Decision on costs management exemption by April – but nothing’s happening on hybrid DBAs

Ramsey: ministry should be persuaded to look at DBAs

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 – but he would not say whether or not it will be maintained.

It has also emerged that there is no imminent prospect of changes to the damages-based agreement (DBA) regulations to explicitly allow hybrid DBAs.

The Jackson report recommended that mandatory costs management should not apply to the Commercial and Admiralty Courts. Shortly before this came into force on 1 April, it was controversially extended to cases in the Technology and Construction Court, Chancery Division and Mercantile Courts worth more than £2m so as to reduce the risk of forum shopping.

A review of this by a sub-committee of the Civil Procedure Rule Committee was launched last June.

Speaking at last week’s IBC Solicitors Costs Conference in London, Mr Justice Ramsey – the judge in charge of Jackson implementation – confirmed that rules are now being drafted, and told Litigation Futures that they would be included in the April update. But it is too early to say what they will actually say as discussions are ongoing, he said.

The concern with DBAs is that the regulations only permit a lawyer to work on a full ‘no win, no fee’ basis, rather than, for example, a reduced hourly rate as the case proceeds which is payable win or lose, plus a contingency fee in the event of success.

The Ministry of Justice confirmed last April – less than a month after implementation of the Jackson reforms – that it was “considering suggestions which have been put to us for ways to further improve” the DBA system, but a spokesman told Litigation Futures on Friday that this position had not changed

In his speech, Ramsey J – who supports such a change – said: “Within the next year it is likely that the ministry will be persuaded that DBAs need looking at.”

The judge also suggested that as qualified one-way costs shifting takes hold in injury and defamation actions, it will be “hard to say that you can’t have it” for other personal claims.

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