Simplified budgeting pilots and 2025 costs trends highlighted by ACL chair

Chair, Jack Ridgway, has outlined several key developments for 2025 that practitioners need to stay on top of. Among the major trends is the introduction of simplified budgeting pilots, which are set to begin in April and will impact several areas of litigation.

The three-year simplified budgeting pilots have been approved for certain cases and will mark an important step in reforming how costs are managed in litigation. These pilots will affect cases within the Business and Property Courts (BPC) and certain cases valued at under £1m, as well as those involving qualified one-way costs shifting. The pilot for BPC cases will specifically focus on the Rolls Building and other district registries, impacting High Court cases.

The aim is to ensure that costs budgeting is proportional to the type of litigation, with Costs Lawyers expected to play a key role in making these pilots successful. Ridgway emphasizes that costs budgeting is becoming an integral part of the litigation process, and these changes will require practitioners to adapt to new rules and forms.

Other Key Developments

1. Intermediate Track Claims and Costs for Claims Below £100,000
   There is an ongoing issue with what costs apply to claims valued up to £100,000 that settle prior to allocation. Jack Ridgway notes that case law previously resolved this for claims under £25,000, and similar decisions for intermediate track claims should be expected.
2. Review of the Solicitors Act 1974
   A formal review of the Solicitors Act 1974 is imminent. Calls for this review have been loud and widespread, with many expecting a comprehensive rewrite of the Act. A Civil Justice Council working party is currently exploring this issue, but Ridgway remains uncertain whether the necessary legislation will be introduced during the current Parliament.
3. Costs Lawyers Becoming Judges
   A statutory instrument will be introduced to allow Costs Lawyers to become judges, helping to improve judicial diversity. However, Ridgway notes that this will likely be initially limited to roles in the county court and lower tribunals, with a hope that an exemption could eventually allow Costs Lawyers to sit in the Senior Courts Costs Office (SCCO).
4. Unregulated Costs Draftsmen
   Ridgway also highlights the lack of regulation for unregulated costs draftsmen following a ruling by Costs Judge James in November. He calls on the Legal Services Board and Ministry of Justice to address this gap in regulation to protect clients and ensure fair costs management.

Jack Ridgway concludes by urging for swift action on these issues to ensure fair and transparent costs processes in 2025. The simplified budgeting pilots, along with the review of the Solicitors Act and other regulatory reforms, are all expected to shape the future of costs management in the legal sector.