Costs ADR from around the world

Kevin Friedlander is a cost mediator working and living in South Africa and gives us a glimpse of how Costs ADR is working there.

The current traditional platforms for dealing with costs are either via the courts (taxations – being detailed assessments) or via an assessment panel at the Legal Practice Council (LPC) (usually for non-litigious disputes).

There is already a large move towards ADR in litigation and we are taking steps to ensure that post an arbitration award, all detailed assessments are conducted by a mutually agreed costs consultant.  We have convinced many law firms and counsel to include this as a clause in their submissions to arbitration.  We’re quite busy on that front (I’m personally, currently, dealing with 4 where I am presenting/opposing, and another 3 where I am the appointed costs arbitrator).  We are also attempting to move these entirely to a virtual platform, but any change to standard practice in the legal profession is approached with the usual degree of trepidation.

With regards to non-litigious costs disputes this is where we find mediation plays more of a roll, but unfortunately that puts us in direct conflict with the LPC as they are charging quite significant amounts (5% of the total costs claim payable up front) to attend to assessment.  Basically, we believe we can provide the same service, only better, quicker and cheaper, but it unfortunately doesn’t carry LPC approval at present.

The stumbling block to ADR as an alternative to the courts is solely a monetary one, as taxations through the courts are free whereas costs are arbitrations which are payable equally by the respective parties.  The more law firms use us though, the more they continue to do so, as they are happy with the consistency of our ruling and the fact that we are significantly quicker than the courts.  The courts are actually happy with our service too as it alleviates a great deal of pressure on them.  A lot, but not all, courts are willing to stamp and sign the arbitration allocaturs, which means our decisions are binding.

This of course leaves mediation where the parties need to be convinced that rulings are not required, but guidance is.

In short, this works, but people are afraid to use it from various angles:

1. The lawyers are concerned mediation will not be possible and arbitration rulings will be required in any event;
2. Costs consultants are concerned if mediation becomes more commonplace, particularly on non-litigious disputes, they won’t be required and will be out of work  (this is of course not the case as the mediator’s knowledge of costs is critical for ADR to be an effective tool).

With ADR we try encourage, on litigious matters, a standard approach being:

1. Prepare the bill of costs;
2. Prepare a notice of opposition and list of objections;
3. Attempt settlement discussions and if this fails;
4. Attend mediation to resolve or at least reduce the various issues in dispute;
5. Attend arbitration for specific rulings if required.