What next?
Date: 04 March 2011
Authors: Dominic Regan
Issue: Vol 161, Issue 7455
Categories: Opinion, Costs
Government thinking has overtaken the Jackson juggernaut, says Dominic Regan
The government consultation period on the Jackson reform proposals has now closed. Next we will have a response in perhaps May or June and then draft legislation with implementation next year. Or will we?
It is beyond doubt that things will change with a view to reducing the costs of litigation. No one seems to have a bad word to say about allowing contingency fees and I think it certain that they will be introduced. Primary legislation is needed.
Referral fees are still being bitterly debated. Sir Rupert recommended that they be banned. The government last summer appeared to prevaricate and one senior civil servant told me that if solicitors wanted to throw money at buying work then so be it.
Jackson returned to the fray in his November speech to the Legal Action Group when he pointed out that claimants had no problem finding representation before referral fees were allowed and that the money wasted upon such fees would be better spent on providing the client with a decent standard of service. Indeed, if the need to pay referral fees went then solicitors could in turn look to take less than the maximum of 25% which Jackson proposes the client would contribute to their own additional liabilities burden.
From the outset I have always thought that this thinking underpinned the proposed reform. At present, a client will agree to pay any success fee asked for the very reason that they know they will never pay it. It is like shopping with the black Amex card of someone else. The moment the client is asked to contribute it is blindingly inevitable that they will want to haggle and that one firm will agree to work for less than the maximum to secure the instructions. How long before we end up where we started, with lawyers living off base costs?
Powerful lobbying forces are hard at work, seeking to influence not the government as such but individual MPs. Andrew Dismore, a former labour MP, is advising one such group. He has said that in his experience any topic which generated 20 or more communications from constituents was one to be taken seriously. An Act is needed to end recoverability; see the final Jackson Report at page 472. It will be remembered that in April last year a more modest measure to cap success fees at 10% in defamation foundered. This would prevent claimants securing access to justice and Mps would not have it. Parliament is the true and final battleground. Statistical material has been commissioned by a number of interested bodies, all designed to demonstrate that claimants can only be worse off.
What intrigues me is that the Ministry of Justice has already started to think about moving beyond Jackson. In the last 10 days I have been told by two sources that the small claims limit of £5,000 in non-injury cases is under review as is a proposal to double the fast track ceiling to £50,000.Lord Young in his report last year also sought to push more dramatic measures forward, to be implemented in April 2012. However, the Portal committee which met last week was of the view that the radical extension proposed by Young could not be delivered in a year’s time.
Furthermore, within the next three months or so the government is to announce the Dispute Resolution Commitment. This will entail all government departments involved in litigation signing up to a vigorous undertaking to take ADR seriously. Some may remember a more modest version a decade ago. Indeed, despite Sir Rupert advising against compulsory mediation the government has now decided that it should reconsider the position. Those who thought that Jackson defined the outer limits of reform are wrong.
In a speech last month at the Royal Courts of Justice the senior costs judge delivered an eloquent speech on reform which contained two important details.
The first is that judicial training on costs management is to begin in May, eleven years after the CPR created the duty for courts to actively manage cases!
He also stated that the current Birmingham costs management pilot, which he declared was seen to be a success, will not be extended to all other similar courts until October. It was due to be rolled out at Easter.
Case law has not stood still either and more fireworks are anticipated. In Gibbon last year the Court of Appeal faithfully recited the views of Jackson about Pt 36 and the open—textured test conjured up in Carver. The court accepted his opinion and backed away. While the decision of the European Court of Human Rights in Campbell v The United Kingdom published in January 2011 is not binding and was on a very specific issue (the relationship between additional liabilities and the right to freedom of speech) I suspect that Jackson was delighted that a cosmopolitan bench agreed with his critique of our current costs regime. Intriguingly, he told me last November that it is the laughing stock of the world.
The eminent costs counsel, Dr Mark Friston, is under orders from more than one insurer to identify a case where a full frontal attack can be launched upon the legitimacy of the proportionality test created by Lord Woolf in Lownds v Home Office [2002] EWCA Civ 365, [2002] 4 All ER 775 and savaged in the final Jackson Report.
The future
I write this piece 13 months after the Master of the Rolls unveiled the final report on costs reform. More has happened and faster than ever anyone anticipated. Some may draw hope for the future from the fact that that all three of the children of Lord Neuberger MR are solicitors. Others may turn to religion or their MP in a bid to stop reforms they might think are just too extreme. We will see.
Professor Dominic Regan is advising the senior judiciary on law reform. Website: www.profdominicregan.blogspot.com
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