No turning back

Dominic Regan predicts bitter battles ahead as Jackson reforms gain pace

Who would have thought that a government in office for just two months would make a move upon costs reform and the implementation of Jackson? The announcement was unequivocal. This autumn the government will consult upon the most radical of proposals, namely, the ending of the recoverability of success fees and additional liabilities. The government is committed to early reform. Primary legislation is required; there is already a commitment to find parliamentary time to achieve this end.

Measures that would be easier to implement like the introduction of fixed fast-track costs are mentioned in passing and seem to be regarded as less urgent. Referral fees, a topic which has generated enormous debate, may well, I understand, be left alone on the basis that if people want to give money away to acquire work then so be it.

A matter of self-interest

What is going on? The answer is self-interest. The government is a massive employer. It also funds the NHS and the clinical negligence claims brought against it. On so many fronts the state is a defendant and has been hit hard by the present funding regime which allows the victor to recover base costs, success fee and an after the event (ATE) premium. Even the legendary moron in a hurry would appreciate that by moving the goalposts the government would, at a stroke, reduce the costs liability it faces.

Many people said, wistfully, that the Jackson proposals would go nowhere. Many people were wrong.

Those who have heard the master of the rolls and Sir Rupert on their recent travels around the country will know that they are in no mood to relent. The one perceived weakness was that the Jackson review was commissioned by the judiciary and not the government. The previous regime privately praised the review and an even more enthusiastic stance is evident at the highest level of the new administration.

Clearly, the forthcoming consultation will represent the last opportunity for those against change to state their case. It is now or never. It is futile for people to utter well meaning generalisations about the right to a fair trial and justice. Hard evidence to demonstrate that the proposed reforms would have a real adverse impact is necessary.

Respected claimant injury firms of the calibre of Thompsons have already collated a substantial body of statistics to demonstrate that an increase in general damages of 10% (as recommended by Jackson) would not alleviate the overall detriment to a claimant having to fund their own additional liabilities. Thompsons also commissioned reports earlier this year from a group of respected academics so as to have independent material upon which to fight their corner. This may well prove critical.

In the dying days of the last government in April this year Mr Straw sought to introduce a comparatively modest measure to cap recoverable success fees at 10% in defamation claims, much more timid than that suggested by Jackson. It never made it. Even though there are only about 150 such cases a year and many are brought by wealthy figures, MPs would not have it. It would preclude claimants securing access to justice, agreed representatives from all of the main parties. A new government can introduce unpopular measures as the next election is years away. Those who think reform will destroy the process need to win over MPs and members of the House of Lords.

The stakes are high. Think of the lawyers, ATE insurers, and others with vested interests in preserving what we have. I predict that there will be a bitter battle. Sir Rupert may rightly feel vindicated by the government accepting his proposals but they have yet to withstand the scrutiny of Parliament.

Contingency fees are also to be considered. The senior costs judge, through the auspices of the Civil Justice Council, wrote a stunning paper on the workings of contingency arrangements and certainly persuaded this reader that they can work. He showed that the perceived excesses are mythical. The major law firms handling expensive claims are very excited about the prospect of reform here, but many question why Jackson intends that they be compelled to send the client elsewhere for independent advice on whether they should enter into an arrangement. One can act on a conditional fee footing without sending the client elsewhere so why should it be any different here, particularly as the client is probably commercially astute anyway.

I am convinced, and have been since I heard Sir Rupert deliver his final report, that we are in for tremendous upheaval on costs. The only question is, how profound will it be? What happens this autumn will shape the depth of reform. This is no time for anyone to keep their own counsel.Litigation, and those who practise it, may be in for the biggest upheaval ever.

Professor Dominic Regan is a legal writer, broadcaster & speaker on civil litigation matters. He is professor at City University London & a member of the Civil Justice Council costs committee.

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