LITIGATION 2014: Costs budgeting, the Mitchell aftermath, and funding challenges

The civil justice system teeters on the brink of collapse, with 2014 promising more cuts with reductions in staff and court closures, fewer sitting days, delays in processing box work and more listing delays.

Court fees across the board will increase. Despite the outcry, government will move towards implementing hearing fees/increased fees for larger cases. The general public will be increasingly unrepresented, having to travel further, pay more and wait longer for any form of civil justice.

Costs budgeting

The number of cases brought within costs budgeting will increase. The proposed limit is likely to rise from £2m to £10m, with the default position that all multi-track claims under that limit must costs budget.

As larger cases travel through the courts with well-resourced litigants we will see an increasing number of Court of Appeal decisions clarifying costs budgeting rules and other aspects of the Jackson reforms.

The court will have to grapple with the tension between costs budgets and detailed assessment and the new meaning of proportionality.

Mitchell

The effect of the Mitchell ruling is already being felt. Lord Dyson opted for a short sharp shock. The sentiment behind Mitchell, that everyone should comply with court orders, is right. The effect has not been what the Court of Appeal intended. It has resulted in:

• increased applications for extensions of time and/or relief from sanctions;
• increased (in some cases opportunistic) refusal to agree extensions and opposition to applications;
• more applications being issued and listed for hearing, clogging up the lists and delaying other court users. 

In 2014 the Court of Appeal will battle to balance compliance and efficiency with justice and merits. It will provide early guidance on ‘trivial’ to try to stop these applications. Aggressive litigation will continue.

Insurers will step in to run relief from sanction applications for potential claims against solicitors. Such claims will rise with insurers increasingly looking at financial stability, risk management and resources on renewal.

Small general litigation practices will struggle to continue in the post-Jackson world - many will close.

ADR and front-loading

Fewer cases will be issued in 2014, suggesting the reforms are achieving their aim. More cases will settle pre-issue through some form of . Mediations will increase but overall success rates will decrease as some cases are pushed into mediation too early.