This article was written for and first featured in Solicitors Journal
The reformation of civil litigation costs recommended by Lord Justice Jackson in his Final Report has gathered considerable momentum. After the publication of the Final Report in December 2009, the Ministry of Justice published a consultation paper, to which over 600 formal responses were received. The Government then published a response in March 2011, following which the Legal Aid, Sentencing and Punishment of Offenders Bill was laid before Parliament on 21 June 2011. Concurrently, the Civil Justice Council has formed a working party to develop practical proposals to assist with the implementation of secondary legislation to introduce certain of Lord Justice Jackson’s recommendations.
The Legal Aid, Sentencing and Punishment of Offenders Bill
The Bill is due to go to the committee stage of the House of Commons on 6 September 2011. In relation to the costs of civil litigation, it seeks to:
- abolish the recoverability of conditional fee agreement success fees from the losing party;
- abolish the recoverability of after the event insurance premiums;
- enable the use of contingency fees or damages-based agreements in most civil litigation; an
- enable the Court to permit payment of additional amounts to successful claimants in circumstances where the Claimant is given judgment that is at least as advantageous as an offer he made to settle the claim.
Civil Justice Council’s Expert Working Party
The areas being examined by the Civil Justice Council’s expert working party include:
- qualified one way costs shifting for personal injury cases;
- additional sanctions and rewards under Part 36; and
- Lord Justice Jackson’s proportionality test (where only reasonable and proportionate costs may be recovered from the losing party).
The Forgotten Recommendations
The Final Report made 109 recommendations in total. The main recommendations are, by and large, being implemented. In these straitened economic times, these are mainly the ones designed to seek to tackle the “country’s compensation culture” and “reduce the unfair costs suffered by…the NHS” (in the words of the Lord Chancellor in the Government’s response of March 2011).
The recommendations not being implemented (at least for the time being) are mainly those which do not hit the headlines of the popular press. The forgotten recommendations include those relating to: witness statements and expert evidence (chapter 38 of Jackson’s Final Report); case management (chapter 39); the administration of the Courts (chapter 42); and information technology (chapter 43).
Witness statements and expert evidence
When providing budgets for clients in most commercial disputes, solicitors will usually advise clients that the most expensive elements of running a case will be disclosure and preparing witness and expert evidence. These are time-consuming tasks both in terms of preparing one’s own side’s evidence and reviewing the other side’s evidence. Lord Justice Jackson recommends that CPR 35 be amended so that a party who seeks to adduce expert evidence must produce an estimate of costs of that evidence to the court and that CPR 35 be amended to support the use of concurrent evidence (where all sides’ experts are cross-examined together at trial). It is surprising that this recommendation is not presently included in the Bill or by the Civil Justice Council’s Working Party, although it is unlikely in our view to have the desired effect of reducing costs.
Lord Justice Jackson makes eight recommendations in relation to case management. The first of these is that measures should be taken to promote the assignment of cases to judges with relevant expertise (known as “docketing”). The benefit of docketing is that it promotes better and more consistent case management, which ought to lead to a saving of costs (for example less detailed skeleton arguments would be needed at interim application hearings and less reading in time would be required by a Judge who is already familiar with a case). This measure would not appear to be costly to implement and ought to produce a very real improvement in the administration of justice, and a reduction in the parties’ costs.
The administration of the Courts
All practitioners will have been frustrated by the level of service received from the Court administrative offices. General examples given by Lord Justice Jackson will be familiar to almost all civil litigators: files are lost; Court telephone lines are either not answered or are continually engaged; matters are adjourned because there are insufficient Judges and the next hearing date will not be for many months. The result of this is to increase the costs of the parties.
Lord Justice Jackson has concluded that there are many reasons why the administration of the Courts may not be as efficient as it could be. He cites the fact that many Courts are understaffed, attracting and retaining skilled Court staff can be difficult because salaries are low. In addition, there has not been sufficient investment in information technology, which has led to him describing the County Courts as “paper mountains”.
However, it is plain that increasing the efficiency of the Courts will require a financial investment from the Government at a time when resources are stretched.
We now live in a digital world. Communications with clients, other solicitors, barristers, experts and every other party to litigation now takes place, on the whole, by e-mail. However, despite every firm having the capability of scanning and e-mailing documents, communications with the Court still routinely takes place by fax, or post, and, in cases where a party needs to be sure that a document reaches the Court, by an outdoor clerk, paralegal or trainee attending the Courts. This takes time and increases costs for the client. In many other jurisdictions, court documents are filed electronically.
When Lord Woolf was proposing his reforms, at the end of the last century, he emphasised the importance of introducing an effective IT system. Unfortunately, the Courts still do not have an IT system sufficiently sophisticated to satisfy the requirements of the civil Courts. Lord Justice Jackson considers that the IT system needs to be able to offer: electronic filing, the ability to maintain all documents and correspondence lodged by the parties in a single electronic bundle, which is accessible to the parties, Court staff and Judges, a facility for online payments and a national database on which the bundles for each case can be held.
To implement this recommendation would be costly for the Government (and is, therefore, politically unacceptable). However, it would have a hugely beneficial impact for litigants, by reducing the amount of time their legal advisers spend dealing with paper documents for the Court, thereby cutting the cost of litigation for the parties.
An opportunity missed?
Lord Justice Jackson has expressly stated that he considers that his recommendations should be implemented as a whole. This has not happened, as the Government has picked those recommendations which it considers will lead to costs savings in the near future. Those recommendations which require public expenditure will have to wait even where they are likely to produce costs savings for the parties themselves.