Yesterday’s Supreme Court ruling in Coventry v Lawrence has been widely welcomed as a victory for common sense by several of the interveners in the case – and for heading off the chaos that the opposite decision could have wreaked.
Law Society president Jonathan Smithers said a ruling of incompatibility would have had “a serious impact on many thousands of pre-April 2013 cases which are still being litigated, as well as claims to which the pre-Jackson costs rules continue to apply, such as mesothelioma, insolvency and publication and privacy cases”.
He continued: “Such a ruling could also have caused huge confusion in the system, and whatever the merits of the previous ‘no-win, no-fee’ arrangements, that would not have been in the wider interests of justice.”
The Bar Council said that any other outcome “would have resulted in uncertainty and disruption to clients, lawyers and to the justice system as a whole”.
Nicholas Bacon QC, who led the Bar Council’s legal team before the court, said: “This judgment should put an end to the uncertainty which had been troubling clients and practitioners who had entered into pre Jackson CFAs or ATE policies where work in progress was often substantial and where access to justice in continuing cases was severely threatened.”
Chairman of the Bar Alistair MacDonald QC added: “As far as access to justice is concerned, this is the result that is in the best interests of both clients and practitioners.”
Greg Cox, a partner at Colemans-ctts, was also on the Bar Council’s team – the only solicitor-advocate on the benches of the Supreme Court during the ruling – and he said: “The majority of the court has given a clear judgment which reinforces the rights of litigants and their lawyers and should avoid the potential for large scale satellite litigation.
“I am particularly grateful that the court accepted our submission that litigants and lawyers had and have a legitimate expectation (and protected possession rights under article 1 First Protocol [of the European Convention on Human Rights]) in recovering fees and premiums properly incurred under the pre LASPO regime.
“The observations that the current LASPO system may inherently restrict access to justice will undoubtedly stimulate further debate on that point.
“One commentator put the true amount in issue at £15bn. The issues at stake were enough to draw eight interveners into the fray over two and a half days and use up a small forest of paper and materials. Clients and lawyers breathed a huge sigh of relief but, perhaps, not quite as large as the sigh from the government, which had faced the potential £15bn bill if the commentator’s figures were correct.”
Sue Nash, chairman of the Association of Costs Lawyers, said: “The ‘flaws’ in the pre-Jackson CFA regime identified in the judgment – and by Sir Rupert Jackson – have now been fully aired by the highest court in the land. The ‘costs wars’ generated by that regime, with which we are all familiar, arguably took up a disproportionate amount of the courts’ time, energy and resources.
“The majority judgment has now consigned such arguments to history although it is – again arguably – to be regretted that further argument as to ‘legitimate expectation’ will not now be aired…
“The association welcomes the clarity of the court’s reasoning which is in line with our own submissions and which means that decided and settled cases will not now need revisiting. It will also enable cases to which the ‘old’ regime applies to be determined.”
Frances Coulson, chair of the fraud group of R3, the insolvency trade body, said: “Common sense has won out. This decision is a victory for creditors and will help them get back money that they are owed after insolvencies.
“The case had huge implications for creditors in insolvencies in cases where money was being withheld from them by directors or third parties. A decision the other way would have made legal action by insolvency practitioners to retrieve the money unaffordable in most cases. This would have risked as much as £160m per year not getting back to creditors from rogue directors and others.”
“The threat to creditors’ money is not over, however. The Ministry of Justice is set to review how insolvency litigation is funded by the end of the year. It’s important that that decision goes in creditors’ favour too.”
Ms Coulson is managing partner of London firm Moon Beever and acted pro bono for R3 in its intervention.
David Greene, past president of London Solicitors Litigation Association (LSLA) – which did not intervene in the case – said the ruling was “not an unconditional endorsement” of the pre-Jackson regime, but it did resolve the issue “once and for all”.
He continued: “The court recognised the negative effect the Jackson reforms have had on access to justice. The court conceded that the Jackson reforms have restricted access to justice for claimants. It accepted that the reforms had sought to alleviate the problems for claimants, the introduction of QOCS, for example, but suggested that there was room for improvement to ensure proper access for both claimants and defendants.
“This is an issue that the LSLA has sought to highlight. Whilst not seeking to return to another revolution in costs, the LSLA has campaigned for the Jackson reforms to be revisited to ensure equity in both bringing a claim and defending it. People must be able to pursue and defend rights in front of the court at reasonable risk.
“The pendulum may have swung too far pre-Jackson in providing access for claimants but the swing back with the Jackson reforms and the recent increase in court fees has meant many reasonable claims are locked out. We need to address this and perhaps shove the pendulum back a little.”