CJR Interim Report, Appendix A. Report on Survey of Litigation Costs

Appendix A

Report on Survey of Litigation Costs

Introduction

1.	The Working Party has decided that a survey of litigation costs be conducted. This survey, based on an examination of all bills of costs submitted for taxation over a 12 month period, is intended to obtain information which may assist in (a) showing the general level of costs of civil litigation in the High Court; and (b) identifying the possible areas in civil litigation which need to be addressed in order to reduce costs and delay.

2.	The survey was carried out by a team including a High Court taxing master, Assistant Judiciary Administrator (Quality), the judiciary clerk in charge of taxation in the High Court Registry, five judicial clerks of the High Court masters and members of JISS. The taxing master and the clerks had all been involved in the day-to-day taxation and management of High Court civil and appeal cases. Members of JISS provided the necessary technical support and advice in matters concerning computer programme design, data input, statistical analysis and presentation.

3.	The Judiciary has also enlisted Professor Martin Chalkley, University of Dundee to advise on methodology. Professor Chalkley is a renowned statistician, currently advising the UK Government and the English Bar on matters relating to costs.

4.	The survey covered the period between 1 July 1999 and 30 June 2000. The total number of bills submitted for taxation during this period is 1,641. Out of them, all the bills in connection with cases that had been concluded are examined. The total number is 1,113. They are categorised as follows:

Case Type			No.

(1)	General Civil Actions		336
(2)	Personal Injury Actions		207
(3)	Uncontested Insolvency Matters		532
(4)	Appeals to the Court of Appeal		38

		Total:	1,113


5.	The results of this survey are presented with the following caveats. First, out of all the High Court actions commenced per year (about 25,000) only a very small number of bills of costs were submitted for taxation. Secondly, almost all of the bills submitted for taxation relate to cases commenced in the previous year or years. Thirdly, all the cases studied share a particular feature, namely, the parties were unable to agree as to the quantum of costs payable to the winner after conclusion of the case and had to refer the matter for a party and party taxation.

6.	It is not clear whether the last caveat indicates that the sample is biased in any particular way. It is conceivable that these parties may be more litigious or may get along more poorly with each other than parties in cases where taxations were not needed. If so, it is possible that the cases studied may exhibit a greater than usual inability to reach procedural agreements. All this is however conjectural and mentioned only to stress the need for care in evaluating the data.

7.	Accordingly, while the data collected under the survey are relatively hard and objective, they do not necessarily represent the general picture of costs in High Court civil litigation. Nevertheless, we think that some useful observations may be made on the basis of these data provided one recognizes the limitations of the available figures.

8.	This report summarizes some of the more important results from the survey. Four kinds of proceedings are involved: (1) general civil actions; (2) personal injuries actions; (3) uncontested insolvency matters; and (4) appeals to the Court of Appeal. Some common terms used in the Tables should be explained:


	(1)	Amount Claimed. This is the amount claimed by the winning party in the action.

	(2)	Amount Recovered. This represents the amount awarded or the settlement sum for a particular action.

	(3)	No Quantified Amount Recovered. This applies to those cases where the award was for damages to be assessed; or some non-monetary relief, e.g., injunction or declaration; or where the case was dismissed.

	(4)	Total Costs Claimed & Total Costs Allowed. These are the total costs claimed by the winning party in its bill and allowed on taxation respectively.

	(5)	Profit Costs Claimed & Profit Costs Allowed. These are the solicitors' profit costs claimed by the winning party in its bill and allowed on taxation respectively. Disbursements are not included.

	(6)	Counsel's Fees Claimed & Counsel's Fees Allowed. These are the counsel's fees claimed by the winning party in its bill and allowed respectively.

	(7)	Taxation Costs Claimed & Taxation Costs Allowed. Taxation costs are the costs incurred in connection with the taxation of the bill. Taxation costs claimed are the amount of costs claimed by the winning party in its bill. Taxation costs allowed are those allowed on taxation.

	(8)	Provisional Bills. The costs claimed in these bills are less than $100,000. They are taxed by the chief judicial clerk. If a party is dissatisfied with the taxation, he may apply to have the bill taxed by a taxing master.

