Fixed costs cause alarm

Lawyers have given a mixed response to Lord Justice Jackson’s call for fixed costs in all claims valued at up to £250,000.

Sir Rupert, whose 2010 review of civil litigation led to sweeping reforms, made the proposal last week in a speech to insolvency practitioners.

However, Professor Dominic Regan, of City Law School, who describes Sir Rupert’s proposals as “staggering” in their audacity, points out that fixed costs would apply to clinical negligence—“perceived as the safest and potentially most lucrative of injury work”—and would include the fees of counsel.

Writing in NLJ this week, he predicts instructions of counsel will diminish: “In injury, where some fast-track cases are already captured by fixed costs, law firms are increasingly reluctant to involve counsel.”

Prof Regan says that Sir Rupert is convinced that “many legitimate claims are not pursued because of the fear that costs would cripple or annihilate the claimant”.

He adds that Sir Rupert “has long viewed [the hourly rate for determining costs between the parties] as a reward for the incompetent and an incentive to make a meal of everything”.

Bar Council chair, Chantal-Aimée Doerries QC, warns: “Large corporations and governments may well be willing to spend large sums of money—beyond what is recoverable—on legal disputes with individuals or smaller corporations whose costs are fixed at a much lower rate. Lawyers may not take on complicated, low value cases, thus preventing legitimate claims from being pursued.”

However, she praised Sir Rupert’s acknowledgment to build in regular reviews. Law Society president Jonathan Smithers also expressed concern about the impact on access to justice for highly complex cases.