Lord Justice Jackson vowed to keep an open mind about what types and levels of cases should fall within proposals to extend fixed recoverable costs at his Manchester roadshow earlier this month.
Sir Rupert emphasised at the outset that his remit was to extend fixed costs to those cases in the fast-track that are not currently subject to fixed costs and to cases on the multi-track which can properly be the subject of fixed costs. In particular, he would not just be looking at costs themselves but also procedures themselves.
John Mead, technical director of the NHS Litigation Authority (NHSLA):
- The NHSLA was in favour of fixing costs across all personal injury litigation and that in respect of clinical negligence cases the damages ceiling for such costs to apply should initially be £100,000 with a view to extending that to £250,000 shortly thereafter. There should be limited exceptions to that and Mr Mead gave examples of group litigation, cases involving what he termed “serial offenders” be they individuals or otherwise, where there had been unreasonable/unprofessional behaviour and cases of “exceptional complexity” within the context of clinical negligence claims generally.
- The reason for that position was that despite the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (which he considered to have been largely a success), disproportionate costs were still a significant problem. As long as costs were being recovered by reference to an hourly rate there was “no incentive to stop the meter running”. He was also of the view that costs budgeting was not working as well as it could with incurred costs being a particular problem in clinical negligence cases which were approximately one third of total recovered costs and that some court-approved budgets were still disproportionate.
- In terms of the mechanics of fixed costs the NHSLA advocated a scheme that differentiated by stage and value of the claim as opposed to its complexity. He suggested that there may be a discount for an early admission of liability but that this should be accompanied by earlier disclosure by both side of breach of duty and causation evidence. He suggested that this should be done but the claimant with the letter of claim and by the defendant with the letter of response.
Darryl Allen QC spoke on behalf of the Personal Injuries Bar Association (PIBA) and the Professional Negligence Bar Association (PNBA):
- The position of both organisations was that while it was recognised that fixed costs would be extended horizontally to all fast-track work any extension to multi-track cases was firmly opposed. In that respect, personal injury and clinical negligence litigation was different to all other types of civil litigation given its nature and that invariably it involved an individual taking on a sizeable institution.
- Mr Allen stated that fixed costs in the fast-track thus far had not improved access to justice—the status quo had been at best maintained. While fast-track litigation could be characterised as litigation by numbers that was not the case for multi-track cases where the swings and roundabouts effect of fixed costs would not work. Access to justice would be harmed by extending fixed costs to the multi-track as there was a danger that low value but complex claims would not be taken on with similar results as predicted by the Association of District Judges in relation to extending the ambit of the small claims track.
- He attacked the arguments in favour of vertical extension of fixed costs, being reducing costs and certainty as “illusory”, in that if fixed costs were calculated by reference to damages the costs liability could only be known at the conclusion. It was incumbent on those advocating change to prove that (a) costs were too high and (b) existing control measures don’t work and can’t work in the future.
- In that respect, he stated that is was the experience of PIBA and PNBA members that budgeting was now working well. If it was asserted to the contrary then some properly evidence-based analysis of budget approved by the court should be undertaken. Comparing fixed costs to budgeting, fixed costs were “a blunt tool” whereas budgeting provided “bespoke fixed costs”.
- If costs were to be fixed than such should be done not just by reference to damages but to the other factors that make up the current proportionality test.
- In respect of the likely impact on his members then the experience of fixed costs in the fast-track is that the junior Bar was no longer involved in such cases pre-trial despite Sir Rupert’s view in his previous reports that the junior Bar had a valuable role to play in such cases. That lack of involvement led to counsel being instructed on a conditional fee agreement basis on poorly prepared cases that had little prospect of success that were being run due qualified one-way costs shifting where there was little to lose by doing so. In that respect of fixed costs were to be extended into the multi-track then the work currently done on such cases by the junior Bar should be ring-fenced. If not, “the personal injury Bar will wither”.
Master Cook & Sir Rupert
During the general discussion that followed the first half of the seminar Master Cook stated that while the introduction of budgeting had been fraught with difficulty it was now working in the High Court especially as more budgets were being agreed between the parties. The problem that remained was incurred costs which cannot be interfered with at the budgeting phase (although comments can be made as to the level of such costs). Sir Rupert asked Master Cook that if control of pre-issue and pre-budgeting costs could be achieved should he be looking at fixing costs on the multi-track for clinical negligence cases. Master Cook’s response was that in those circumstances “costs budgeting will do the trick” as there is no “typical” clinical negligence case and the most sophisticated way to deal with such cases is by active costs and case management.
Master Cook added that one of the problems with budgeting initially was in the form and extent of the training provided to the judiciary but this had now been addressed so as to ensure greater consistency between court centres. Sir Rupert stated that he would emphasise the importance of training in costs management in his report.
