Costs News

04 August 2017
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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

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