Lawyers give Jackson’s fixed costs call a frosty reception

Smithers: fixed costs for complex cases totally inappropriate

Smithers: fixed costs for complex cases totally inappropriate

Lawyers have responded negatively to Lord Justice Jackson’s call last week to introduce fixed costs for all civil claims worth up to £250,000.

Gerard Stilliard, head of personal injury at leading claimant firm Thompsons, was the most outspoken, describing the judge’s speech to the Insolvency Practitioners Association as another “report from an Ivory Tower that fails to address how the changes will impact on real people”.

He explained: “Nowhere does Lord Justice Jackson properly consider the impact on the deterrent effect of litigation in health and safety, nor how defendants being able to calculate the maximum cost of negligence will impact on the risks they take with workers safety.

“Defendants in Lord Justice Jackson’s world will seemingly begin to ‘behave’ in litigation, revealing a previously unknown commitment to achieving a speedy and equitable outcome despite the huge opportunity which this newly skewed playing field would give them to squeeze claimants and their lawyers by stretching cases out as far as possible.”

Mr Stilliard said Jackson LJ had also not considered the dilemma that claimant lawyers will face – “either to do work at commercially unviable rates or to settle cases as soon as possible in order to keep their costs within what is likely to be – if the portal is anything to go by – a wholly unrealistic cap determined with no regard for evidence or expert opinion by government and their friends in the insurance industry”.

Law Society president Jonathan Smithers said the society supported the principle of fixed costs for “lower value and less complex” cases, but was “extremely concerned” at a £250,000 limit.

He said: “The application of fixed costs for highly complex cases is likely to be totally inappropriate and would raise significant questions about the ability of many people to access justice.

“A single approach for all cases, regardless of complexity, will lead to many cases being economically unviable to pursue which undermines the principle of justice delivering fairness for all. We are also concerned by the suggestion that these proposals could be consulted on and implemented within a year as we believe this is unrealistic.”

Among the conditions the Law Society set out for fixed costs were that there must be scope for exemptions and escapes for complex or unusual cases, “there must be rigorous empirical evidence and research undertaken to justify the initial setting of the rates as well as the level of thresholds”, the rates and thresholds must be regularly reviewed and increased by reference to appropriate indices, court procedures and court rules should be properly aligned with their introduction, and appropriate and efficient IT in the court system should be introduced to support the fair and effective delivery of any new fixed costs regime.

Costs lawyer Simon Gibbs of defendant costs firm Gibbs Wyatt Stone, wrote on his blog today: “It is not entirely clear whether the irony is lost on Jackson LJ of justifying fixed fees as a way to avoid unpopular costs budgeting, when costs budgeting one of the key Jackson reforms…

“A massive extension of fixed fees would make the majority of the Jackson reforms entirely redundant for the majority of cases (no costs budgeting, costs management, provisional assessment, new bill of costs, etc). Fixed fees across the board was always an easier (if not necessarily better) way to ensure proportionality than the bulk of the previous reforms already introduced.”

Mr Gibbs also suggested that the judge was looking at the issue from the wrong direction. “Fixed fees for all civil claims up to £250,000 will impact on the vast majority of claims, the vast majority of litigants and a huge proportion of the legal profession. Conversely, excluding claims above £250,000 will impact on a relatively small number of litigants and a small proportion of the legal profession,” he wrote.

“Not switching to a totally fixed costs regime for all claims will not lessen the impact for the profession as a whole; it will simply mean that the impact falls almost entirely on large parts of the legal profession whilst leaving other smaller parts almost entirely unaffected.

“Surely it would make more sense to pilot an extension of fixed fees for cases worth over £250,000 only. We have repeatedly been told that City firms are much more experienced in providing their client with clear budgets and that legal costs are less of a concern for commercial litigators. If a pilot is a success, we can then extend it downwards.”

Bar Council chair Chantal-Aimée Doerries QC agreed that fixed costs “may help” in straightforward cases, but added: “Large corporations and governments may well be willing to spend large sums of money – beyond what is recoverable – on legal disputes with individuals or smaller corporations whose costs are fixed at a much lower rate. Instead of levelling the playing field, this proposal could tilt it further in favour of big business and the state.

“There is also a risk that access to justice will be restricted. Using the value of a case to determine costs will not always be appropriate. A low value but legally complex case may demand a great deal more work than the allocated cost band will allow. This means lawyers may not take on complicated, low-value cases, thus preventing legitimate claims from being pursued.”

A Ministry of Justice spokesman said: “This government remains supportive of the principle of extending fixed recoverable costs and will consider Lord Justice Jackson’s comments carefully.”

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