Costs budgeting at risk from “inconsistency and lack of expertise” of judges, report finds


Royal Courts

Costs judges must allow budgeting to “bear fruit”

The biggest threat to the success of costs budgeting comes from the “inconsistency and lack of expertise” of the judges involved, a report has concluded.

Professor John Peysner, a former chair of the Civil Justice Council’s (CJC) costs committee, said:  “No amount of Judicial Studies Board training will allow judges in higher courts who have not run a business to acquire the experience of litigators in the vagaries of organising the preparation of a case.

“Perhaps, there is still an element of ‘slash and burn’ amongst the case managing judges, which has allegedly been a function of some assessment hearings in the past, reducing bills by a rough and ready amount.”

Professor Peysner said the “praetorian guard” of costs judge at the Senior Court Costs Office was a “resource for advice” but careful attention must be paid to ensure that “the reform is not knocked off course until it bears fruit”.

The professor, based at Lincoln Law School, was commenting in a newly published report he was initially asked to prepare for the CJC’s forum on the first year of Jackson, held in March. Impacts of the Jackson report –Some Emerging Themes was based on articles in the legal press, internal documents, submissions to the CJC and 15 extended interviews with lawyers.

He recommended that hybrid damages-based agreements (DBAs) – which the regulations currently appear to prevent – should be allowed for commercial cases. Professor Peysner said they would “drag up on the coat tails the use of DBAs” and there was “no cogent reason why they should not be introduced”.

However, he said there was “no similar groundswell of opinion” among personal injury lawyers in favour of hybrid DBAs.

“There would be a difficulty that some ‘one-off’ clients, unfamiliar with litigation and finance, would struggle to understand a hybrid arrangement. The Jackson proposal that third-party advice should be compulsory in setting up a DBA would assist but of course it has not been carried forward [by the government].”

Professor Peysner called for qualified one-way costs shifting (QOCS) to be “swiftly extended” to claims against the police and professional negligence cases against personal injury lawyers.

“The claimant is potentially injured three times: one in the accident, twice in losing compensation and thrice in being deprived of an effective remedy against incompetence. This situation is completely illogical and needs to be addressed.”

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