Jackson on Jackson

My objective is to promote access to justice. One of the barriers to access to justice is that for many people litigation is unaffordable. Therefore, controlling costs is a necessary part of promoting access to justice. On the other hand, cost reforms which deter lawyers from doing the job would undermine the whole objective. I have got to put forward a package of reforms which will promote access to justice and, so far as I properly can, control costs.

Terms of reference

The starting point for my review is the set of terms of reference which I have been given. These require me to develop proposals for extending the present fixed recoverable costs regime to make costs of going to court more certain, transparent and proportionate. The terms of reference require me to consider the types and areas of litigation to which fixed costs should be extended, and the value of claims to which such a regime should apply.

The mechanics

I have assembled a team of 14 assessors chosen for their expertise in different areas of litigation, largely selected without my knowing whether they were supporters or opponents of fixed costs but chosen because of their various expertises in different parts of the law. We have an assessors’ meeting every month at which the issues are debated.

On top of that I have invited written submissions. I have received many hundreds of pages of written submissions, which I am steadily working through, as are my assessors. I have a team of judicial assistants who are gathering in budgets, a series of current budgets from different courts around the country, and they are analysing them. One of my judicial assistants is an actuary and she is conducting her own analysis of those budgets.

The seminars

I am holding a programme of five seminars, each devoted to different areas of the law. We’ve had one seminar in Leeds, one in Manchester, one in Birmingham, one in London and one in Cardiff this week.

People with great expertise and of considerable seniority have been coming to these seminars. They have been making very valuable contributions and I am listening carefully to what they say, I am preparing a summary of what is said in each seminar and I submit it for approval or correction to the people who have made the main speeches.

But also I’m paying close regard to the discussion sessions. This is where ideas bounce off people and the issues come to light in a way they never will while I just sit reading through ring files of written submissions…I have found in this review, as I did in my previous review eight years ago, that the seminars play a very valuable role.

Piloting FRCs in the mercantile court

Two of the written submissions sent to me from entirely different sources suggested that there should be a pilot of fixed recoverable costs (FRCs) in the mercantile court. That would give an opportunity to see how these ideas work. I have discussed this with my assessors. I have discussed the idea at the Birmingham seminar and I hope to launch a voluntary pilot. This will be subject to the approval of the Rule Committee and I do not know what they will decide. I can say from my own experience that the Rule Committee is a powerful body with well-informed members who have their own views on issues.

But if the Rule Committee approves it the pilot will be modelled on the very successful system which operates in the Intellectual Property Enterprise Court. In other words, there will be a scale of costs for each stage of the case. The scale figure will be a cap rather than a fixed sum so that if that particular stage requires no or minimal work, or less work than envisaged, there’s a lower sum. And then on top of the scale of costs for each element of the case there is an overall cap on recoverable costs.

In the Intellectual Property Enterprise Court the cap is, I think, £50,000 for a liability trial. This voluntary pilot which I am promoting will, I hope, run in the mercantile court in London, in the mercantile court in Manchester and in the other two specialist courts in Manchester. My proposal is that it is should be entirely voluntary. If claimants wish to issue in this fixed costs or capped costs list they can do so. If defendants object the case will come out. If defendants are content then, with the agreement of all parties, the litigation will proceed under this regime which will restrict recoverable costs and which will contain an expedited procedure in order to reduce the burden of work on the lawyers for each party.

The proposed pilot will be limited to cases up to £250,000 in value. If a case is above that, even if both parties want to go into the pilot they can’t do so and I hope we will get a sense of how much the market wants this and useful feedback about how the pilot rules are working.

Costs management

Costs management had a very bumpy start. There was great opposition to it. It is no secret that a number of practitioners were extremely critical of me for having the audacity to suggest that they should put forward budgets to the court and then endeavour to conduct cases in accordance with budgets. It’s also probably no secret that many judges were not best pleased at having to, so to speak, audit budgets for litigation.

Those initial problems have now greatly diminished. Many of those who were strongly critical of cost budgeting and strongly critical of me for having the audacity to recommend it are now saying that cost budgeting or cost management is working extremely well. Some practitioners who were critical of it now say that it has bedded in and is working well. Some judges who had been critical of it now tell me that it is working well.

“ Certainly there must be some fixed costs outside & above the fast track but I have got to look very carefully at which are fixed costs & which are not”

Therefore some practitioners and judges are saying that because costs management is working well this reduces the need for fixed costs.

Incurred costs

One point which has been made in many of the submissions and which was particularly emphasised at the Manchester seminar, where there is a problem with costs budgeting, is incurred costs. The budgeting hearing does a valuable job in controlling future costs but it at the moment only exerts limited control over past costs.

Now, what percentage of costs are historic, of the budget? My judicial assistants are still working on this, they’re still analysing the budgets, but a preliminary analysis indicated that on the defendant’s side 14% of costs were incurred before the date of the budget and on the claimant’s side 31% of the costs were incurred before the date of the budget.

Now, that is not an argument against costs management. It is well worth properly controlling the remaining 70%, 80% or 90% of the costs but something does need to be done about incurred costs in those cases which are subject to costs management.

These are issues which I am considering; whether costs management should be modified in some way and the extent to which costs management reduces the need for fixed costs. But don’t get me wrong; I still believe that in appropriate cases we do need fixed costs. Certainly there must be some fixed costs outside and above the fast track but I have got to look very carefully at which cases are suited to fixed costs and which are not.

The junior Bar

Strong submissions have been made by the Bar Council and others that the position of the junior Bar needs to be protected and certain fees should be ring-fenced for counsel. Other people are saying that the reforms which I make must be directed solely to the public interest, not to the protection of any part of the legal profession. Then back come the arguments from the profession that it is in the public interest to protect the junior Bar. These are all arguments which I am considering with great care and the issues are really works in progress.

The countdown

I’ve still got four months in which to clarify my thinking and prepare my report. I have four more detailed assessors’ meetings to go. The analysis on the submissions is still in progress...and nothing that I mention in this interview is a final view or necessarily going to appear in my report.

Fixed recoverable costs review: time line

• November 2016 Announcement that Lord Justice Jackson is to lead a review of fixed recoverable costs. Jackson LJ invites written submissions on the topic immediately. By arrangement with the Master of the Rolls and the Listing Office Jackson LJ is released from sitting for one week in each month of the six-month review.

• January – April 2017 Jackson LJ formally begins work aided by a team of expert assessor. Seminars held in Leeds, Manchester, Birmingham, London and Cardiff (see David Pilling’s report of the contributions and discussion points from the Manchester roadshow in February 2017 here).

• 3 April 2017 The NLJ webinar Jackson on Jackson, Fixed costs—a mid-term review is free to view here.

• April – July 2017 Four months to clarify thinking, prepare report and consider 100s of written submissions. Four assessors’ meetings left. Ongoing analysis by judicial assistants.

• 31 July 2017 Review due for completion.