	(9)	Non-provisional Bills. These bills are taxed by the taxing master. They are either with costs claimed above $100,000 or provisional bills referred to taxation as described above.

Part A - General Civil Actions

Costs and Amount Recovered

9.	164 cases (49%) have a quantified amount recovered. The remaining 172 cases (51%) do not. Below is a breakdown of the cases by amount recovered:

Amount Recovered			No.

(1)	Below $120,000		50
(2)	$120,000 to below $600,000		59
(3)	$600,000 to below $1 million		19
(4)	$1 million to below $3 million		28
(5)	$3 million and above		8

		Sub-total:	164

(6)	Cases with no quantified amount recovered		172

		Total:	336


10.	Details of the case type for cases with amount recovered below $120,000 are:

Case Type			No.

(1)	Debt Collections		24
(2)	Property		5
(3)	Intellectual Property		1
(4)	Probate & Administration of Estate		1
(5)	Other General Civil Actions		19

		Total:	50


11.	For each category of amount recovered, the range and median of the amount recovered is captured. The following costs data are also captured:


		(1)	In Table 1, the range and median of total costs and the major costs components, namely, solicitors' profit costs, counsel's fees and taxation costs as claimed and allowed on taxation. The following should be noted when considering the table:


			(a)	The total number of cases equals the total number of bills submitted for taxation.

			(b)	Under "Total Costs Allowed", the number of bills actually taxed is given. The number of bills submitted for taxation may not tally with the number of bills taxed. Bills which, having been submitted, were not taxed were disposed of in some other way, e.g., by settlement.

			(c)	For "Profit Costs Allowed", all the bills involved profit costs but for some of them, such costs were disposed of without taxation, e.g., by settlement. The number of bills taxed here represents the number of bills in which such costs were actually taxed.

			(d)	In "Counsel's Fees Claimed", not every bill involved counsel's fees. Thus, the number of bills submitted for taxation in which counsel's fees featured does not tally with the number of cases. The number of such bills is given in brackets.

			(e)	In "Counsel's Fees Allowed", not every bill involved counsel's fees. The number of taxed bills here represents the number of bills in which counsel's fees featured and were actually taxed.

			(f)	For "Taxation Costs Allowed", all the bills involved taxation costs but for some of them, such costs were disposed of without taxation, e.g., by settlement. The number of bills taxed here represents the number of bills in which such costs were actually taxed.


			Table 1.	General Civil Actions - Amount Recovered and Costs Claimed and Costs Allowed [All Bills]


		(2)	In Table 2, the ratio of median costs claimed to median costs allowed for total costs and the major costs components. The observations in relation to number of bills taxed in sub-paragraph (1)(b), (c), (e) and (f) above are applicable here.


			Table 2.	General Civil Actions - Costs Claimed and Costs Allowed (Categorised by Amount Recovered) [All Bills]


			For cases with a quantified amount recovered, the overall ratio of the median for total costs, profit costs, counsel's fees and taxation costs allowed to costs claimed is 72%, 71%, 99% and 73% respectively. For cases with no quantified amount recovered, the respective ratio is 79%, 73%, 99% and 86%.

12.

The ratio of median amount recovered to median costs claimed for total costs and the major costs components gives a general idea of proportionality. The overall ratio of median amount recovered to median total costs claimed, median profit costs, median counsel's fees and median taxation costs as claimed is 34%, 29%, 23% and 6% respectively. For cases with an amount recovered below $120,000, the ratio is significantly higher: 74% for median total costs, 68% for profit costs, 97% for counsel's fees and 15% for taxation costs. For cases with an amount recovered between $120,000 and below $600,000, the ratio for median total costs and median profit costs is also higher than the overall ratio: 52% and 44% respectively. The ratio for median counsel's fees (26%) and median taxation costs (8%) is roughly in line with the overall ratio.

