Claire McNamara and Nick Pryor, Berwin Leighton Paisner
'A real concern' over Jackson, says BLP
1 November 2012
Sir Rupert Jackson’s final report into civil litigation costs ran to nearly 600 pages, plus appendices.
His proposal for “a coherent package of interlocking reforms” was bold, and the principles themselves commendable. Undoubtedly the bodies responsible for implementation, overseen by the Judicial Steering Group, are working incredibly hard to meet the April 2013 deadline. But delivering on the potential of the proposals is a daunting prospect, requiring a huge range of measures to be finalised in a very short space of time. Many details remain outstanding, and some proposals are still under consultation.
This is compounded by the somewhat ad hoc manner in which the reforms have been communicated to the profession - primarily through transcripts to a series of invite-only lectures by the judiciary. It has left many practitioners with a broad sense of what is to come (DBAs, cost management/budgeting, disclosure menus, uplifted damages, etc) but less comfortable on the specifics.
These devilish details are key to the success of the reforms; Sir Rupert Jackson emphasised the delicate balance between each of his proposals, stressing that they could not be adopted piecemeal. This is, in part, what makes implementation so fiendish. For example, Sir Rupert Jackson recommended that CFA recoverability be revoked from April (and the Government legislated accordingly); but in return, he advocated a 10% uplift in general damages. The Court of Appeal introduced this uplift through its judgment in Simmonds v Castle, but left open the potential for claimants to benefit twice by recovering under a CFA predating 1 April 2013 whilst receiving a 10% damages uplift on a post-April judgment. It took a high profile intervention, and a graciously revised judgment, to address this overlap between two comparatively straightforward reforms.
Other elements also require clarification. Damages Based Agreements may appear conceptually straightforward (solicitors can agree to receive part, or all, of their fees only in the event of success, calculated as a percentage of any damages recovered) but none of the critical details have been confirmed. There has not yet even been a final decision over whether DBAs will be capped (and if so, at what level). The Civil Justice Council advocated no cap for most commercial litigation, but the Ministry of Justice initiated a statutory consultation earlier this month, proposing a cap of 50% (25% for personal injury claims) with little explanation.
Furthermore,, how do DBAs interact with interpartes fee recovery? It seems we can expect a variation of the “Ontario model”, advocated by Sir Rupert Jackson and supported by the Civil Justice Council. But there has been no official word from the Ministry of Justice, leaving practitioners unable to make an informed decision as to whether DBAs will be suitable for their business, let alone being able to prepare draft DBA terms for their potential clients.
Ultimately, one has to trust that these sorts of issues will be resolved before April. But long-term success for the reforms ultimately hinges on how they are applied by the judiciary and the profession. Nowhere is this more so than in relation to costs management. It is intended that a receiving party will recover their costs in full provided they come within budget (see, e.g., Safetynet); conversely, the court cannot award costs in excess of budget (see Sylvia Henry). However, it is unclear how all this will impact on the judiciary’s discretion to award costs - does this clear and binary approach preclude the judiciary’s ability to punish bad behaviour by awarding costs on a more favourable basis under Part 44, or to award indemnity costs under Part 36?
The new disclosure “menu” system also requires robust judicial control. One hopes that the introduction of six options for the scope of disclosure will provide flexibility and efficiency. However, this depends upon a consistent judicial approach to disclosure - not least so that solicitors can provide clients with a realistic assessment of the likely cost and duration of a disclosure exercise at the outset of litigation.
The judiciary are receiving training on the reforms, which will presumably cover many of these issues. But given the complexity and scope of the changes, there is a real concern over the reported brevity of the training programme. Much of the rhetoric behind the Jackson Reforms echoes the Woolf Reforms a decade earlier. Experience suggests that the success of these reforms, however well-conceived, depends upon thorough drafting, strong judicial direction, and clear guidance to encourage practitioner support.
Claire McNamara, associate director - head of LDR know-how and Nick Pryor, knowledge development lawyer, Berwin Leighton Paisner