In our latest article, MAPS Managing Director, David Stothard, discusses the importance of costs budgeting for expert witnesses, and how accurate estimation and management of future costs are crucial for their role and compensation in litigation.
The Civil Procedure Rules (CPR) govern how cases are managed throughout the entire litigation process. Experts are typically familiar with Part 35, which deals with expert evidence, but they do not generally concern themselves with Part 3, which addresses the costs management of cases. Lawyers must engage in the process of costs management, as it is an integral part of the court case management process. In multi-track cases, the court manages both the steps taken in a case, and also the costs to be incurred.
As an expert witness, you may be asked to provide details of the future cost of possible steps in the court proceedings that involve you. This might include further reports or evidence, joint meetings, conference and trial attendance. Estimating how long such work will take requires some judgement on your part, but this should be guided by information from your instructing solicitors to ensure that it is not pure guesswork. If you need more information from the solicitors before providing an estimate, you should not hesitate to request it. It is far better to get the estimate right rather than to find later that you have been working under a misunderstanding of what would be required of you.
Once a budget has been prepared and submitted to the opposing solicitors and the court, there is often a dispute over the amount the judge should allow for that phase of the case. Sometimes, judges do not give a specific budget for expert evidence, only a global figure for the phase of the litigation. However, on other occasions, they may decide to set a specific budget for the expert evidence. For experts, this can mean that you have carefully considered how much time will be required to properly address all the issues the case may present, only to be informed by the instructing solicitor that the judge has allowed a much smaller amount in respect of your charges.
At this point in a case, you cannot simply decline to be further involved. The prospect of approaching the court directly to explain why the judge’s decision is ‘wrong’ is likely to be deeply unattractive. In any event, if your instructing solicitor has done their job properly, they have already done their best to explain this to the judge and have been rebuffed. Professionally, you know that you must still do a proper job, so you cannot just decide to do less work than you had planned. As an expert witness, you may be concerned that this may place you in a tricky position. Technically, this is not your problem. The solicitor has been given the budget, and it is up to them to manage the case costs within that budget. In the event that the expert fees exceed the budget, the solicitor is in no different position than if their own fees exceed the budget. They must decide whether to absorb those costs themselves or, if their charging arrangements allow, pass the shortfall onto their client.
The subject of costs budgeting has become so problematic that Costs Judge Brown of the King’s Bench Division has felt obliged to prepare a formal note to help parties in high-value personal injury cases reach a neutral settlement on many common issues. Regarding expert evidence, the guidance is included below in full, with added comments in italics for clarity:
Experts
9.1 Assumptions
The court, in general, assumes that in all cases where parties have instructed different experts there will be, and will remain up to an including trial, a dispute between the experts. If and to the extent that there is no substantial or material dispute between the experts following service of reports or joint statements this may, in general, constitute a good reason for departing from the budget at detailed assessment (or by agreement); this is not however a matter for costs management. When estimating your costs, you should work on the basis of this guidance regarding continuing disputes. Further ‘costs management’ is a matter for the solicitors, not the experts.
9.2 Fees of experts
The court may have regard to its own experience with the regard to the rates of experts. It is the function of the court to determine a reasonable and proportionate budget and it does not follow that simply because an expert has asserted that their fees will be a certain amount the court should set a budget which reflects the amount requested. It is however recognised that in general the fees charged by experts who are instructed by the NHSR or insurers may be less than are paid by claimants (by reason of the greater negotiating power of such organisations). There are no guideline hourly rates for expert witness work and wide variations have been reported in the annual Bond Solon Expert Witness Survey. However, there is a growing sense from the judiciary that expert evidence is ‘too expensive’.
9.3 Consultations/conference with experts
In some, if not many, cases these can be conducted by videolink without the need for experts to incur travel expenses or to spend time travelling. Whether allowance should be made for attendance of an expert in person is however case sensitive. It is recognised that where, for instance, liability is in issue in a clinical negligence claim, close scrutiny may be required of scans/x-rays justifying in person attendance and that there may be other instances where in person conferences or consultations with experts may be reasonably be anticipated. It is important to include travel time and expenses in your estimate unless your instructing solicitor tells you that it has been agreed that personal attendance will not be necessary.
As a general observation, it is worth expert witnesses being aware that almost all senior court judicial posts (High Court and above) are held by former barristers. Their experience of the rates charged by expert witnesses will be largely based on what they have seen in the costs budgeting process. They will also have experience from their practice at the bar of how long it may take an expert to do their work on a case. However, this will inevitably differ from your personal experience. Given the pressure to control the cost of litigation, it may not be surprising that judges in this process may be inclined to reduce fees claimed in a budget for an expert witness for a claimant when challenged by the defendant.
It is therefore important that when predicting your future fees for a costs budget, you guard against underestimating the time that will be involved. You must never unreasonably inflate the time involved, but you should be aware that the court will be setting the maximum budget allowed. The court will very rarely allow any increase in the budget later, unless there is a significant and unforeseen change in the work required. If this happens, you should advise the instructing solicitor immediately so that an application can be made to the court – a detailed explanation of the unforeseen change will be required.
Ultimately, the figure set by the court at the budgeting stage is likely to be the amount allowed by the court at the end of the case in respect of that phase of the litigation or for your fee if they have expressly decided on that. It is important to remember that the amount allowed by the court or recovered from the other side for your fee ‘inter partes’ (i.e. the amount the losing side will pay the winning side) is different from the amount you are allowed to charge for the work to the party instructing you, which is a matter for agreement between you and them.
Cost budgeting can be a difficult and contentious area in high-value, multi-track personal injury and clinical negligence litigation. It is important for expert witnesses to understand more about the process and what is involved so they can contribute confidently and positively.