Cheap suits

Hardly a news broadcast passes without comment on emergency budgets and cost cutting measures. This is also the dominant theme in litigation following the publication of Lord Justice Jackson's report. But with the absence of specific proposals in either the coalition policy document or the Queen's Speech, the legal world is waiting for clarification of what the position of the new government will be. One thing is certain '“ litigation cost management and cost reduction is coming.

Increasingly, clients do not want to spend money for a matter to be heard in a formal hearing. They want their advisers to share the risk of litigation and an imaginative, proactive approach to settlement opportunities.

Experts often represent a significant cost in any litigation and until now the approach towards the appointment of an expert has broadly been either 'we do not need an expert' or 'we need an expert report suitable for disclosure' '“ effectively an 'all-or-nothing' position.

Change of approach

For obvious reasons it is not possible for an independent expert's fees to be conditional, but litigators are scrutinising the way in which they use experts.

Rather than request a full 'bells-and-whistles' report, more and more we will see litigators moving towards a senior level, highly focused expert case assessment, often based on a limited document review and within clearly defined parameters. The resulting product might be in bullet-point format or even a presentation with extensive background knowledge of the dispute assumed.

This work can be undertaken on a fixed-fee basis and used to help assess not only what scope there may be for settlement discussions but also to narrow down the key issues and consequently the likely cost of addressing these in a formal hearing. Undoubtedly, the lawyer with the knowledge provided by this type of early assessment will be at an advantage in settlement or case management discussions with their opposite number.

Experts too will have to respond to this environment and be prepared to offer opinions '“ no doubt suitably qualified, but not so qualified as to render the document worthless '“ based on a review that is limited from both a documentation and time point of view.

The corollary of this approach is that experts should be involved early on in case assessment or appraisal. Experts have long argued that early instruction is beneficial but litigators have, understandably, been reluctant to incur this potentially significant cost primarily because of the perception that there was no point in involving experts unless a matter could not be settled. However, with a more flexible and imaginative approach from both litigators and experts, early input in identifying key areas and the ground where discussion would be beneficial can and should aid the settlement process. Although this approach is not spelled out within Lord Justice Jackson's report, it is arguably at the heart of his work.

Hot tubbing

Lord Justice Jackson makes only two recommendations in respect of expert reports. The first deals with the piloting of concurrent evidence '“ known in the era of Big Brother as 'hot tubbing'. The second proposes an amendment to CPR part 35 such that when a party seeks permission to adduce expert evidence there will also be a requirement to provide an estimation of the costs of obtaining this evidence.

The report also emphasises the power that the court already has to impose cost sanctions where expert evidence has addressed irrelevant issues or has led to unnecessary additional cost being incurred. Then there is the consideration of a robust case management approach in which the court would stipulate what areas expert evidence should address, although it is acknowledged that this would be both expensive and most likely impractical as opposing parties will view different issues as critical to their case.

Under pressure

The message from all of this is clear '“ the day of the diva expert pronouncing Solomon-like in a tome of Tolkien proportions is long gone. Litigators have to take on board a more practical and commercial approach to case management, and experts have to do likewise.

With the increasing emphasis upon third-party funding of litigation through insurance or one of the numerous private funding offerings available, there will be further pressure to adapt as underwriters and other fund providers will want to exercise a tight rein on expenses and get to settlement as quickly and effectively as possible.

What has yet to be addressed is the apparent discrepancy between a litigation environment that offers every encouragement to effect agreement and settlement but where experts now have to justify why they have changed their minds following a joint meeting. With expert immunity up for grabs, it is clear that more work needs to be done on how experts interact with each other and the court if time and cost control is to be further improved.

Consideration should be given to a protocol where the high-level expert case assessment has to be obtained in connection with settlement or mediation discussions.