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Let battle recommence


Here we go again: will hostilities start again in the courts?

Posted by Neil Rose, Editor, Litigation Futures

It may appear that little is happening on the Jackson reforms, and concern rises another notch as every day ticks over and takes us closer to 1 April 2013, but there is a considerable amount of activity going on beneath the radar.

This is in the form of mini-consultations with key stakeholders. Last week we reported on the Civil Procedure Rule Committee’s consultation on the draft pre-action protocols [2] that will underpin portal extension, while I learned last Friday that it was the final day of a consultation on the draft Conditional Fee Agreements Order 2012 and the draft Damages-Based Agreements Regulations 2012.

Before making these, the Lord Chancellor is required to consult the designated judges, the Bar Council, the Law Society and “such other bodies as the Lord Chancellor considers appropriate”. The consultation also included the draft Conditional Fee Agreement Regulations 2012 and the draft Offer to Settle in Civil Proceedings Order 2012, neither of which require formal consultation.

The reason I’m writing this as a blog rather than a news story is that, now I’ve seen them, they reflect what was announced as the government’s policy decisions [3] at the start of the month, such as the 50% cap on all damages-based agreements (DBAs) except where they are in personal injury or employment, where the caps are 25% and 35% respectively.

But what caught my attention, and that of others who have seen the drafts, is the wording around the information requirements. The draft CFA regulations say that before a CFA is made, the lawyer “must” provide information to the client in writing about the circumstances in which the success fee will be payable, how the success fee will be calculated, and the reason for setting the success fee at the level agreed.

When it comes to DBAs, the lawyer must tell the client in writing the point at which expenses become payable and a “reasonable estimate of the amount that is likely to be spent upon expenses, inclusive of VAT”. In personal injury cases the lawyer must also explain how the payment will be calculated, while there are additional information requirements for employment cases carried over from the current regulations.

The 2012 regulations, once brought into force, will revoke the 2000 CFA Regulations, the litigation from which is to a large extent the reason we are where we are today. But might they live on in spirit? It was the prescriptive nature of those regulations, the demand that solicitors “must” take certain steps, that caused so many problems and led to some of the most ridiculous technical challenges that any litigator has ever dreamed up (the challenge on the basis that the CFA did not say that there was no postponement element in the success fee has stuck with me as an example).

Should this be the case, the ingenuity of defendant lawyers will come up against the avowed intention of the new Master of the Rolls, Lord Dyson, to clamp down on satellite litigation post-April.

In his first speech since slipping into the robes earlier this month, Lord Dyson said that “while it is inevitable that new rules and procedures will give rise to some satellite litigation, it is vitally important that the courts and lawyers do what they can to minimise the risk of [it]”.

This means the rules providing “as much certainty as possible” and then clear, authoritative guidance from the Court of Appeal. How will this be achieved? Through “consistency in approach”, Lord Dyson said. A small number of Court of Appeal judges will be designated to deal with procedural cases; he will also sit on those appeals, as will the deputy head of civil justice. “We will not sit on all the appeals, nor will we form the entire constitution which hears those appeals. But at least one of the designated judges will sit on each procedural appeal.”

Lord Dyson hoped such guidance will not be needed often. “But we must be realistic,” he said. The lesson is there from the costs war. Is battle about to recommence?