The Civil Procedure Rules Committee (CPRC) has approved changes to costs management with the aim of dealing with "significant delays in the pre-trial process”.
Draft minutes of July's CPRC meeting reported that there were broadly two reasons for the changes, "one is that costs management is being carried out in about every case, regardless of its particular features. And the other is that, because of rule 3.18, there is a natural nervousness that, if you don't include everything in your costs budget, you won't get it back on detailed assessment".
In light of the above, the 81st update to the Civil Procedure Rules will come into place on 1 October 2015 and a number of changes will be made. In particular, amendments to CPR47 and CPR47 PD5.2 will change the way detailed assessment proceedings are commenced.
CPR47.6(1) will be amended, to include subsection (1)(c), and will now require a receiving party to serve; (a) notice of commencement in the relevant practice form; (b) a copy of the bill of costs and; (c) if a costs management order has been made, a breakdown of the costs claimed for each phase of the proceedings, when commencing detailed assessment proceedings.
This breakdown of costs will be in model form Precedent Q and will show only the total sums for costs incurred before and after the budget which are claimed in each phase.
Jackson LJ has recommended that all courts should adopt this approach, in his speech “Confronting Costs Management" given on 13th May 2015. Further, Master Gordon-Saker stated that Precedent Q will assist to avoid the need for further directions to be given in each case.
Precedent Q will be a temporary measure, until the new format bill of costs is approved, to enable to the Court to comply with CPR3.18. CPR3.18 states that in any case where a costs management order has been made, when assessing costs on the standard basis, the court will have regard to the receiving party's last approved or agreed budget for each phase of the proceedings and will not depart from this unless there is good reason to do so.
Issues were raised by the Court regarding their ability to comply with CPR3.18 in the recent case of BP v Cardiff & Vale University Local Health Board  EWHC B13 (Costs) before Master Gordon-Saker. Concerns were also raised in relation to the new breakdown of costs, which will only show the total sums for costs incurred before and after the budget which are claimed in each phase. Master Gordon-Saker stated that the new format of bill should avoid these difficulties. Suggestions in relation to completing the new format bill of costs were also provided within this judgement.
A voluntary pilot of the new bill of costs is set to begin on 1 October 2015. The new format has been approved by the CPRC. The aim is to make it mandatory to use the new format bill of costs from April 2016. For the meantime, from 1 October 2015, it will be necessary to prepare Precedent Q.
Fortunately Paragon Costs are using the latest software and have been phasing their bills of costs since the reforms came in. We will be able to produce such breakdowns at the touch of a button.