Blog

Cost Law Commentary

Tips on the 2013 Supreme Court Scale and Rules

Statutory Rule 142 of 2012 introduced significant amendments to the Supreme Court Rules relating to costs and a radically different scale of costs, including a scale of costs for counsel's fees.  The amendments and scale have effect from 1 April 2013. Since that time, there has been relatively few taxations, with a significant proportion of the bill is pursuant to the new scale.  This is mainly because one of the amendments to the Rules only allows taxations of costs at the conclusion of a proceeding, unless an order is made to tax costs of an interlocutory order forthwith. However, from those few taxation, there are a learnings as to how litigators should manage their files to maximise cost recovery on behalf the clients.

In some respects, the amendments to the Rules have created a level of uncertainty regarding the likely outcome on taxation. Firstly, Taxing Officers now have discretion to both increase and decrease scale fees[1], save in respect of counsel’s fees as explained below.  Given that this involves an exercise of discretion and a subjective judgement on the part of the Taxing Officer, and that there are five different Taxing Officers in the Supreme Court, this can result in a considerable variation in approach. Secondly, Rule 63.85 provides that costs of preparing the bill or attending the taxation shall not be allowed if the bill (professional costs and disbursements) is reduced by 15% or more.  However, the rule gives the Taxing Officer discretion to otherwise order.

This rule causes difficulties for the draftsperson of the bill.  Cost allowances by their nature are often discretionary, both as to the fact of the work and the fees to be allowed.  There are significant differences in approach across the members of the Costs Court, and in some instances, this variation would be greater than 15%.  It is often said that the same bill could be taxed three times, with three different outcomes, given the extent of the exercise of the Taxing Officer’s subjective discretion. An additional difficulty arises in relation to claims for disbursements, including counsel’s fees.  It is problematic for a cost lawyer to “play” Taxing Officer when including counsel’s fees in a bill of costs, particularly where there is such a wide variation in approach across the Costs Court.

There is a significant variation in approach across Taxing Officers as to when they will exercise discretion to allow costs of preparation of the bill and attendance at taxation, where the bill has been reduced by more than 15%.  Some will have regard to the complexity of the matter and draw a distinction where the 15% reduction is as a result of a reduction principally to disbursements.  Others take the position that there needs to be special circumstances to avoid the application of Rule 63.85.

Counsel Fees

It is appropriate to remind litigators that the Supreme Court scale now includes a scale of counsel’s fees, and Taxing Officers only have discretion to allow counsel’s fees above the scale, if they are not taxing costs pursuant to an order of the Court.  Where the taxation is being conducted pursuant to a court order, counsel’s fees above scale will only be allowed in circumstances where the Court has ordered same.

Therefore, if counsel have charged at rates above scale, it is necessary to make application to the Court at the time the cost orders are being made, seeking that the Court certify fees above scale.  Most importantly, such certification should relate to all fees charged by counsel, including preparing pleadings, interlocutory appearances, conferences, mediation, preparation for hearing and appearance on trial.

Such applications are not limited to final orders.  Certification will be required in relation to interlocutory applications as well.

To date, I have rarely seen orders awarding counsel’s fees above scale in Supreme Court proceedings.

County Court Rules

It is also appropriate to point out that the County Court rules were amended with effect from 1 October 2014 and that the scale applying in the County Court is now the Supreme Court scale at 80%.

The Scale

Cost recovery will be maximised if practitioners maintain their file in a way to substantiate claims under particular items in the scale.

Perusals, Scanning and Examination (items 8, 9 and 10)

The scale incorporates three levels of document review – perusal (a close reading), scanning and examination.  Some documents, such as contracts, may involve all three levels of review.  The perusal allowances, in particular, can give very high rates of recovery, and may be the sort of items which are likely to attract the exercise of a Taxing Officer’s discretion to reduce the scale allowance.

Some Taxing Officer have regard to the time spent in reviewing documents in relation to the allowance review of documents.  For this reason, it is useful for solicitors to keep clear time records of document review.

Review and consideration (item 11)

The new scale allows fees for review and consideration of documents.  This accommodates review of a file or parts of a file, on the basis of time spent, where such review is reasonably undertaken when drafting documents, in preparation for conferences, hearings, taxations of costs and the like.  In order to recover this work, solicitors need to keep good records of the file reviews undertaken, and the time spent.

Delegation and supervision (item 12)

If it is appropriate for more than one lawyer to be involved in conducting the matter, an allowance can be made for delegation or supervision.  The allowance is calculated on a time spent basis.  The scale item reflects that delegation of work to appropriate personnel is expected by clients as an efficient and cost effective delivery of legal services.  A fairly common example is a matter managed by a supervising senior solicitor delegating specific tasks or aspects of the matter to more junior solicitors. The Taxing Officer will consider whether the matter was so large or complex that it could not be conducted by a single practitioner.  The item has been allowed in respect of internal meetings where a senior lawyer attends on a junior lawyer to give direction about work to be undertaken and team meetings in complex litigation.

However, the item is allowed on a time basis, and therefore it is necessary for a solicitor to be able to establish the time spent and the nature of the attendance. In turn, this can generally only be established by reference to a file note.

Research (Item 13)

Research is no longer part of care and attention but it must be

  • Appropriate,
  • Involve a legal question, of some complexity, not related to procedural matters

The allowance is calculated by reference to time.  If counsel has directed research, that factor should be noted on the file together with detail of what was researched and how.  It is necessary to keep sufficiently detailed notes of the nature of the research, including perhaps the cases considered.  Research of matters which would be expected to be within the general skill of the lawyer will not be allowed.

 


[1] Rule 63.72

Harcosts