Tackling the 'Jackson question'

As 2014 arrives and we return to work, litigators are continuing to grapple with the practical impact of the Jackson reforms which will soon have been with us for a year. Ever since Sir Rupert published his 557 page report in December 2009, the legal press has been abound with predictions of what the reforms might look like and what impact they might have
in practice.

Despite predictions that satellite litigation would not be needed in order to properly understand the reforms, there has been much in the last six months including before the higher courts. Only the Supreme Court has yet to be troubled with a ‘Jackson question’.

The broad consensus from the courts so far is that the new rules and procedures will be strictly enforced and relief from sanctions will be rare. Litigators, practice managers, IT heads and risk managers should all be assessing and reacting to the new regime or risk being at the wrong end of client, regulator and insurer dissatisfaction.

Jackson in practice

Do not take on work if your firm does not have the capacity to do it and to do it properly. ‘Pressure of work’ and the fact that two of your junior employees are off on maternity leave will not persuade a Master, or a Court of Appeal bench, that a complete failure to file a costs budget was acceptable, as seen from the Mitchell ruling. Failure to heed this warning will not only damage your relationship with your clients but also with your PI insurer. Litigation, which has always been seen as a higher risk area for insurers, will attract increasing attention from brokers, underwriters and risk managers in the future.

Deadlines have long been a feature of litigators’ lives and each firm will have in place its own systems for diarising, supervising and double checking deadlines. In the post-Jackson era, such systems will be even more important as
a ‘solicitor error’ will not always be an acceptable reason for delay or default and time extensions, if attainable at all, are far more likely before the event than after.

Many firms will have already adapted current IT systems to ensure that time recording is captured in such a way that budget monitoring, on a phase by phase basis, is possible. The clear message from the reforms is that if you are going to go over budget in any given area then the only way you may be able to get an increase is to apply to the court before the budget is exceeded. Given the lead time on making an application and having it heard, you need to know well in advance if your budget is likely to be exceeded.

Time recording is only half the picture – your IT and compliance systems must be capable of capturing disbursements on a phase by phase basis too. Counsel’s clerks should be asked to categorise counsel’s fee notes by phase and these can then be allocated in that way on your accounting system. Similar practice should be adopted
for expert fees and, in a lesser way, court fees and other disbursements. Without all
the information in one place it will be difficult to monitor potential overspends.

Assumptions and contingencies

The inherent uncertainty of all litigation makes budgeting a difficult process, particularly given that budgets are set at such an early stage in any case.

The assumptions you specify for each phase as well as the additional contingencies you set out will be key in justifying individual figures to the judge or Master as well as giving you a potential avenue to seek an increase later down the line. When deciding how much time any given phase will take each fee earner, subconscious assumptions are always made. By way of just one example, for the disclosure phase you will have in mind a rough volume of documentation (both your own client’s and the other side’s) which will need to be reviewed. But you are also likely to have assumed that the documents will all be in English, that they will be typed/legible and that they will be in a place or format that they can be easily reviewed by you. Without specifying these assumptions it will make it difficult to revert to the court when it transpires that a quarter of your documents are in fact in hand written Russian located in a warehouse in St Petersburg.

In 2013 courts at every level sent out a clear message about compliance under the new regime. That trend seems set
to continue in 2014 as those practicing within the civil litigation sphere embrace
the brave new Jackson
shaped world. SJ

Melanie Hart is a senior associate and solicitor advocate at Harbottle & Lewis

www.harbottle.com

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