Fixed costs by the end of the year?

Lord Justice Jackson yesterday evening delivered an important speech calling – again – for the introduction of a regime of fixed recoverable legal costs throughout fast track claims (ie up to a value of £25,000) and also in what is referred to as “the lower reaches of the multitrack”. He also offered a matrix of figures based on the value of the claim.

He recommended as much in his December 2010 Final Report (FR) and in September 2014 he addressed the Costs Law and Practice Conference saying that “Five years have now elapsed since the publication of the FR The recommendations for fixing costs in the Intellectual Property Enterprise Court and the fast track (except for non-personal injury cases) have all been implemented. The time has now come to take stock and to develop a scheme for fixed costs in the lower reaches of the multi-track.”

The figures proposed by Jackson LJ would cover claims up to £250,000; be in broad value bands, and would also be modular in that they would allow discrete amounts for key procedural steps and actions. Disbursements would be outside the matrix he proposed (and which is set out at the end of this piece).

The decision to embark on implementing a regime of fixed recoverable costs is not, it has to be said, one for Lord Justice Jackson alone. He recognises this, and suggests that “the Government (after consulting appropriately) should take the axial decision whether to have a totally fixed costs regime.”

The speech records that the argument in favour of fixed costs is steadily gaining ground, as “evidenced by recent speeches or reports by the Lord Chief Justice, the Master of the Rolls, Flaux J (then the Judge in Charge of the Commercial Court) and Lord Faulks (Minister for Civil Justice).” In addition, a footnote reports that early drafts of yesterday’s speech were shared in advance with highly influential judicial and legal academic figures such as Lord Dyson MR, Professor Adrian Zuckerman, Professor Dame Hazel Genn and Dr Andrew Higgins.

Standing back from both the detail of the speech and from the figures proposed (see table below) the following would appear to be the clear conclusions to draw from the latest intervention by Sir Rupert Jackson in the ongoing debate on costs reform:

  1. there is close liaison at senior level among the judiciary and the MoJ on the probable extension of fixed recoverable costs.
  2. activity is likely to escalate quickly now that the debate has been revived and given the very obvious conclusion that the Government supports moving forward with this project.
  3. consultation should be expected in the short to medium term on a set of proposals for fixed recoverable costs, with the principles unlikely to be up for discussion.

The drive for changes of this type is hardly new, nor are the predictable and polarised arguments that will inevitably be thrown up in response what now looks almost certain to be a consultation by MoJ in the next few months. It is instructive that twenty years ago, Lord Woolf’s final report recommended that there should be a regime of fixed recoverable costs for fast track cases while recognising divergent views among practitioners:

“Those who tend to represent claimants are concerned that the fixed costs might not properly reward the work required, so that claimants will be at a disadvantage against defendant insurers who can afford to spend more on the defence than they can expect to recover. There is concern that experienced practitioners might stop taking on cases. Defendant solicitors are broadly in favour of fixed costs, but again stress that the costs must be set at the right level.”

It seems completely beyond accident or coincidence that Lord Justice Jackson chose to give his speech yesterday the title “Fixed costs: the time has come.” [The full text available is on line here.]

Matrix for multi-track costs proposed by Jackson LJ on 28 January 2016

Value band

Procedural element

25000 – 50000 50001 – 100000 100001 – 175000 175001 – 250000
Pre-action

 

3250 5250 8750 12000
Issue/statements of case

(+25% if counterclaim)

1400 2250 3750 5750
Case Management Conference

 

950 1500 1500 1750
Disclosure

 

1875 3000 3500 5000
Witness statements

(+10% per witness approved by the court over 3)

1875 3000 5000 7500
Expert reports

(+10% per expert approved by the court over 2)

1400 2250 3750 5500
Pre-Trial Review

 

950 1500 1500 1750
Trial preparation

(+5% for each day over 5)

1900 3000 5000 7500
Trial

(+5% for each day over 5)

3750 6000 11000 18000
Negotiations/ADR

 

1400 2250 3750 5500
Totals

 

18750 30000 47500 70250

 


About the Author

akAlistair Kinley is BLM’s Director of Policy & Government Affairs.

Alistair is responsible for BLM’s engagement with government departments and regulators on policy and public affairs issues and consultations affecting the firm and its customers. He coordinated BLM’s market-facing activities in connection with the Insurance Act 2015 and the consultations which preceded its publication and introduction in Parliament.

He is a member of the Civil Justice Council (CJC), a regular speaker and experienced commentator on legal and procedural reforms and was a contributing editor to the Law Society’s Litigation Funding Handbook (September 2014).


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