In-house counsel and London Market insurers discuss their concerns about civil litigation costs with Lord Justice Jackson

Lord Justice Jackson faced an audience on 13 June of over 50, including many in-house lawyers and London Market insurers, when he led a debate about his preliminary report on civil litigation costs. 

At the event, hosted by Barlow Lyde & Gilbert LLP (“BLG”), Lord Justice Jackson stressed that the report “challenges some of the most cherished tenets of the UK civil litigation system” but that “civil rights which enshrine the principle of legal certainty achieve nothing if bringing or defending a claim is not affordable”.

The Judge acknowledged that the report grapples with some of the most “difficult and intractable” elements of the UK civil litigation process but said his final report, due at the end of 2009, will contain “clear and specific recommendations”

He said that the arguments for a full fixed-costs regime for all fast track cases were already ‘compelling’ and that small business disputes could also see fixed costs.  He also said contingency fees were a ‘serious runner’. Docketing - whereby a judge is assigned a case from its commencement right up to its trial - was in his view ‘highly desirable’.

The issue of cost shifting was the subject of heated debate. Whilst the Judge says in his report that the 200-year old “loser pays” principle cannot realistically be abolished altogether, he suggests that it could be abandoned in some areas and replaced by ‘one-way’ cost shifting - whereby successful claimants would recover their costs but successful defendants would not recover theirs.  This is highly controversial and some audience members argued that one-way cost shifting would encourage speculative claims and the rejection of reasonable offers; others said it would be acceptable if defendants no longer had to pay the claimants’ after the event (ATE) insurance premiums.

With respect to civil litigation procedure, some members of the audience felt that pre-action protocols, which encourage parties to settle issues between them without the need to start proceedings, tend to generate more costs than they save. Others felt that the protocols were vital to give defendants an opportunity to investigate and, if appropriate, settle claims, but they thought a fixed-costs regime for this pre-action process would provide greater certainty. Lord Justice Jackson said that any proposed reform  would need mechanisms which regulate unreasonable conduct and behaviour.  

BLG senior partner, Simon Konsta, who chaired the discussion, said: “As the Judge proceeds with his consultation, it’s vital that everyone involved in civil litigation contributes their views on how to make the process more functional, efficient and, above all, fair. Last night, the audience was able to explore a number of themes raised in Lord Justice Jackson’s preliminary report. Clearly, the issue of cost shifting is a flashpoint in the debate. As the Judge notes in his report, one size does not fit all, and what reduces costs of one type of claim may actually increase costs in another.”

-ENDS-

Notes to editors:

1 Civil Litigation Costs Review

1. 1 In January 2009 the Master of the Rolls, Sir Anthony Clarke, appointed Lord Justice Jackson to lead a fundamental review of the rules and principles governing the costs of civil litigation and to make recommendations in order to promote access to justice at proportionate cost. It is the biggest review of civil costs since Lord Woolf’s inquiry ten years ago and the review's findings are due to be presented to Sir Anthony in December. Sir Rupert Jackson published his preliminary report on 8 May in preparation for a public consultation exercise. The report can be accessed at: http://www.judiciary.gov.uk/about_judiciary/cost-review/preliminary-report.htm.

1.2 Lord Justice Jackson’s preliminary report identifies and addresses the key questions and issues impacting upon the current costs of civil litigation:

·In what circumstances should the losing party be required to pay costs to the winning party?

·How and in what circumstances should the amount of any costs payable by the losing party be reduced or limited?

·How can the procedural rules be improved so as to reduce the time lawyers need to spend in the conduct of litigation and its associated cost?

1.3 For a summary of Lord Justice Jackson’s report, please see:  http://www.blg.co.uk/pdf/Lord%20Justice%20Jackson%20Briefing%20Note.pdf.