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Costs Manager Ian Curtis reports on civil procedure rules, additional liabilities and Jackson reforms

Since the introduction of the Jackson reforms, the revamp of the CPR with the introduction of the 60th update, together with primary legislation such as the Legal Aid, Sentencing and Punishment of Offenders Act 2012, there has been a real shake up when it comes to costs.

Conditional fee agreements and after the event insurance

One could be excused for getting bogged down in transition provisions, changes to the civil procedure rules and not knowing why CPR 43 has been repealed and CPR 48 has been changed to CPR 46. What is striking, however, is the complete removal of the concept of “additional liabilities” from the civil procedure rules, despite the fact that in many cases where you may have signed your client up to a conditional fee agreement and/or obtained an after-the-event insurance policy, these rules will still apply.

Hidden away in the transitional arrangements of CPR 48 (the current CPR), any additional liabilities entered into before the 1 April 2013 will still be governed by the rules as they applied directly before 1 April 2013. As such, the rules governing notification of additional liabilities, as an example, still apply to those cases.

Pre-action protocols

It is therefore as important as ever to ensure that, if you are seeking additional liabilities on behalf of your client, you continue to provide the requisite notice in line with the pre-action protocols and civil procedure rules. These are that the paying party is notified within seven days of the claim being commenced and at the point of issue in the form N251 and also if there is any material change to your funding arrangements pursuant to CPR 44.15 (the previous CPR).

Failure to provide the correct notice to the paying party may result in a challenge to the recoverability of any or some of the additional liabilities your client is seeking. The receiving party may therefore need to consider an application pursuant to CPR 44.3B (the previous CPR) for relief from sanctions.

CPR rules

This is another area which has substantially changed under the Jackson reforms and the changes to the civil procedure rules. If a receiving party has failed for any period to notify the paying party of the existence of additional liabilities, then an application under CPR 3.9 should be made. With the changes to the rule, it will become increasingly difficult to convince a judge that the receiving party is able to recover their additional liabilities, if they have failed to comply with the notice provisions.

In summary, it is vital to ensure that, if you are seeking additional liabilities where the agreement and/or policy were entered into before the 1 April 2013, the rules must be read in conjunction with CPR 48. Just because CPR 44.15 now applies to qualified one-way costs shifting and not providing information on funding arrangements does not mean that in this ‘brave new world’ one will be excused for failing to comply with the rules.

If you would like advice on any of the issues raised in this article or on any other costs-related question, please contact Ian Curtis on 0208 3366 968 or email icurtis@lyonsdavidson.co.uk.

Posted on Jun 14th, 2013 by Lyons Davidson