Brett Dixon of the Association of Personal Injury Lawyers (APIL):
- Mr Dixon emphasised that the seminar should not be about costs but about the rights of those injured and their access to justice. It was only now that the full effects of fixed costs could be evaluated in light of some of the recent Court of Appeal decisions in relation to aspects of the scheme.
- Relating costs purely to value was wrong in APIL’s view. Examples of cases where that created inequities had been provided in APIL’s written response to the consultation. It was only in fast-track personal injury litigation that costs could be fixed. He cited Professor Fenn’s views that he did not support fixing costs in cases beyond the fast-track at the present time.
- Collaboration was already taking place on a cross party basis in relation to noise-induced hearing loss (NIHL) claims and in particular in relation to the preparation of the Serious Injury Guide. In cases where both parties adhered to that guide settlements of substantial cases can be achieved by co-operation prior to the issue of any proceedings.
- Finally, it was APIL’s experience that costs budgeting was now working well and all of the available data supported that view.
Nigel Teasdale put forward the views of the Forum of Insurance Lawyers (FOIL):
- FOIL had been a long term supporter of fixed costs. He highlighted that there were still issues with the current regime which needed addressing and gave the costs of Pt 8 costs only proceedings and credit hire as examples. In the latter respect consideration should be given to increasing the fast-track limit for cases involving substantial claims for credit hire.
- Mr Teasdale commented on the draft grid that formed part of Sir Rupert’s January 2016 lecture and accompanying paper (which had defined the stages of fixed costs by reference to the stages of a costs budget). He expressed concern in defining which stages had been reached using that approach as a claimant would be spending time dealing with disclosure, witness and expert evidence pre-issue. There was a danger in seeing litigation as a jigsaw rather than as a chronological process and he advocated a sophisticated chronological approach to staging.
- More generally, FOIL was of the view that fixed costs should be extended but in an incremental manner rather than by way of a “big bang”. In that context, it was appropriate to fix costs for lower value multi-track personal injury claims.
- Finally, Mr Teasdale referred to the various other initiatives and consultations in being, such as the Department of Health fixed costs consultation, consideration of NIHL claims, the small claims limit review and the reports by Briggs LJ amongst others and emphasised the need for a joined up approach to reform generally.
As part of the documents circulated ahead of the seminar were papers by Kerry Underwood putting forward fully worked grids of fixed costs across the fast-track and the multi-track for claims of up to £250,000 for both personal injury claims and all other forms of civil litigation. Sir Rupert therefore invited Kerry to speak to those papers.
In a typically forthright address, Mr Underwood stated that the system was not there to serve solicitors, the junior Bar or costs lawyers. Self-serving submissions were politically deeply unattractive. There had been abuse of the system and that had to be recognised. In general, fixed costs work. In particular, he cited that the Intellectual Property and Enterprise fixed costs scheme was generally liked by the lawyers using it (based on views expressed at the Leeds seminar).
Where problems arose with the interpretation of any fixed costs scheme then cases should be fast-tracked to the Court of Appeal for determination in a matter of months rather than years. In respect of the tables and figures he had produced then he commented that where cases settle early costs should be lower, the current portal costs were too low and the current post-allocation pre-listing stage should be removed particularly as many fast-track claims were listed for trial upon allocation in any event. Where liability is in issue the trial advocate’s fee should be doubled from the figures in the tables. He agreed with the suggestion that provision be made for abated brief fees by way of a separate fee to reflect pre-trial preparation by the advocate. Beyond that the Bar was vital but there would be nothing new about fee sharing. Such had been the case previously in respect of criminal magistrates’ court work.
A final general discussion then took place. In response to points made by Paul Edwards of Hill Dickinson that there should be exceptions to fixed costs for child abuse litigation, marine and shipping claims and other claims with an international dimension, Sir Rupert floated the notion of an “intermediate” track between the fast and multi-track to which fixed costs would apply (potentially with ring-fencing for advices etc..) and “full” multi-track claims which would proceed by way of budgeting.
Sir Rupert emphasised that the seminars were part of a fact-finding exercise and any suggestions he made during the course of them were just that.
Finally, Sir Rupert asked Senior Master Fontaine to give her comments on matters raised. She expressed her concern that personal injury and clinical negligence litigation beyond the fast-track has its own special difficulties and nuances as previously highlighted by Darryl Allen QC especially in relation to clinical negligence litigation. Process needed to be looked at in conjunction with costs. She cited the streamlined procedure for mesothelioma claims which meant that she had never had to budget such a claim partly as the costs were lowered by the process that had been put in place.
Master Fontaine endorsed the comments made earlier by Master Cook regarding the effectiveness of budgeting in that it now works well as in part more budgets were being agreed between the parties but that the issue of incurred costs needed to be addressed.
Future seminars are scheduled for Cardiff, Birmingham and London. Sir Rupert’s initial report will be published by 31 July 2017.
David Pilling, barrister, Liverpool Civil Law.
David Pilling records the contributions & discussion points from Jackson LJ’s Manchester roadshow