Costs News

04 February 2016
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Jackson calls for fixed costs for all civil claims up to £250k

It is time to introduce fixed costs for all civil claims worth up to £250,000, Lord Justice Jackson (pictured) declared last week, saying that “if the political will is there, this whole project could be accomplished during the course of this year”.

In a speech to the Insolvency Practitioners Association, the author of the civil costs review said that “we now have enough experience – including that gained from costs budgeting and the existing fixed costs regimes – to devise a coherent scheme of fixed costs for the whole of the fast track and for the lower reaches of the multi-track”.

One of the advantages, he added, would be to remove the time and cost associated with costs management in such cases.

He published a grid of suggested fees (see below), based on the 10 stages in Precedent H. The overriding principle behind them was the proportionality test set out in rule 44.3.

“In preparing this grid, I have drawn on the combined experience of the costs judges. I have also taken into account what I have learnt from discussing costs issues with practitioners over the years. It should be noted that the recoverable costs suggested below are distinctly higher than those allowed in the fixed costs regime of the Intellectual Property Enterprise Court. That regime has proved popular with both court users and practitioners.”

He acknowledged that consideration had be given to whether any specific categories of work – such as defamation, clinical negligence or construction disputes – required a percentage uplift on the basic figures. “Such an uplift will only be appropriate if most cases in a particular category are of such complexity as to warrant additional costs.”

But Jackson LJ made it clear that the basic uniformity of costs across all civil actions was critical. “It is essential that we create a coherent structure. What we do not want to have is a series of separate grids for different types of cases. There should be single fixed costs grid for all multi-track cases up to £250,000. Insofar as particular areas of work merit additional costs, the rules can provide percentage uplifts for specified types of case.

“I am aware that the Department of Health is proposing to introduce a scheme of fixed costs for clinical negligence claims. That would start to take us down the Balkanisation route. I suggest that a better approach would be to include clinical negligence claims in an all embracing fixed costs regime.”

Sir Rupert said his “impression” was that the profession was now more willing to accept fixed costs than it was in the past. “This is for two main reasons. First, such a regime would dispense with the need for costs budgeting, which not everyone enjoys. Secondly, experience of the fixed costs regimes introduced in recent years has been satisfactory for both practitioners and litigants.”

He also highlighted judicial and political support for the move to fixed costs, but said switching to a “totally fixed costs regime for all claims, however large, would be too great a change for the profession to accept, certainly in the short term”. He added: “The justice system only functions because of the high level of support which the profession provides.” Further, reform was best done incrementally, “so that we can see how it is working out”.

His speech has received a largely frosty reception from practitioners, who have accused the judge of proposing a system that would make it impossible to run complex cases, denying access to justice.

The ACL’s fixed recoverable costs working party is meeting tomorrow to start formulating the Association’s response to the speech.

A Ministry of Justice spokesman said: “This government remains supportive of the principle of extending fixed recoverable costs and will consider Lord Justice Jackson’s comments carefully.”

Meanwhile, in a second speech made this week to IBC’s Solicitors Costs Conference, Sir Rupert called on the Law Society, Bar Council and Chartered Institute of Legal Executive to collaborate on creating a not-for-profit third-party litigation funder – a contingent legal aid fund – to back both regular litigation and “deserving” cases which would otherwise not be attractive because of the level of damages sought.

Rules

1. If the claimant wins, the band is determined by the sum or the value of the property recovered. If the defendant wins, the band is determined by the sum or the value of the property claimed.

2. The fixed cost is payable only if a work stage is completed. 50% of the fixed cost is payable if proceedings have been issued and the work stage has been substantially started.

3. Add 15% if the work needs to be done in London.

4. Fixed costs will not apply in respect of any stage in respect of which the court has awarded indemnity costs.

5. The court may add a percentage uplift to fixed costs for part or all of the case, if it considers (1) that the claim involved exceptional complexity or (2) substantial additional work was caused by the conduct of the other party.

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