Costs and Amount Claimed

13.	In Tables 3 and 4, amounts claimed, to be distinguished from amounts awarded or achieved on settlement ("amount recovered"), are considered. For each category, the median amount claimed is captured. In addition, the following costs data are also captured:


		(1)	In Table 3, the range and median of total costs and the major costs components, namely, solicitors' profit costs, counsel's fees and taxation costs as claimed and allowed on taxation. The observations in paragraph 9(1)(a) to (f) are applicable here.


			Table 3.	General Civil Actions - Amount Claimed and Costs Claimed and Costs Allowed [All Bills]


		(2)	In Table 4, the ratio of median costs claimed to median costs allowed for total costs and the major costs components. The observations in relation to number of bills taxed in paragraph 9(1)(b), (c), (e) and (f) above are applicable here.


			Table 4.	General Civil Actions - Costs Claimed and Costs Allowed (Categorised by Amount Claimed) [All Bills]


			For cases with a quantified amount claimed, the overall ratio of the median for total costs, profit costs, counsel's fees and taxation costs allowed is 73%, 71%, 100% and 74% respectively. For cases with no quantified amount claimed, the respective ratio is 79%, 75%, 98% and 86%.

14.

The ratio of median amount claimed to median costs claimed for total costs and the major costs components gives a general idea of proportionality. The pattern is similar to that in paragraph 10 above. The overall ratio of median amount claimed to median total costs, median profit costs, median counsel's fees and median taxation costs as claimed is 36%, 26%, 20% and 5% respectively. For claims below $120,000, the respective ratio is 56% for median total costs, 53% for median profit costs, 55% for median counsel's fees and 13% for median taxation costs. The ratio is significantly higher than the overall ratio. For claims between $120,000 and below $600,000, the ratio of median total costs (49%), median profit costs (35%), median counsel's fee (24%) and median taxation costs (8%) is also higher than the overall ratio, though to a lesser extent.

Costs Claimed and Allowed

15.

The amounts of costs claimed are divided into different categories. For each category, the median of the total costs claimed and of the major costs components are captured. This gives roughly the distribution of costs as between the major components. The overall ratio for the components is 79% for profit costs, 47% for counsel's fees and 14% for taxation costs.


		Table 5.	General Civil Actions - Median Costs Claimed [All Bills]


16.	In Table 6, for each category of costs claimed, the range and ratio of median total costs claimed and allowed are captured.


		Table 6.	General Civil Actions - Median Total Costs Claimed and Median Total Costs Allowed [All Bills]


	The overall ratio of median total costs allowed is 75% of median total costs claimed.

Disposal Mode

17.	Disposal modes are divided into two broad categories: consensual modes and non-consensual modes. Consensual modes include consent order, acceptance of payment into court, settlement without court order. Non-consensual modes include default judgment, striking out, summary judgment, trial for actions begun by writ, substantive hearing for actions begun otherwise than by writ, withdrawal, discontinuance and dismissal. Withdrawal, discontinuance and dismissal are grouped as "Others". A detailed breakdown appears at footnote 3 to Table 7.

18.	For cases with a quantified amount recovered, 24% were disposed by consensual modes and 76%, by non-consensual modes. Within the consensual modes, 15% were by consent order, 8% by acceptance of payment into court, 1% by settlement without court order. Within the non-consensual modes, 28% were by default, none by striking out, 19% by summary judgment, 8% by substantive hearing, 10% by trial, and 11% by others. For cases with no quantified amount recovered, 29% were disposed of by consensual means and 71%, by non-consensual modes.


		Table 7.	General Civil Actions - Mode of Disposal by Amount Recovered [All Bills]


19.	For the 61 cases concluded by default, their case types are as follows:

Case Type			No.

(1)	Debt Collection		30
(2)	Property		7
(3)	Intellectual Property		6
(4)	Admiralty		1
(5)	Other General Civil Actions		17

		Total:	61


20.	For each category of amount recovered, the number and percentage of cases disposed of by consensual and non-consensual modes are captured. For cases with a quantified amount recovered, the overall percentage of cases disposed of by consensual and non-consensual modes is 24% and 76% respectively.


