Costs: the absence of war

On Saturday 12 July the Bar Council held its annual remuneration conference. Perhaps inevitably the discussion both in and outside the conference rooms was dominated by Mitchell and Denton.

Mark Friston, Chairman of the Bar Council’s Civil Private Panel, suggested that one consequence of Mitchelling is the relative dearth of cases in relation to costs budgeting and the new proportionality rule. It is surprising that, apart from some exceptions, more than a year after the Civil Procedure Rules neither of these issues have attracted the attention of the Court of Appeal.

No doubt the impact of the Mitchell decision explains this, but perhaps there is a larger point. The only reasonable prediction that can be made about the impact of Civil Justice Reforms is that any prediction will be wrong. Many were no doubt fearful that the new rule on proportionality, costs budgeting, and QUOCS, would be a potent source of satellite litigation. So far this does not appear to be the case. Perhaps most remarkably, as far as we are aware, no decision has yet been made on the vexed issue of transitional CFAs.

Why then has there been no repeat of the costs war? Is Mitchell simply an opening salvo of what is to come? Bearing in mind the earlier mentioned rule against predictions, two thoughts occur. The first that to some extent at least the costs war was fuelled by the court indicating a strong review that breach of complex regulations would lead to severe consequences for those in default, providing the paying party with extremely good reasons to bring challenges. By contrast in Mitchell 2 the court has indicated that challenges to trivial breaches will not be tolerated and the party bringing such applications will face adverse consequences. The second is that the lessons of the costs war have been learned. Costs matter. The risks to both sides can be huge. Compromise and agreement reflect neither capitulation nor weakness but perhaps a new maturity and an understanding that, to paraphrase the Duke of Wellington, the only thing worse than a costs battle lost is a costs battle won.

Mark Friston was speaking at workshop session chaired by Martyn McLeish of Cloisters.