Speaking at a recent Kennedys' healthcare seminar, Master Cook provided his perspective of the impact of a key aspect of the Jackson reforms - costs management, including costs budgeting.

Master Cook was appointed a Queen’s Bench Division Master in 2011 and has been one of the assigned Masters dealing with the case management of clinical negligence claims within the Royal Courts of Justice.

His talk served as a stark warning of the increased importance of compliance with court orders, rules and directions but also of the need to adopt a more collaborative approach with claimants.

Costs management

Master Cook highlighted the underlying principle in respect of costs management (as set out in Lord Jackson’s recommendations). The courts now have to actively attempt to control the costs of cases, with input from the parties. The essence of costs budgeting is that the costs of litigation are planned in advance. Subsequently, litigation is to be managed and conducted in such a way as to keep the costs within the budget. Master Cook viewed this as a radical change.

He drew attention to the new wording of CPR Part 3.12(2), which sets out the purpose of case management: that the courts should manage both the steps to be taken and the costs to be incurred by the parties so as to further the overriding objective. Master Cook explained there has been a change to the overriding objective, in that the courts must deal with a case not only justly but now also at proportionate cost. This includes enforcing compliance with rules, practice directions and orders.

Compliance

Master Cook warned that the courts will now take a much sterner view of any failures to comply. If a timetable was put in place, this was now to be adhered to more strictly than in the past. A court would be unlikely to allow more time without there being a very good reason. If any party failed to comply with rules, practice directions or orders, the courts would be looking to place a sanction on that party. In particular, there will be greater use of unless orders.

This does not rule out the possibility of a party being given some room for manoeuvre. In order to obtain relief from any sanctions, legal practitioners will have to go "cap in hand" to the court. However, CPR Part 3.9(1) (as modified) states that, on any application for relief from any sanction imposed by a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances, including the need (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders.

Costs budgets - a collaborative process

The filing and exchanging of cost budgets has been introduced under the new CPR Part 3.13. Master Cook envisaged cost budgets will be ordered to be exchanged six weeks before the first case management conference. He warned the cost budgeting exercise had to be collaborative. Parties should reasonably discuss and explore the key issues and try to reach an early understanding and agreement as to how a case should be dealt with.

He highlighted that experts' fees will form a substantial part of a budget in clinical negligence claims. Under the revised CPR Part 35.4, when parties apply for permission to rely on an expert they must now provide details of the identity, field and cost of the proposed expert. This is a key issue for the parties to consider and they will need to do so at an early stage.

Courts will approve budgets agreed between the parties or hear submissions, where there is disagreement, at a new "costs management conference" likely to take place with the usual case management conference. A costs management order would then be made, which would thereafter control the parties' budgets in respect of recoverable costs.

Master Cook warned that, in the event of any unplanned circumstances, courts will adopt a robust approach and would need some persuading for future expenditure to be incurred outside the budget. For example, if it emerges at a later stage that a new expert is needed, and the result of this is that the costs will go over the budget allowed for experts, the starting position will be to refuse permission. This suggests the parties will need to have regard to any potential contingencies from the outset. All such contingencies must be set out and anticipated and fall within the cost budget.

Having said that, it will be possible for the parties to amend the cost budget in the event of "significant developments". CPR Practice Direction 3E, paragraph 2.6 allows the parties to revise the budget if such developments merit this. However, any amended budget would need to be submitted to the other parties for agreement first. If there was no agreement, amended budgets would have to be submitted to the court, which can then approve, vary or disapprove the revisions. Master Cook did not provide any specific guidance on what would constitute a "significant" development and we anticipate this is likely to require Court of Appeal guidance. He stated generally it was easy to envisage there being satellite litigation following the Jackson reforms.

The future

Master Cook concluded costs budgeting will have a huge impact on case management and will direct the course of proceedings. Greater co-operation between the parties will be required. Legal practitioners will have to ensure they have prepared their case in good time and carefully monitor how cases progress. Cases must be kept within the timetable and the cost budget if sanctions are to be avoided.

There were two key threads running through Master Cook’s talk:

  • The increasing need to comply with the directions timetable and any deadlines imposed.
  • The need to collaborate with claimants.

For a case to run smoothly, it must be carefully planned from the beginning and detailed consideration given by both parties, together, to anticipate the issues which will arise.

This highlights the importance of identifying clinicians and witnesses involved in a patient’s care right from the outset, so that steps to obtain statements and identify the correct specialism for expert evidence are taken as early as possible.

This will reduce the scope for failing to comply with a court timetable that is ordered at a later stage. Legal practitioners, medical defence organisations and medical bodies will need to work closely to promptly formulate pleadings and statements of case and also to get these approved and signed as early as possible.

Master Cook warned that the effect of the reforms may be to produce quicker or rougher justice, but this was better than no justice at all. It remains to be seen whether strict compliance and cost budgeting will lead to parties having to compromise the quality of their pleadings and expert evidence in order to avoid missing a deadline or spending more than the budget allows. Only time will tell.