Editor's blog | The next costs war

Eight weeks to go and litigators are clutching at straws. A substantial chunk of the rules required to give effect to the Jackson reforms, most of which must be in place when LASPO comes into force on 1 April, are still to be drawn up. In the case of minor statutory changes, this kind of delay may be nothing to be overly concerned about. In the case of reforms that are expected to change the face of litigation, this is a different matter. With so many questions still unanswered, judges have started filling the gaps, giving us a snapshot of where the next costs war will be waged.

First there was the case of Simmons v Castle, where Lord Judge said the courts would raise compensation awards by ten per cent on the big day, only to have to ‘refine’ his decision three months later following an appeal by the insurers’ lobby.

Then earlier this week in the Henry case the Court of Appeal allowed the claimant to depart from the agreed costs budget because there were good reasons.

Both cases touched on different aspect of costs, but both are intertwined in the Jackson approach to cost control. The first one was about fair compensation in an environment where costs are capped and insurance premiums not recoverable. The second was about costs budgeting, the linchpin of the reforms. Although a libel case, it has suddenly unsettled expectations that costs will be fixed and litigation more predictable. Cost budgeting is causing enough headaches as it is, but for costs specialists and litigators just coming to terms with the notion, this interpretation of the “good reason” exception is only a reminder that the new order could give rise to more trouble than the current one.

Only yesterday, Lord Justice Jackson himself yet again tried to get his message across in the case of a sandwich shop owner who claimed she had been wrongly evicted. The six-year lease taken by Sheila Grange for just under £10,000 was not worth the “massive legal fees and expert costs” incurred in the cast, he said after finding in her favour.

Costs are never far away from litigators’ minds but how they are managed and kept under control is taking centre stage as we approach the April THING. What has perhaps not been anticipated is that, if these cases are anything to go by, defining what are reasonable and proportionate costs will not be left solely to litigants. Some judges are already taking a keen interest in cost assessment today; from April, it is the whole of the judiciary which is likely to play an increasingly active role in steering the reforms forward and be more questioning from the start.