Lord Justice Jackson’s Lecture : Fixed thinking?

I read Lord Justice Jackson’s Lecture note from 28th January hoping to find the voice of an independent judiciary dispassionately appraising the case for and against fixed costs and making recommendations.

I was however disappointed. Not just because I disagree with him, but also because he has not employed the measured reasoning and discipline of thought we expect from members of our Judiciary.

Why does he favour fixed costs?

His view is that :-

  • High litigation costs are a problem
  • If costs prevent access to justice this undermines the rule of law
  • Hourly rate renumeration rewards inefficiency
  • Fast track costs in personal injury/IP Enterprise court appears to be working
  • Litigants in non PI need access to justice at proportionate cost
  • The profession is willing to accept fixed costs rather than have more costs budgeting
  • Politicians and Judges want it
  • It provides certainty
  • We have enough experience from costs budgeting and fixed costs now

Why was I disappointed?

He showed no interest in the impact of the 2013 changes he brought in

No mention was made of the need to review the success or otherwise of the numerous mechanisms by which multi track or non PI costs have been sought to be controlled since 1st April 2013:

We had costs budgeting, changes to the overriding objective to prevent disproportionate cost, encouragement to mediate , changes to part 36 , recoverability of success fees, ATE premiums and assessment of costs (to name but a few).

All of these changes aimed to  prevent disproportionate costs and to make justice more efficient.

Unfortunately, lack of resources and planning when they were introduced meant some of the changes had the reverse effect. This was not the fault of the procedural judges but of poor planning and the failure to put proper resources in place .

As a result there was additional delay and expense – for example, it was not uncommon for litigation to be brought to a halt whilst parties waited 6-9 months for a date for a costs budgeting hearing.

Simularly, some poor planning meant that when costs budgeting was implemented the forms did not initially work and the rules were not clear.

For a man whose report was so instrumental in starting ‘the big bang’ of reform which started in April 2013 he seems remarkably disinterested in how his recommendations have bedded in.

He did not look at the root cause of High litigation costs

He seems for example to ignore the role of government in ensuring that court fees have gone up extortionately since 2013. He makes no mention that those changes alone put justice far beyond the reach of the average member of the public where they have to bear that burden.

For example , the issue fee for a grievously injured child who needs proceedings to be issued used to be £1200 . Now , for that same case the cost is £10,000.

He did not look at whether the current regime might be capable of working

The regime he ushered in has been condemned without analysis.

The raft of measures introduced in 2013 gave the courts power to regulate and control court costs. There is in fact plenty of evidence of the courts exercising their muscle to reduce costs to a proportionate level. in some cases disallowing costs completely.

As high value cases can take 2 -3 years to resolve the effect of costs budgeting on these cases cannot be properly assessed because they have not been in place for long enough for their effect to be seen.

Perhaps better resourcing of the courts would allow for better costs management? Has anyone considered that more Judges and better infrastructure in the court system to allow administration of costs management might be a more effective way of achieving the aim of justice at proportionate cost? Shouldn’t they?

Significantly the regime that Lord Jackson compares us to in New Zealand allocates twice as much to the court infrastructure than we do in the UK (SEE OECD (2013), “What makes civil justice effective?”, OECD Economics Department Policy Notes, No. 18 June 2013.)

No consideration is given to the conduct of the parties in driving up the costs of litigation and the effect of better costs management systems might have on such behaviours.

Most significantly he does not consider whether fixed costs provide more effective access to justice than the current system

There is considerable value in a CFA allowing an individual access to justice.

Legal aid for high value personal injury and Clinical negligence has all but disappeared. CFA’s were the replacement.

For all their faults CFA’s allow the lawyer and their client to tailor what is necessary to be done in order to investigate and litigate a case. This is then assessed by the court who only allow recoverability of what they regard as proportionate and necessary to do justice in the case.

To ensure they are reasonable litigation costs are made subject to pre-emptive costs budgeting, proportionality and assessment as to what was reasonably incurred at the conclusion of the case.

The current system also to a large extent has in built protection that prevents one party from acting unreasonably. Unreasonable conduct by one party should surely in some circumstances justify the costs of the other party to defeat such conduct (see CPR 44.2 (4) a).

Penalising unreasonableness is part of being just in the minds of most people. To embrace a system which rewards unreasonableness will undermine the rule of law.

Does a fixed costs regime work? Can one size really fit all?

Lord Jackson proposes fixed costs should be extended to all areas of litigation because they have worked for lower value Personal injury and in the IP Enterprise court.

This assumes that a fixed costs regime is suitable for all areas of law, values and types of claim. It is unquestionable however that different areas of law have different demands evidentially.

Different types of Claimant and Defendants also need different support from the legal framework if justice is to be done.

The problem with fixed costs is that they treat all cases as if they were the same. Case however are not the same. Some cases are considerably more complicated than others. Complexity does not necessarily run with value. Where it is not possible to complete litigation within the fixed limit of recoverability either someone has to fund the shortfall or the case must be given up.

Where such a situation occurs, a multinational company is better equipped to fund a shortfall in a fixed fee justice system than a widow on benefits. Are we to treat them both the same?

Should there not be some consideration of the question of whether Justice will still be achieved?

Fixed costs bolster the inequality in arms between Claimant and Defendant that already exists between individual citizens and large organisations. Defendants will be able to prevaricate and act unreasonably knowing that they are using up the fixed costs entitlement of the Claimant and thereby pushing it into the iniquitous zone of lawyer only or client only costs.

Imagine for example explaining to the parents of a baby killed by suspected negligence that ‘we have reached the fixed costs limit but the investigation is incomplete because it is complicated. Your case gets only low recoverable fixed costs because it isn’t worth much  so now you will have to pay.’  Would you consider that justice in action?

Overview

We know that Judges would rather not be troubled by the issue of assessing costs or costs budgeting under the current regime. Lawyers too do not enjoy them. Explaining how the CFA regime works can be difficult. Simpler systems undoubtedly exist.

These however are not arguments for fixed costs to be introduced.

Capital punishment has virtues of being definite, cost effective and easy to explain but we have decided that ultimately it does not fit with our definition of Criminal Justice or our values.

The primary concern in Civil Litigation should be to do justice in a system where unreasonable costs can be controlled. In Clinical Negligence there is a strong public interest in maintaining high standards of care and accountability which has been achieved through the availability of damages in the civil courts.

Fixed costs imposes cheap and cheerful ‘poundland justice’ and strangle justice by paying no heed to either the issues, complexity nor the conduct of the parties.

It is difficult to see how the hard and fast nature of fixed costs help justice to be achieved in Civil Litigation. The same costs will be allowed irrespective of the complexity of the case or the conduct of the parties. It is like setting the meter on a taxi journey before knowing how far you are going to go or how difficult the journey will be.

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