Work underway on costs budgeting-lite

Key topics included the potential extension of guideline hourly rates (GHR) for counsel, ongoing challenges with applying proportionality to costs, and the role of artificial intelligence (AI) in costs management.

Key Developments in the Costs Review

Lord Justice Birrs emphasized that initial changes, such as increasing GHR, have already been made. The focus has now shifted to two long-term initiatives: piloting costs budgeting-lite and incorporating counsel into the GHR framework.

Evolving Approaches to Costs Budgeting

Jack Ridgway, ACL chair, noted a growing willingness among judges to require parties to exchange budgets and work together to reach agreements. David Marshall, chair of the Law Society’s civil justice committee, observed increased flexibility from judges in directing parties to negotiate their budgets. Costs Lawyer Steven Green suggested that costs budgeting-lite would simplify both preparation and discussions with clients.

Guideline Hourly Rates for Counsel

The introduction of GHR for counsel was largely welcomed for providing greater predictability. However, concerns were raised about the methodology for setting these rates. Roger Mallalieu KC expressed skepticism about how to gather the necessary evidence, given the historical challenges in determining solicitors' rates. Shaman Kapoor noted that assessing barristers' fees often lacks nuance and tends to focus on seniority without considering other factors like overhead costs.

The Confusion Between Proportionality and Reasonableness

A key discussion point was the confusion between reasonable and proportionate costs. Judge Rowley mentioned that many budgeting judges struggle to differentiate between the two concepts, while Ridgway emphasized that proportionality is important for protecting parties with fewer resources. The dialogue highlighted the lack of clarity on how these terms are applied in practice.

The Role of AI in Costs Management

The potential of AI to improve efficiency in bill drafting and case management was also discussed. Jack Ridgway pointed out that while AI can automate routine tasks, human oversight is still essential for complex advocacy and advisory roles. Steven Green compared the current conversation to past discussions about electronic billing, emphasizing the need for effective time recording systems to maximize AI's benefits.

Conclusion

The roundtable highlighted the evolving landscape of costs management in the legal sector, stressing the need for clear guidelines and the potential for technology to enhance efficiency. As the ACL continues to navigate these challenges, the emphasis remains on creating a fair and effective costs environment for all parties involved.

A full write-up of the roundtable can be found here.