Hostility over costs reforms is diminishing, claims Jackson

Lord Justice Jackson (pictured) claimed last week that there has been a change in the legal profession’s approach to costs in the nine years since he began working on reform.

Giving the keynote address to the ACL National Conference in London, Sir Rupert observed how there was a “stark difference” between the two reviews he has carried out. “There was not the same degree of hostility between the warring factions in the second review as there was in the first.”

This was reflected in the views of his 14 assessors – one of whom was ACL chairman Iain Stark – who only seriously disagreed on one point by the end: whether a claim should exit the fixed-costs regime where a claimant’s part 36 offer is accepted late.

“I sense a change in the approach to costs which has emerged over the last nine years. Why? There are two main reasons, I think.

“First, a new generation of lawyers has grown up with a much better understanding of costs law, the principles of assessment, the figures, what legal work costs, and so forth. Many young lawyers have grown up in a regime of costs budgeting and management; that was not the case nine years ago…

“There is now a general acceptance that litigation, like other business projects, must be carried on under some form of budget and not on the basis that people do as they will and add up the bill at the end…

“Second, there is now a realisation that untrammelled litigation costs are simply unacceptable to society. I think people appreciate that much more now than they did nine years ago. So there has been a sea change in the approach of the legal community, and perhaps court users and stakeholders as well, to the control of costs.”

This was best exemplified, Jackson LJ said, by the willingness of all sides to go along with his recommendation that they come together under the aegis of the Civil Justice Council to agree a bespoke process for low-value clinical negligence claims and fixed costs to go alongside it. This would not have been possible back in 2008, he suggested.

However, after Sir Rupert left to go and sit in the Court of Appeal, the following speaker, Nick Bacon QC, another of the assessors, asked for a show of hands by those who supported the fixed costs report. Just a solitary delegate put his hand in the air.

Mr Bacon explained that the assessors were brought on board with the starting point that – whatever their own views – an extension to fixed costs was required. With both the underlying principles and proposed figures under scrutiny, his view was that the figures produced in the report were “the better of the outcomes”: a band 4 case worth £100,000 would lead to costs of £68,000.

Mr Bacon said he had been at a Bar Council meeting with Ministry of Justice officials at which the civil servants appeared keen on the latest Jackson report. He predicted there would be a consultation next year – “it’s going to happen”.

But working all the reforms out, he said, could be another “cottage industry” – for example, the differences between the costs in the different bands would justify litigation to challenge a decision. “So be prepared,” Mr Bacon said.

In a later session, Professor Dominic Regan reckoned the fixed-costs reforms could be implemented in April 2019; cases that start before then would not be affected.

Further, he said, the judiciary was pressing ahead with the Briggs report recommendation to increase the threshold for High Court cases from £100,000 to £250,000 – and personal injury cases, for which the lower limit is £50,000, would not be treated differently under the new regime.

There has also been a decision to “push” more cases out of London and into provincial centres, while Professor Regan said next year would see a rewrite of the rules on admissions of liability.

With Lord Justice Jackson retiring next March and Lord Briggs now in the Supreme Court, he predicted that Sir Peter Coulson, recently elevated to the Court of Appeal and well known for his rulings on budgets, would become the new reforming figure in the judiciary.

 

A full report of the conference will appear in the next issue of Costs Lawyer.

 

 

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Costs News
Published date
26 Oct 2017

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