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Lord Justice Jackson scales back fixed costs proposals

One-size-fits-all cost proposal gives way to “a more segregated approach”

31 July 2017

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Lord Justice Jackson has today recommended that fixed recoverable costs should apply to claims valued up to £25,000, a significant scaling back of his previous suggestion to apply fixed costs for all claims up to £250,000.

Unveiling his long-awaited review of the costs regime, the Court of Appeal judge has proposed a grid of recoverable fees, with figures to be reviewed every three years taking into account inflation.

Jackson LJ also suggests a grid for an “intermediate track” with “streamlined procedures” for monetary relief cases, which are of “modest complexity” and up to a value of £100,000.

The streamlining of procedure includes not more than two experts on each side and trial to be completed within three days.

He also recommends measures to limit recoverable costs in judicial review claims, by extending the protective costs rules which are currently reserved for environmental cases.

Jackson LJ said that while those rules were originally introduced to achieve compliance with the Aarhus Convention, “they are in principle suitable for judicial review cases in general” and “citizens must be able to challenge the executive without facing crushing costs liabilities if they lose”.

The report also contains a proposal to ring-fence counsel or other specialist lawyers’ fees in more complex fast-track cases and for intermediate-track cases.

Lawyers have largely welcomed the report’s proposals. Andy Ellis, commercial costs lawyer and managing director of Practico, said he was not surprised the “one-scale-fits-all-cases” proposal had given way to “a more segregated approach”, adding that costs capping on claims up to £250,000 was “way too ambitious”.

Law Society president Joe Egan said the review is good news for solicitors and consumers alike, as Jackson LJ’s previous recommendations “would have risked making many cases economically unviable”.

“The new ‘intermediate track’ would bring in fixed costs for cases of somewhat higher value,” added Egan. “We will need to consider the detail of this very carefully to see whether it can work without harming access to justice.”

Striking a note of caution, however, the Law Society president said there were still reservations that introducing fixed costs without robust empirical evidence will negatively affect access to justice, if the impact of the proposals is not carefully assessed.

Andrew Langdon QC, chair of the Bar, said the review indicated that Jackson LJ had listened to the legal profession and had recognised that cost management is “working better than had been supposed”.

Capped cost pilot

The review also recommends an opt-in pilot with capped recoverable costs for business and property cases up to £250,000 with streamlined procedures and capped recoverable costs up to £80,000.

Parties opting in can expect cases to be heard within eight months of the first case management conference, with limited disclosure and evidence, and with a trial lasting no more than two days.

If the pilot is successful, the regime should be made available at the judge’s discretion for any suitable case in the Business and Property Courts or the business and property lists of the county court, said Jackson LJ.

Ed Crosse, president of the London Solicitors Litigation Association and disputes partner at Simmons & Simmons, welcomed the pilot, saying it will be “key to achieving greater access to justice”.

“Imposing arbitrary cost caps alone would have been a very blunt instrument for controlling legal costs, but that is not what has been proposed.

“The pilot will involve the adoption of established and widely endorsed fast-track procedures which, with robust case management, should provide greater procedural efficiency and certainty to the litigation process,” he explained.

“This should, in turn, reduce the work (and associated legal costs) that currently has to be incurred by parties under the existing Civil Procedure Rules.”

However, Crosse warned that for the scheme to be successful it will need to be supported by courts that have sufficient resources to manage the streamlined processes.

Clinical negligence

The report also recommends that the Department of Health and the Civil Justice Council set up a working party with both claimant and defendant lawyers to develop “a bespoke process for clinical negligence cases up to £25,000”, which is in line with government proposals.

Jonathan Wheeler, managing partner of Bolt Burdon Kemp, said the proposals could have been far worse for claimants and that the introduction of an intermediate track “could work”.

“One must always fix the process before fixing costs and not allow well-resourced defendants to ‘game’ the system, driving up costs by their behaviour which they can afford but a claimant cannot,” he added.

Others are far from happy with the proposals, however. Action against Medical Accidents (AvMA) – the charity for patient safety – said it was “disappointed” the report failed to recognise the impact imposing fixed recoverable costs on clinical negligence cases will have.

Peter Walsh, AvMA’s chief executive, said: “If fixed costs do go ahead it is imperative at the very least that there are exceptions for all fatal cases, cases including children, and adults who lack capacity.

“We welcome the fact that if fixed costs for clinical negligence do go ahead, this should be via a ‘standalone’ scheme developed in collaboration between stakeholders. That is better than the Department of Health simply imposing its own rules.”

On the opposite side of the fence, Emma Hallinan, director of claims and legal at the Medical Protection Society, said her group had hoped to see a “bold recommendation” on the costs threshold, with cases up to the value of £250,000 included.

“While disappointing, a £25,000 threshold would be a positive first step,” she added. “Government must also now be swift and decisive in setting out its own response.”

John van der Luit-Drummond is deputy editor of Solicitors Journal

john.vanderluit@solicitorsjournal.co.uk | @JvdLD

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Litigation Costs

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