		Table 8.	General Civil Actions - Mode of Disposal: Consensual Means vs. Non-Consensual Means [All Bills]

Interlocutory Activity

21.	Interlocutory activity is measured in terms of numbers and types of applications. In this connection, only the non-provisional bills are examined. Provisional bills are excluded because the amount of costs is relatively small and the procedural steps involved are usually minimal. For present purposes, the number of interlocutory applications captured represents the actual instances of such applications irrespective of the number of summonses taken out. The following are not included: summonses for directions, pre-trail reviews, applications to represent a limited company by director, applications relating to enforcement of judgment. Apart from applications with dates fixed for hearing (whether the hearing actually took place), applications by way of consent summons are also included.

22.	For cases with a quantified amount recovered, 45% had 1 to 3 interlocutory applications, 29% had 4 to 6, and 9% had 7 to 9, and 6% had 10 or more. For cases with no quantified amount recovered, the pattern does not differ much.


		Table 9.	General Civil Actions - Interlocutory Activity by Number [Non-Provisional Bills Only]

23.

For cases with a quantified amount recovered, time extensions and pleadings related applications featured most (52% and 39% respectively). It is the same for cases with no quantified amount recovered (39% and 34% respectively). The "Others" category includes miscellaneous types of applications, e.g., security for costs, adding a defendant, leave to serve a concurrent writ outside jurisdiction, interim payment on account of damages. A detail breakdown is annexed to Table 10.


		Table 10.	General Civil Actions - Interlocutory Activity by Type [Non-Provisional Bills Only]

Median Costs and Stages

24.

For actions begun by writ, the litigation process is divided into different stages with reference to these milestones: summons for directions, setting down, first trial date and conclusion by trial. The number of cases concluded before and continuing beyond these milestones, the median amount recovered, the median costs incurred for each stage, and the cumulative median costs up to each stage are all captured. Provisional bills are excluded for present purposes.


		Table 11.	General Civil Actions with Amount Recovered - Median Costs and Stages for Actions Begun by Writ [Non-Provisional Bills Only]


25.	The number and percentage of cases concluded at the above milestones are captured.


		Table 12.	General Civil Actions - Percentage of All Cases Concluded at Various Stages for Actions Begun by Writ [Non-Provisional Bills Only]

26.


		Table 13.	General Civil Actions with Amount Recovered - Median Costs and Stages for Actions Begun Otherwise Than by Writ [Non-Provisional Bills Only]


27.	The number and percentage of cases concluded at the above milestones are captured.


		Table 14.	General Civil Actions - Percentage of All Cases Concluded at Various Stages for Actions Begun Otherwise Than by Writ [Non-Provisional Bills Only]

Graphs

28.

The graphs at pp.21 - 25 of the Tables & Graphs depict the amount recovered profile, total costs claimed profile, amount recovered versus total costs claimed, amount recovered (below $1 million) versus total costs claimed (below $1 million) and amount recovered (below $1 million) and total costs claimed (below $500,000).

Part B - Personal Injury Actions

29.

The data collection for personal injury actions closely follows the one carried out for general civil actions. The total number of personal injury bills submitted for taxation for the relevant period is 232. A total of 207 are covered here. The rest are excluded because the cases are still continuing.

Costs and Amount Recovered

30.	203 cases (98%) have a quantified amount recovered. The remaining 4 cases (2%) do not. Below is a breakdown of the cases by amount recovered:

Amount Recovered			No.

(1)	Below $120,000		8
(2)	$120,000 to below $600,000		85
(3)	$600,000 to below $1 million		46
(4)	$1 million to below $3 million		45
(5)	) $3 million to below $5 million		12
(6)	$5 million or above		7

		Sub-total:	203

(7)	Case with no quantified amount recovered		4

		Total:	207


31.	For each category of amount recovered, the range and median of the amount recovered is captured. The following costs data are also captured:

(1)

In Table 15, the range and median of total costs and the major costs components, namely, solicitors' profit costs, counsel's fees, experts' fees and taxation costs as claimed and allowed on taxation. The observations in paragraph 9(1) above are applicable here. With necessary modifications, they are equally apt for experts' fees.


