It is too soon for a radical extension of fixed recoverable costs (FRCs), the ACL has told Lord Justice Jackson (pictured), and in any case there are several areas of law – from clinical negligence and defamation, to actions against the police and judicial review – where their introduction may be unfair and unworkable.
In its response to Lord Justice Jackson’s call for evidence, the ACL said the proposed Ministry of Justice reforms to personal injury claims need to be in place first “before it is possible to consider how further changes to the regime would operate effectively”. The modernisation agenda for the courts could also have a major impact on costs.
“Further, there is a strong argument to suggest that an extension of the FRC regime at this time would be undertaken before the impact of the existing regime – which is barely three years’ old – has been assessed,” it said.
The ACL said: “Active case and costs management is proving successful in prospectively restricting many of the excesses of litigation that lead to high legal costs and the post-LASPO test of proportionality, with its increased stringency, is retrospectively penalising parties who present unreasonable costs claims.”
The association expressed concern that FRCs could make it uneconomic for foreign companies to litigate in England and Wales, which would be a “grave risk” given the economic uncertainty engendered by Brexit.
“Our members accept that extensions to the FRC regime may follow over time. However, it is vital there is consultation with all stakeholders who use the court system to ensure that any extension will be consistent with the key tenet of all recent reforms – namely access to justice – and will provide fair and proportionate remuneration for the work done to promote such access.
“If an FRC regime is introduced at the wrong level and without fair remuneration, there must be a real concern that litigants will not be able to access the correct level of legal expertise without bearing much of the cost themselves, thus potentially creating an inequality of arms.”
The ACL stressed the importance of a major data collection exercise to ensure that an FRC scheme is applied to the correct categories of cases and at the right level. It said there have already been talks with the Law Society and others about pooling such data.
This exercise would assist in identifying patterns and identify categories of litigation that are not appropriate for FRCs because they do not follow a standard pattern of expenditure/process, and where introducing FRCs could end up short-changing parties and prove unworkable with a multitude of opt-outs and exemptions. These include clinical negligence, actions against the police, defamation, judicial review, and class/group actions.
Simon Murray, chair of the ACL’s fixed costs working group and CEO of specialist costs law firm NeoLaw, said: “The ACL’s membership is drawn from all sides of the legal profession, as was the working group.
“The overarching concerns of the membership are that if there is to be any extension to FRCs, timing is key and the level of fees must be informed by meaningful data provided by all of the key stakeholders in the legal industry. Moreover, it is extremely unlikely that a ‘one size fits all’ system will be achievable and so a tailored approach to the various classes of action will be required.
“In our opinion, these issues are of the utmost importance to ensure access to justice is maintained.”
As one of Lord Justice Jackson’s assessors, ACL chairman Iain Stark was not involved in formulating the response.
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