Making changes
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Since the Woolf reforms were introduced in April 1999 the litigation system in England and Wales has been transformed, not least because of the wider use of conditional fee arrangements (CFAs).
But after a decade many litigators are now turning their thoughts to the looming publication of Lord Jackson’s review into civil justice costs.
Jackson is expected to publish before the end of the year and, after vast consultation, will set out a vision of the litigation framework of the future.
In anticipation of the report the Civil Justice Council (CJC), the body that advises the Ministry of Justice (MoJ) on the implementation of such initiatives, will set up a group to consider potential reforms. How the response is coordinated between the two bodies is the most important question, and one that is currently being pondered by the CJC and MoJ.
Meanwhile, the CJC is getting on with the job by establishing another committee to look at the impact of the Woolf reforms on society.
Bob Musgrove, chief executive of the CJC, explains: “This is looking at what has and hasn’t worked [in the past decade]. It’ll fit with Jackson and look at the civil procedure rules and the cost and efficiency of civil justice.”
The wider use of CFAs post-Woolf, which has brought about the ‘loser pays’ notion, was originally confined to low-level PI work, but recently firms such as Mishcon de Reya (28 September 2009) and Leeds-headquartered Walker Morris (19 October 2009) have moved into commercial CFAs in a bid to hold onto their clients.
Jackson is expected to recommend that the loser-pays system is scrapped in favour of alternatives. The overall aim would be to encourage a greater propensity to settle claims by disallowing the presumption that the loser must pay costs. Instead, it is suggested that costs be ordered based on the efforts of both sides to settle.
Effectively, this would move Woolf on a stage and bring about a desire to settle or mediate in all cases, thereby unclogging the court.
Ideal in theory, but remember litigators are lumbered with a conundrum - if a case gets to court it earns more for the firm. Litigators are duty bound to do the best for their clients, but they must also remember the financial demands of their firm.
Jackson will need to convince the profession that by speeding up settlements lawyers will be able to take on more work and make up any loss.
The CJC must look at what has succeeded from Woolf and how this might be developed. It will have to consider the impact of CFAs on all areas of litigation and the impact of costs capping.
Musgrove says the CJC will establish a “vision for civil justice”. It is unclear what that might mean yet, but Musgrove says it will be formulated out of civil justice reviews currently being conducted in several common law countries, including Hong Kong and Australia.
With so much up for debate, it is no wonder that litigators are currently so obsessed with the Jackson review.
Readers' comments (3)
City Gent | 21-Oct-2009 2:05 pm
"... remember litigators are lumbered with a conundrum - if a case gets to court it earns more for the firm. "
This is nonsense. Most good litigators do their best to keep cases out of court. Going to court is a last resort, and is generally a negative experience for all concerned, as well as being expensive for the client.
But there are many cases that are simply not suitable for ADR, for example straightforward debt collection. Debtors who refuse to pay bills that are undisputed should be made to suffer in costs - why should the innocent claimant have to pay?
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Scep Tick | 21-Oct-2009 3:52 pm
Getting rid of loser pays would be the most ludicrous move perhaps in English legal history. It would encourage frivolous claims and attempts at farcical defences. More to the point, how does it square with the human right to have a case tested in Court? A party that wins its entire claim is then penalized because it did not accept an earlier settlement - even though any such offer must have been below its entitlement?
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JJ | 22-Oct-2009 2:23 pm
"Effectively, this would move Woolf on a stage and bring about a desire to settle or mediate in all cases, thereby unclogging the court.
Ideal in theory, but remember litigators are lumbered with a conundrum - if a case gets to court it earns more for the firm. Litigators are duty bound to do the best for their clients, but they must also remember the financial demands of their firm"
This is just wrong. As a litigator my duty is to my client only, not the financial demands of the firm I work in.
As for the proposal to scrap the loser pays principle entirely, it seems to me to be a double edged sword, for obvious reasons.
Instead, Judges should use greater discretion than they do now to award costs on different bases in appropriate cases, to encourage the parties to settle.
But in many cases, parties should be entitled to have their dispute determined by a third party if they cannot settle, without the threat of being penalised on costs - that's why we all pay taxes to have a court system.
The idea that litigants are clogging up the court system is similar to the notion that the NHS would be far more efficient if it didn't have to deal with all the patients
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