London law firm Harcus Sinclair – acting under a damages-based agreement and supported by Slater & Gordon – has secured third-party litigation funding to start the first group litigation arising from the Volkswagen emissions scandal.
A small City law firm that took on a major case on a damages-based agreement is set to receive one of the largest pay-outs yet under this still novel form of funding after the High Court awarded its client nearly £9m in damages and interest.
The Civil Justice Council working party on damages-based agreements has fallen short of calling for hybrid agreements to be allowed, but told the government that if it wants to ban their use, “then it owes it to the legal marketplace to make that entirely plain”. But it did recommend that recoverable costs should be excluded from DBA caps.
Lord Dyson, the Master of the Rolls, has expressed his disappointment after the Ministry of Justice announced that it had “ruled out” the introduction of hybrid damages-based agreements.
Lord Justice Jackson this week called for an end to the indemnity principle and for lawyers to lobby the government on the need for hybrid damages-based agreements (DBAs).
Large numbers of barristers are struggling with costs budgeting, with some submitting budgets without even seeing the papers, Bar Council research has shown. It also found that barristers are now much more wary of taking work under CFAs.
The biggest threat to the success of costs budgeting comes from the “inconsistency and lack of expertise” of the judges involved, a report commissioned by the Civil Justice Council has concluded.
The rigidity introduced by the Mitchell judgment has fractured co-operation between solicitors, while costs budgeting has driven up law firms’ costs, according to a survey of civil litigators.
An announcement on whether the regulations governing damages-based agreements are to be changed is expected shortly, a major conference on the first year of the Jackson reforms heard on Friday. The extension of fixed recoverable costs is also on the government’s agenda.
The April update of the Civil Procedure Rules will contain the outcome of the review of the exemption from mandatory costs management for the specialist civil courts, Mr Justice Ramsey confirmed last week.
Proportionality is one of the major issues that we find we are dealing with at the end of a matter, particularly in the small-to-medium-value claims. Why was it introduced? It was considered that the then existing system was not working and that a system needed to be put in place which would “promote access to justice at proportionate cost”. In 2009, Court of Appeal judge Sir Anthony May said: “Assessments which have to concentrate retrospectively on what the winning party has spent will always risk producing a disproportionate result.”