ACL urges caution over fixed costs extension

The ACL has urged caution after Lord Justice Jackson (pictured) was commissioned by the senior judiciary to work on extending fixed recoverable costs.

The move by Lord Thomas, the Lord Chief Justice, and Sir Terence Etherton, the Master of the Rolls, comes in the wake of the commitment in September’s joint government and judiciary vision statement, Transforming our Courts and Tribunals, to look at options to extend fixed recoverable costs much more widely.

Jackson LJ, who has until 31 July 2017 to complete the review, has been chosen because the work is “a logical extension” of his 2010 report, in which he first recommended greater use of fixed recoverable costs.

A statement from the judiciary said the review has been agreed with the government “and will inform its public consultation on proposed reforms, which will follow the review after consideration of its recommendations”.

Lord Justice Jackson will formally begin his review in January 2017, but will be inviting written submissions on this topic immediately.

The terms of reference make it clear that his job is to recommend how, not if, fixed costs are extended. They are “to develop proposals for extending the present civil fixed recoverable costs regime in England and Wales so as to make the costs of going to court more certain, transparent and proportionate for litigants”; and “to consider the types and areas of litigation in which such costs should be extended, and the value of claims to which such a regime should apply”.

Earlier this year, the judge called for the extension of fixed costs for all civil cases worth up to £250,000.

Jackson LJ said last week: “I have set out my present views on the principles of fixed recoverable costs in the final report of my review and in recent lectures and publications.

“I have been commissioned to undertake this review because it is integral to the overall package of reforms which I originally proposed. Chapter 16 of my final report recommended that serious consideration should be given to extending fixed recoverable costs to the lower reaches of the multi-track after the other reforms had bedded in.

“Although the momentum is heavily for reform, the review will provide ample opportunity for comments and submissions on the form and scope that reform should take. I am inviting the views of practitioners, users of the civil courts and any other interested parties on these points. Seminars will be held in London and elsewhere to discuss the issues.

“There is a great deal to be done on the detail of the review, which will inform the government as it prepares proposals for formal consultation in due course.”

According to an article in the Law Society’s Gazette, Jackson LJ told a London Common Law and Commercial Bar Association event on Tuesday that despite his stated views, he would approach the task “with an open mind”.

He said he has appointed a panel of 13 assessors, including two economists, and was reported to have said: “I have got to consider how high the regime of fixed costs should go, what figure, what categories of case it should apply to, what about judicial reviews… I will need to consider how we deal with disbursements. The bar [is] a major disbursement, expert fees as well.

‘How should they be accommodated in a fixed costs regime? There is a great deal of detail to be worked out. I shall consider very carefully the evidence which comes in…

“I hope and believe introducing a regime of fixed costs for a raft of cases above the fast-track will promote access to justice and will be of benefit to the wider community – a view I have always expressed. But I shall approach all of your submissions and observations with an open mind.”

ACL chairman Iain Stark said: “While recognising the desire for wholesale reform, thereby providing certainty in the legal costs arena, this must be tempered by accepting that access to justice must be the bedrock of any consultation. We welcome the opportunity to respond.”

Law Society president Robert Bourns added: “We do not oppose the principle of fixed costs for straightforward, low-value claims as they can provide some certainty for both sides in litigation and avoid protracted disputes about the level of costs.

“But we have previously expressed concern at suggestions that costs should be fixed for all claims up to £250,000 – a tenfold increase on the current limit for many claims subject to a fixed-cost regime. Cases at this level of compensation include situations where people have been very seriously harmed and where the application of fixed costs would be totally inappropriate. It would also raise significant questions about people’s ability to access justice.

“Such a one-size-fits-all approach for all cases, regardless of complexity, will simply make many cases economically unviable, undermining the principle of justice delivering fairness for all.”

Nigel Teasdale, the new president of the Forum of Insurance Lawyers and a partner at DWF, said: “FOIL welcomes long-anticipated progress in the widening of fixed costs, with the launch of the review a first important step towards a positive outcome for the industry.

“It is very encouraging to see the determination for an extension, not only for clinical negligence and personal injury claims but across the civil justice system, and Lord Justice Jackson is absolutely the best-placed person to lead this review.”


This post was posted in ACL e-Bulletin

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Costs News
Published date
21 Nov 2016

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