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Government finally says ‘no’ to creation of a costs council


Grant: new committee’s role limited to guideline hourly rates

The government will not accede to Lord Justice Jackson’s recommendation for a costs council, which was strongly backed by the senior judiciary, despite announcing the abolition of the Advisory Committee on Civil Costs (ACCC).

However, a new sub-committee of the Civil Justice Council (CJC) will be established to set the guideline hourly rates, and offer advice on other costs issues.

In a long-awaited statement to Parliament yesterday, justice minister Helen Grant said she has decided that the ACCC’s remaining function of advising on the guideline rates should be transferred to the CJC from January 2013.

She said: “I envisage that a sub-committee of the CJC would be established to deal with this issue. The ACCC will be disbanded forthwith, which will reduce the number of advisory bodies.

“This proposal does not go so far as Sir Rupert Jackson’s recommendation for a Costs Council as the new sub-committee’s standing role will be limited to a review of the GHR; other fixed costs will remain for the Lord Chancellor to consider in the first instance. However, there may be other costs issues on which the Lord Chancellor and judiciary would welcome advice from the new sub-committee from time to time.

“I will liaise with the Master of the Rolls, who chairs the CJC, concerning the membership, terms of reference and work to be undertaken by the CJC within the scope of its statutory role of keeping the civil justice system under review.”

Speaking to the Association of Costs Lawyers (ACL) national conference in May, the then Master of the Rolls, Lord Neuberger, called on the government to accept Lord Justice Jackson’s recommendation for the creation of a costs council, which would “provide the necessary, active, expert scrutiny of litigation costs at the macro level… One big push every ten years or so to meet a crisis is neither a proper nor a sensible way to deal with the problem of litigation costs”.

The ACCC was established in 2007 to give independent advice on the guideline rates and other issues. IIA-CIA-Part2 [2] Chaired by Professor Stephen Nickell – a former member of the Bank of England’s monetary policy committee – it struggled at times to reconcile claimant and defendant views, leading to the defendant representative walking out over a disagreement on the role of referral fees in costs.

ACL chairman Iain Stark said: “The decision is disappointing. The costs council was a worthy reform that would have provided certainty for the profession in the future and placed decisions in the hands of those at the coal face. It would also have ensured that fixed costs, which tend to stay untouched over many years, change to reflect rises in inflation.

“While the new sub-committee is a much diluted version of what Lord Justice IIA-CIA-Part3 [3] Jackson proposed, any decision-making body made up of judges, costs lawyers and practitioners must be a good thing.”

He added that Lord Neuberger had said he would expect the ACL to be represented on a costs council. “I hope and trust that his successor will take the same view for the sub-committee.”