			Table 15.	Personal Injury Actions - Amount Recovered and Costs Claimed and Costs Allowed [All Bills]


		(2)	In Table 16, the ratio of median costs claimed to median costs allowed for total costs and the major costs components. The observations in relation to the number of bills taxed in paragraph 9(1)(b), (c), (e) and (f) with necessary modifications to experts' fees are applicable here.

Table 16.

Personal Injury Actions - Costs Claimed and Costs Allowed (Categorised by Amount Recovered) [All Bills]


			For cases with a quantified amount recovered, the overall ratio of the median for total costs, profit costs, counsel's fees, experts and taxation costs allowed is 81%, 79%, 83%, 100% and 90% respectively.

32.

The ratio of median amount recovered to median costs claimed for total costs and the major costs components gives a general idea of proportionality. The overall ratio of median amount recovered to median costs claimed, median profit costs, median counsel's fees, median experts' fees and median taxation costs as claimed is 55%, 35%, 12%, 3% and 6% respectively. For cases with an amount recovered below $120,000, the ratio is significantly higher: 127% for median total costs, 87% for median profit costs, 19% for median counsel's fees, 20% for experts' fees and 23% for median taxation costs. The ratio for cases with an amount recovered between $120,000 and below $600,000 is also higher than the overall: 90% for median total costs, 59% for median profit costs, 17% for median counsel's fees, 4% for experts' fees and 11% for median taxation costs.

Costs and Amount Claimed

33	In Tables 17 and 18, amounts claimed as opposed to amounts recovered are considered. For each category, the median amount claimed is captured. In addition, the following costs data are also captured:

(1)

In Table 17, the range and median of total costs and the major costs components, namely, solicitors' profit costs, counsel's fees, experts' fees and taxation costs as claimed and allowed on taxation. The observations in paragraph 9(1) with the necessary modifications to experts' fees are applicable here.


			Table 17.	Personal Injury Actions - Amount Claimed and Costs Claimed and Costs Allowed [All Bills]


		(2)	In Table 18, the ratio of median costs claimed to median costs allowed for total costs and the major costs components. The observations in relation to number of bills taxed in paragraph 9(1)(b), (c), (e) and (f) above with necessary modifications to experts' fees are applicable here.


			Table 18.	Personal Injury Actions - Costs Claimed and Costs Allowed (Categorised by Amount Claimed) [All Bills]


			For cases with quantified amount claimed, the overall ratio of the median for total costs, profit costs, counsel's fees, experts' fees and taxation costs allowed is 81%, 80%, 83%, 100% and 89% respectively. For cases with no quantified amount claimed, the respective ratio is 77%, 71%, 87%, 100% and 91%.

34.

The ratio of median amount claimed to median costs claimed for total costs and the major costs components gives a general idea of proportionality. The overall ratio of median amount claimed to median costs claimed, median profit costs, median counsel's fees, median experts' fees and median taxation costs as claimed is 23%, 15%, 5%, 1% and 3% respectively. The ratio for cases with lower claims is significantly higher. For claims below $120,000, the ratio is 931% for median total costs, 707% for median profit costs, 183% for median counsel's fees, 41% for median experts' fees and 95% for median taxation costs. For claims between $120,000 and below $600,000, the respective ratio is 52%, 36%, 10%, 3% and 7%.

Costs Claimed and Allowed

35.

For each category of costs claimed, the range and median of the total costs claimed and of the major components are captured. This shows roughly the distribution of costs as between the major components. The overall ratio for the components is 63% for profit costs, 22% for counsel's fees, 5% for experts' fees and 11% for taxation costs.


		Table 19.	Personal Injury Actions - Median Costs Claimed [All Bills]


36.	In Table 20, for each category of costs claimed, the range and ratio of median total costs claimed and allowed are captured.


		Table 20.	Personal Injury Actions - Median Total Costs Claimed and Median Total Costs Allowed [All Bills]


	The overall ratio of median total costs allowed is 81% of median total costs claimed.

