succeed in proving that,  the injured claimant’s compensation for that injury will be reduced by about 15%).

The insurers also paid Greta’s costs,  although under the new costs regime which the Government introduced last April,   Greta had to make a contribution.  The Government has fixed costs recoverable from the driver’s insurer at an unrealistically low rate,  which means that accident victims will commonly have to contribute to the cost of getting compensation.  Part of that cost is to pay the insurance premium for the policy taken out on all “No Win – No Fee” cases to protect the claimant against costs orders they may face.