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Lawyers wrong to fear capped costs, says High Court judge

Birss: Costs capping increased work for IP lawyers

Lawyers are wrong to fear capped costs, which could make a “big difference” to the ability of medium-sized companies to litigate, a High Court judge said yesterday.

Mr Justice Birss – a member of the Civil Procedure Rule Committee – said that if the capped costs pilot for commercial cases in London, Leeds and Manchester proved a success, he would be “in the forefront” of those calling for it to be extended.

Costs in the pilot [1] are capped at a maximum of £80,000 for claims worth up to £250,000.

Speaking at the Legal Futures Civil Litigation Conference, Birss J said his experience of costs-capping in the Intellectual Property Enterprise Court (IPEC) had shown that it removed the need for costs budgeting and could be applied to almost all cases.

“There are always exceptional cases, but they need to be really exceptional. The number of cases where the cap has not been stuck to is tiny.”

The judge said that when costs capping was introduced in IPEC in 2010, lawyers feared their turnover would be reduced. But in fact IP firms discovered that they could handle more cases.

“More junior staff can do cases, which they really like doing and gives them fantastic experience. Litigants like it because they get really good lawyers and it’s not costing them as much. Everybody wins.”

He went on: “Costs capping, if it’s done in the right way, can make a big difference to access to justice for medium-sized businesses. They can afford to litigate and they can afford to defend themselves. That aspect of it I think is really interesting.”

Birss J said costs capping was “probably the best thing” for many other cases, but he was “not dogmatic” about it.

If evidence from the pilot showed it was working well, he would be “in the forefront” of those calling for it to be extended.

But the pilot is voluntary. “Of course, nobody is saying ‘here is the pilot, and if you don’t play in it, we’ll make it mandatory. That’s not the game.

“The point of the exercise is saying here is something that seems like a good development. We don’t want to impose it on people, so we’re piloting it, but we do want to look at it and if no-one uses it, we’re left with the old way of doing things.”

Robert Wright, head of civil litigation, funding and costs at the Ministry of Justice, told a panel session later in the day that he expected the ministry to make an announcement on Lord Justice Jackson’s plan to introduce fixed recoverable costs for money claims worth up to £100,000 “fairly soon”.

He added that work on a fixed costs regime for medical negligence cases worth £25,000 or less was “nearing completion” and would be the subject of a consultation.

Fixed costs were backed by other panel members. Professor Dominic Regan said there was “nothing wrong” with fixed costs, provided they were set at a sensible level.

Luke Harrison, partner at Debenhams Ottaway and chair of the Commercial Litigation Association, agreed, arguing that fixed costs would increase the amount of litigation and work for lawyers.

Mr Wright added that he did not think the findings of the LASPO review on the Jackson reforms were “very surprising”, and although “certain people” did not like the reforms, they had adapted to them.