My sympathy for defendant costs draftsmen

As a scumbag claimant it pains me to show any form of sympathy for the defendant side of the profession (actually, my dark secret includes a certain amount of defendant work – doing both side keeps you somewhat level headed).

With the above said, I do not envy defendant cost draftsmen when they have to negotiate costs at the end of a dispute. This is particularly relevant where settlement is reached at trial or a LONG way into the lifecycle of a claim.

Normal scenarios

Typically a defendant/paying party will have done 1 of 4 things:

  1. Settled on best terms – i.e. early settlement.
  2. Had a strategy assessing the risks and outlined when settlement was likely to breached (e.g. following disclosure of something your client wanted to hide, or upon receipt of expert evidence).
  3. Fought the claim to trial and lost.
  4. Trundled along hoping for the best and settled very late into proceedings when confronted with the difficult position they found themselves in.

Draftsmen are fine with 1 and 2.

The first method is pretty easy. It’s relatively cheap. The fight is based on quantum-only with discounts for solicitor-client costs and some “padding of hours” that has resulted in over-billing.

The second method is also ok. The papers normally show the strategy adopted by the client. This is normally a more thorough approach to handling defendant claims. The fee earner may have sensibly realised that the claim is (i) finely balanced and may tip against their client on one or more items in directions; or (ii) they realised that they would lose but adopted some robust tactics to try and bat it away (e.g. a tricky Part 18 request, or they ran a genuine limitation defence that could not be sustained).  A draftsman will be able to reconcile the steps taken by the claimant and the strategy taken by the defendant – i.e. they were put to certain types of work and you can distinguish between the costs that are payable and those which are not.

It is when number 3 come about that a draftsman faces increased challenges.

Loss at trial

This can be a shocker if the Part 36 protection is not achieved.

A draftsman will need to address each and every stage of attacking the bill from the cradle to the grave. It may be an uphill task particularly where costs budgeting has taken place, especially if the costs have been rubber stamped at a Costs and Case Management Conference.

This leaves the main arguments that tend to (but are not limited to):

  • Excessive time recording for tasks and duplication/unnecessary activities
  • Fee earner seniority for certain tasks (e.g. using Grade A fee earners for entire disclosure exercise rather than reviewing disclosure prepared by Grade C’s)
  • Solicitor-client costs that cannot be billed to the paying party
  • Certain disbursements that may not be recoverable (e.g. a shadow expert of the claimant’s single expert)

A skilled draftsman will still be able to chip away at the total bill as presented. A saving of say 30% on the bill would be a decent result, based on a “normal” bill without any time dumping by the claimant.

The ditherer

Costs draftsmen hate this type of settlement of a claim. This tends to be where a defendant fee earner has been out of their depth and/or misjudged the claim since it first landed on their desk. This is generally due to negligence. It frequently raises its head in firms that do not have an arrangement with Chambers to get Counsel on board for a second opinion (Here is a hint to these idiots – get Counsel to provide a short or narrow advice on the claim aspects when settling the Defence. You can get a decent steer from your barrister and, just as importantly, rely on their professional indemnity insurance. That said, there is still no valid excuse for not knowing the law.)

What normally happens is the ditherer will have been identified as being out of their comfort zone at an early stage in the claim. The claimant’s solicitor will then line up tried-and-tested techniques and put them into effect. It does not make pretty viewing.

The claimant’s solicitor will request a number of documents and information with the threat of applications. Some applications will be made; often handled by consent, and others will be sent in draft. The trick is to set deadlines that are missed. Remember, sending a draft application is a great technique as you can recover the cost of it, but avoid the risk of issuing (and potentially losing and paying costs) at Court.

As the defendant’s solicitor does not want to let the other side “know” (in their head they are oblivious to the fact it has already been established) they will play along with the game. Instead of this, they are like a dog chasing a stick when they should be standing their ground and being robust enough to respond with observations like “actually, you don’t need that” and “that’s a ridiculous request, make your application and attach a copy of my long and detailed letter addressing your intended application to your N244”.

The draftsman is in a difficult position as the chronology of the claim normally sees:

  • A lot of pre-litigation work incurred due to the defendant requesting information/documents which are then placed on file but not used to make a strong Part 36 offer to prevent the claimant issuing
  • A reactive approach – only challenging the evidence presented to them, rather than gathering their own evidence
  • Pre-action disclosure application or a threat for the same
  • Long pleadings
  • A rubbish defence
  • A reply to defence (which is normally valid)
  • Part 18 request (due to the rubbish defence)
  • A fight over directions as by this stage the defendant is getting nervous and lashing out as a defence mechanism to cover up their shortcomings
  • CMC costs – including potential application costs such as due to a refusal to mediate (Master Ungley / Master Jordan orders)
  • Costs budgeting
  • Disclosure (an area of major £££)
  • Application(s) relating to shoddy disclosure
  • Lengthy witness statements
  • Expert report(s)
  • Pre-trial review

Draftsmen who inherit these cases are really between a rock and a hard place.

Under the old regime of success fee uplifts, they could make the bill reductions look very impressive by negotiating a 100% uplift down to 50%. This slashed the bill even if most of the base cost time was reasonable.

Now that a lot of firms are not charging success fees, it means that draftsmen are limited in their arguments (see above regarding number 3 – loss at trial).

It puts them in a hard situation. Even chipping away at the bill cannot get away from paying a lot of valid stages of the claim. It is hard to challenge litigated claims if low amounts of time have been spent on activities/stages. It is normally at the pre-litigation stage with the countless “file reviews” where the fluffy time recording is carried out. With Court Directions it is very focussed and you will rarely succeed with arguments about unnecessary tasks if the claimant merely works their way through the Directions as handed down (with interim applications for non-compliance).

So what happens?

The poor suffering draftsmen settle on best terms. They generally strike a deal.

However, the fee earner will blame the draftsman as they have normally underestimated the reserve for their (insurer) client; and the draftsman will have to bite their tongue. If they grass up their solicitor client for being negligent then it will be a political disaster as they will get blacklisted by that firm/department; but likewise it is bad because if they bite their tongue then the client will think that both the solicitor and the defendant let them down. This could affect them if they are a panel firm.

The advice? You are a firm, not the Bar. Draftsmen do not have the cab rank rule, so when you identify a troublesome (read: negligent) defendant solicitor, then make a mental note of their name and refuse instructions to prevent a repeat incident.

Over and out.

Legal Orange.

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