Costs News

04 August 2017
go back

Lord Justice Jackson has scaled back his fixed costs proposals, but this is far from the end of the story, writes John van der Luit-Drummond

Lord Justice Jackson returned this week to complete the unfinished business of reforming civil litigation costs and, in so doing, recognised that his feared one-size-fits-all approach was not viable. One could almost hear the collective sigh of relief from those present at Chancery Lane for the unveiling of his latest report.

There was much to digest in Sir Rupert’s long-awaited, 135-page (plus appendices) review of the costs regime, but several proposals leap out. They include a grid of fixed recoverable costs for all fast-track cases up to £25,000 in four different bands of complexity of work, with figures to be reviewed every three years.

He sensibly suggests an “intermediate track” with “streamlined procedures” for cases which are of “modest complexity” and up to a value of £100,000. The streamlining would include provisions for no more than two experts instructed on each side and trials to be completed within three days.

An opt-in pilot with capped costs of £80,000 for business and property cases up to £250,000 is also proposed. Those opting in can expect cases to be heard within eight months of the first case management conference, limited disclosure and evidence, and trial lasting no more than two days.

And an extension of the protective costs rules, currently reserved for environmental cases, is recommended for judicial review claims. While those rules were introduced to comply with the Aarhus Convention, Jackson LJ said they were “suitable” for such cases, adding: “Citizens must be able to challenge the executive without facing crushing costs liabilities if they lose.”

Elsewhere, the report proposes ring-fencing counsel’s or other specialist lawyers’ fees in complex fast-track and intermediate-track cases. It also recommends that a defendant’s failure to beat a part 36 offer should incur a 30 to 40 per cent uplift, rather than indemnity costs.

“It is tricky to strike the balance between ensuring that litigation is not prohibitively expensive while also making it economic for lawyers, and Jackson LJ appears to have had that at the forefront of his mind in putting forward a balanced package of reform,” says David Cooper of the Association of Costs Lawyers.

Balanced and measured it may be, but inevitably some people in the clinical negligence arena, such as Action against Medical Accidents’ Peter Walsh, are “disappointed” by the review and argue that costs reforms could have unintended consequences for patient safety. By contrast, other lobby groups, like the Medical Protection Society and Medical & Dental Defence Union of Scotland, are unhappy that the recommendations aren’t bold enough. After all, they say, legal costs accounted for 37 per cent of the £1.7bn the NHS paid out on claims in 2016/17.

But instead of giving in to pressure from the government, lobby groups, or insurers, Sir Rupert has recognised the complexity of clinical negligence issues and called on the Department of Health and the Civil Justice Council to develop “a bespoke process” for cases up to £25,000, a recommendation in line with existing DoH plans.

Yes, reaction to the report has been mixed, but many – including the Law Society and Bar Council – cautiously welcome its recommendations, if for no other reason than the realisation that they could have been much worse, both for lawyers and for access to justice.

Supping from a poisoned chalice he has been cradling for many a year – in the words of Burcher Jennings costs lawyer Richard Allen – Jackson LJ has proposed significant change to the costs regime, while also scaling back from his previous suggestion of applying fixed costs to all claims up to £250,000. That, in itself, should allow practitioners to sleep a little easier.

So, what happens next? “The proposals will bring more process changes, more amendments to the rules and practice directions,” predicts Allen, “more opportunities for the ingenious to exploit the new provisions, to sidestep the unwanted, and embrace the desirable, depending on which side of the fence you operate from.” With so much at stake in the world of costs, did we really expect anything else?

John van der Luit-Drummond, deputy editor

This Article appeared on 4 August in the Solicitors Journal

john.vanderluit@solicitorsjournal.co.uk | @JvdLD

Comments

Sue Nash   25/09/2017 at 20:56

It appears that RNB is set for a HC appeal - watch this space! Meanwhile, RIP Solicitors Journal which - sadly - has just ceased publication after 180 years

News Flash   28/09/2017 at 12:18

Another pointless case, why resist a payment on account when your paying the opponents costs in the end anyway? these types of disputes should be a thing of the past!

MB   05/10/2017 at 13:18

Why has the focus returned to the SCCO "going completely digital". Was the electronic bill not extended to all Courts!

Dragon   12/10/2017 at 13:40

Well said Jim. Too often we see clinical negligence claims settle for say £2k only to be followed by a bill for say £50k. Thankfully there are some excellent costs lawyers out there who battle those costs down, but the situation remains outrageous.

Simon Mccarthy   13/10/2017 at 13:56

Dragon - your comment overlooks the fact that it is almost invariably your clients - the Defendants - who cause those scandalous costs by intransigently, and inexplicably, refusing to come to the negotiating table until too late, when the costs have already been racked up; it is their failure to take a realistic view to claims at the outset which necessitates the costs. This faux horror is therefore hard to stomach, especially when one considers the equivalent costs being incurred by government bodies (funded by us tax payers of course) often to the tune of 4-5 times the sums you mention, and the many Defendant costs draftsmen shelling peas for their piece of the pie. Sadly, it is the same old story of 'pay peanuts get monkeys' and, unless and until government wake up and start paying competent people to deal with claims pragmatically, the UK public purse will continue to haemorrhage billions of pounds that we can ill afford. Still, as long as it keeps Defendant costs draftsmen/lawyers in business?....

Northern Costs Monkey   13/10/2017 at 14:31

Just shows how ridiculous the whole budgeting process is. The reason firms generally don’t make applications to revise their budgets is because the bar set for varying them is absurdly high. No one even knows what a “significant development” is. A load of nonsense in my opinion. The situation we have now is that firms just don’t bother revising the budgets because in all likelihood it won’t be accepted. Meaning firms can be stuck with an “approved” budget that is a couple of years out of date, was drafted before the directions were even agreed, and is no longer fit for purpose. What should happen is that budgets should be drafted after the first CMC, and there should be a rule put in place that parties are able to freely revise a previously agreed or approved budget every six months, regardless of significant developments, with the updated budget to be considered at a costs management conference listed for a later date. That after all was the whole point of budgeting, was it not? Pragmatic costs management?

Simon   16/10/2017 at 16:47

I find this whole issue completely unnecessarily. Independent Midwives had commercial insurance suitable for their needs, however to try and save money they chose to try and become self-funding and cancelled their insurance without fully understanding the risks and exposures. I cannot see why it is in the public interest to bring a JR (and why the costs should be capped) when commercial solutions were available, however the issue is that as a group they didn't want to pay the costs of commercial insurance.

Dragon 2   18/10/2017 at 08:07

Great points Simon. Fully agree. Courts are fully aware of how these matters are conducted by those representing defendant. Surely though the money for damages and costs comes out of the medical suppliers' insurers' account, not tax pot nor nursing fund. Maybe that's why there is such a drive to extend the fixed costs regime to clin neg claims. Just a thought......

Mel B   19/10/2017 at 12:05

'Like' Simon McCarthy's comment

Cath Hart   21/10/2017 at 09:32

In reply to Simon's comment (which I thought at first meant this situation could be resolved) my understanding is that professional indemnity insurance for independent midwives has been withdrawn, but even if available the premium would be in the region of 20-30k annually (reference https://www.aims.org.uk/Submissions/nmc.htm) so I would disagree that it was cancelled to "save money" - these premiums exceed many of the midwives salaries so it was simply unworkable without government assistance. When professional indemnity insurance became mandatory under the EU directive in 2014 the independent midwives did appeal to the government for funding but this was rejected due to the low number of women involved so was not thought to represent value for money for the taxpayer. (reference: https://www.gov.uk/government/news/independent-midwives-insurance-options-outlined).

Add your comment

 
go back