Disposal Mode

37.	The categorization of disposal modes follows that for general civil actions. 87% were by consensual modes: 71% by consent order, 11% by acceptance of payment into court and 5% by settlement without court order. 13% were by trial. None of the cases were disposed of by default, striking out or summary judgment.

		Table 21.	Personal Injury Actions - Mode of Disposal by Amount Recovered [All Bills]

		Table 22.	Personal Injury Actions - Mode of Disposal: Consensual Means vs. Non-consensual Means [All Bills]

Interlocutory Activity

38.

Interlocutory activity is measured in terms of numbers and types of applications. In this connection, only the non-provisional bills are examined. For present purposes, the number of interlocutory applications captured represents the actual instances of such applications irrespective of the number of summonses. Checklist review hearings and those mentioned in paragraph 19 above are not included. For cases with a quantified amount recovered, 51% had 1 to 3 interlocutory applications, 16% had 4 to 6, and 4% had 7 to 9 and 2% had 10 or more.


		Table 23.	Personal Injury Actions - Interlocutory Activity by Number [Non-Provisional Bills Only]


39.	For cases with a quantified amount recovered, time extensions, pleadings and discovery related applications featured most (28%, 35% and 24% respectively). The "Others" category includes miscellaneous types of applications. A detailed breakdown is annexed to Table 24.


		Table 24.	Personal Injury Actions - Interlocutory Activity by Type [Non-Provisional Bills Only]

Median Costs and Stages

40.

The litigation process is divided into different stages with reference to these milestones: first check list review, setting down, first trial date and conclusion by trial. The number of cases concluded before and continuing beyond these milestones, the median amount recovered, the median total costs incurred for the stage and the cumulative total costs incurred up to the stage are all captured.


		Table 25.	Personal Injury Actions - with Amount Recovered - Median Costs and Stages [Non-Provisional Bills Only]


41.	The number and percentage of cases concluded at the above milestones are captured.


		Table 26.	Personal Injury Actions - Percentage of Cases Concluded at Various Stages [Non-Provisional Bills Only]

Common Fund Costs

42.

Common fund costs in the present context mean the own costs of a legally aided party that he had to pay to the lawyers assigned to him. These costs are not recoverable from the paying party. For each category of amount recovered, the median common fund costs and its ratio to the median amount recovered are captured. The overall ratio is 4%.


		Table 27.	Personal Injury Actions - Common Fund Costs [All Bills]


43.	The graphs at pp. 46-49 of Tables and Graphs the show the amount recovered profile, total costs claimed profile, amount recovered versus total costs claimed and amount recovered (below $2 million) versus total costs claimed (below $1 million).

Part C - Uncontested Insolvency Matters

44.	There are 132 bankruptcy petitions and 400 winding up petitions. The range and median of total costs, profit costs and taxation costs as claimed and allowed are captured.

		Table 28.	Uncontested Insolvency Matters - Costs Claimed by Case Type

		Table 29.	Uncontested Insolvency Matters - Costs Allowed by Case Type

Part D - Appeals to the Court of Appeal

45.	There are 25 final appeals and 13 interlocutory appeals. The case type of cases from which the appeals were brought is as follows:


	(A) For final appeals:

Original Case Type			No.

(1)	General Civil Actions		11
(2)	Constitutional & Administrative Law		1
(3)	Property		7
(4)	Personal Injury		3
(5)	Construction & Arbitration		1
(6)	Winding-up		2

		Total:	25


	(B) For interlocutory Appeals:

Original Case Type			No.

(1)	General Civil Actions		6
(2)	Constitutional & Administrative Law		2
(3)	Personal Injury		2
(4)	Commercial		1
(5)	Intellectual Property		1
(6)	Shareholders Disputes		1

		Total:	13


46.	The range and median of total costs, profit costs, counsel's fees and taxation costs as claimed and allowed are captured.

		Table 30.	Appeals to the Court of Appeal - Costs Claimed by Case Type

		Table 31.	Appeals to the Court of Appeal - Costs Allowed by Case Type


47.	For each category of costs claimed, the range and median of the total costs claimed and of the major costs components are captured.

Table 32.

Appeals to the Court of Appeal - Median Costs Claimed