The Woolf reforms will complicate the legal system and cost clients more money, believes a legal costs expert.
James Diamond, managing director of Legal Costs Services, which prepares figures in court costs disputes, says many of the provisions invite abuse from wealthy groups to the detriment of the less well-off. The requirement that a party must pay the other side's costs 14 days after losing an interlocutory hearing – even if it has a good chance of winning the case overall – instead of being able to set them off against final judgment winnings will, says Diamond, lead to “a summons by warfare”.
“Big insurance companies, will just issue summons after summons, because even if they know they're likely to lose the case, they may still win a summons on a certain point. This could leave a deserving opponent facing a £5,000 bill which they have to pay in a fortnight. Some people won't be able to afford that.”
The abolition of the punitive percentage fee is also open to abuse, claims Diamond. He says that at present if a company wished to appeal, it has had to pay 7.4 per cent of the disputed figure up front. But as the reforms introduce a fixed fee figure of £100 plus interest, “parties will have nothing to lose by appealing”.
Even without such abuses, he asserts, appeals are likely to increase by up to 100-fold due to the need to assess every interlocutory summons. He predicts that in a year's time it may take up to 18 months to set a date for costs assessments.
Diamond claims the “draconian” new time limits that require a paying party to file its objections to the receiving party's costs within 21 days will mean outfits such as his will have to accept less clients because preparing the schedule for each hearing would be so time-consuming. And, he adds that since the provisions allow clients to be charged for preparation of bills of costs, they too will be out of pocket.
“Woolf tried to simplify the system but the measures will instead complicate matters and create more work.”