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This article was written by Debenhams Ottaway partner and Commercial Litigation Association interim vice chair, Luke Harrison
It has been a chilly start to the year for litigators. I am not talking about the weather, I’m talking about the chilling prospect of further civil justice reforms. In particular Jackson LJ’s review into the extension of fixed recoverable costs into what has been termed the “lower reaches of the multi-track.”
In his lecture to the IPA on 28th January 2016 Jackson firmly fixed his sights on claims with a value of up to £250,000. His aims of course are laudable. His brief from the Lord Chief Justice is to “make the costs of going to court more certain, transparent and proportionate for litigants.” It’s hard to disagree with the efficacy of that objective.
As litigators, however, we all know that the factors that effect the costs of “going to court” are multifarious. One thing that we can be certain of is that they don’t correlate to the value of the claim. They are heavily influenced by the complexity of the dispute and the conduct of the parties amongst other factors. The very institution that often wags its finger at a parties’ exorbitant costs, namely the Court, can often contribute to or cause costs that quiet simply ought not to be incurred. The latter phenomenon is unfortunately all too common in the under resources county court. This is something that Briggs LJ described in his final report into the Civil Court Structure as “of real concern” not least he said because “at senior judicial level, or within HMCTS or MoJ” they didn’t recognise the problem.
Furthermore the CPR already provides an abundance of policing mechanisms to stop fat cat lawyers running up excessive legal bills and seeking to recover them from poor unassuming paying parties. The overriding objective at CPR Part 1.1 underpins the requirement for proportionality and the saving of expense in litigation. Parties have to prepare and the court needs to approve budgets at the front end of cases. CPR Part 44.3(2)(a) limits costs recoverable on the standard basis to those which have been proportionally incurred. The rules that govern what is determined as proportionate were themselves penned by Jackson. They are set out at CPR Part 44.3(3) and include a variety of factors to which the Court should have regard with regards taking into account the nature of each particular case.
It is noteworthy that Jackson’s current review follows hot on the heels of a similar exercise undertaken by the Competition and Markets Authority during 2016. In their final report published on 15th December 2016 they recognised that “one size doesn’t fit all” and accordingly, whilst pressing for greater transparency on costs, stopped short of recommending that regulators should require lawyers to operated fixed prices.
When the Commercial Litigation Association surveyed its members to inform its submissions to Jackson’s review there was a consensus that excessive costs in commercial cases was not the norm. It seems, therefore, that the existing arrangements are working. Practitioners reported, however, that the recent increases in Court fees had discouraged claimants from commencing proceedings. In addition, the inability to recover additional liabilities inter parties has meant CFAs and ATE insurance are not economically viable in many cases under £250,000.
Access to the Courts fundamentally underpins the rule of law. Litigators play a vital role in making the Court’s accessible and ensuring the Courts are enable to transact their business efficiently. Restricting recoverable costs is unnecessary and restricting them by reference to value is unjustifiable. If introduced such measures would make many cases uneconomic to run which would have the practical effect of stifling access to justice.
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