Lord Justice Jackson gave us all some weekend reading last Friday with a 1,000-page preliminary report on his review of civil litigation costs. And what a document it is.
“Oh God! It’s so big,” declares Edwin Coe litigation partner David Greene.
“I suppose it helpfully articulated the issues,” adds Mayer Brown partner Clare Canning.
Scores of litigators were queuing around the block to comment on Jackson LJ’s review, but in the end was there much to comment on?
Much has been made of the year-long review, which was commissioned by the Master of the Rolls Sir Anthony Clarke last November. Lawyers across the City and beyond were sceptical about whether it make any difference at all? Why is it being done now, they asked? Should the Master of Rolls do the review himself?
There is no doubt that Jackson LJ has put the hours in. The sheer depth of the report tells many people what they already know, but deep down in the detail there are some real hints about how he sees the litigation process developing.
First, he’s right to say that one size will not fit all. Had Jackson LJ even dared to suggest otherwise he would have found himself in the middle of a storm – and when dealing with litigators that wouldn’t be a fun prospect.
Second, Jackson LJ appears to be leaning towards the modernisation of conditional fee agreements. CMS Cameron McKenna head of dispute resolution Liam O’Connell points to arguments surrounding after-the-event (ATE) insurance and suggests it is now in the “firing line”.
He says: “It’s seen as an unnecessary cost of litigation that can and should be eliminated.”
But wholesale change of the costs shifting rule would be impossible. An entire industry has grown up around Lord Woolf’s CFA regime and Jackson LJ can see that it offers some benefit to practitioners.
But it also has its downfalls and Jackson LJ has hinted that the system should be modernised with a fixed costs regime installed for fast track cases and a new process for personal injury claims. Costs capping would appear to be rejected.
Sound familiar? Didn’t the Ministry of Justice (MoJ) publish similar findings in April 2007 after spending many months looking at personal injury? Under those proposals, claimant lawyers would no longer be able to claw back referral fees from claims businesses and ATE premiums through the settlement. Instead success fees would pay the solicitors’ costs, which were expected to become proportionate to the overall settlement.
After more debate and more reviews those suggestions were rejected.
“Here we go again,” says one senior partner. “It’s another bloody review for review’s sake. It would be far better to empower the judges than waste time doing this.”
But, to be fair to Jackson LJ, Canning at Mayer Brown says the report is a “valiant effort”.
And Jackson LJ seems to have achieved the near impossible by impressing the Forum of Insurance Lawyers. President Anthony Hughes says: “What’s particularly pleasing to see is that the report is neutral in tone and apparently free from political interference. As a consequence, we feel that Jackson has the real potential to deliver.”
The onus is now on the litigation profession to pull together and find a way to improve access to justice.
Desmond Brown, chairman of the Bar Association, speaks for a large proportion of the profession when he says: “Public funding for civil cases is now unavailable in many areas. Very careful consideration therefore needs to be given to the means whereby meritorious litigants are assured of the access to justice which they deserve.”
London is a world class litigation centre, but for it to stay as such it must modernise.
Richard Smith, Litigation partner at Allen & Overy
We do not have the answers yet but it is clear that one size will not fit all. There seems little appetite for slaying the sacred cow of costs shifting but further inroads are likely to be made in pursuit of access to justice. The Commercial Court may well be left to continue its own reform programme.
Desmond Browne QC, the Chairman of the Bar
It comes as no surprise that Lord Justice Jackson’s interim report is an impressive piece of work, reflecting his intensive investigation in recent months of the issue of legal costs and access to justice in civil proceedings. His report reflects practice both at home and around the globe.
Anthony Hughes, President Forum of Insurance Lawyers
It is important to note that the real work starts now. With the second ‘consultation’ stage of the process underway, more research and discussion is needed, and FOIL is ready and willing to engage with all parties to debate the necessary changes to the system.
Bob Gordon First Class Legal
We note that the Report does separate issues around the use of ATE insurance in relation to personal injury cases as against other areas of civil and commercial litigation (referred to in the Report as ‘commercial cases’), which is a good thing. However, the point is that these issues do not sit in isolation: a key is to understand their interraction with third party funding.
From the conversations we have had to date with LJ Jackson and his committee, we know that they do recognise that much of the recent innovations in litigation funding, and thus access to justice, have come from the ATE corner of the market. And there is much much more to come – even more comprehensive funding methodoloies that will take to another level entirely the current models that the marketplace is only now starting to become familiar with. These innovations will rely on exactly the kind of interraction between ATE insurance and third party funding referred to above and this is why it is critical that this is fully addressed during the consultation period.
Association of Personal Injury Lawyers
This was always going to be a thought-provoking paper and we welcome Lord Justice Jackson’s openness to comment. It is disappointing, though, to see more references to an increase in the small claims limit, when much time was spent discussing this with the Ministry of Justice, only last year.
We welcomed the opportunity for discussion with Lord Jackson at the beginning of the year and are encouraged by his reference to the need for access to justice. This detailed and lengthy paper will require our careful consideration over the coming weeks, in consultation with our members.
David Hartley, Director of ATE Services, Abbey Legal Protection
Uncertainty over costs is a major concern for companies seeking to resolve disputes. When businesses are less willing to spend money and the cost of litigation is greater, there is a strong argument for risk sharing.
Law firms must therefore be far more creative about the way they construct their fees if they wish to remain competitive and we welcome Lord Justice Jackson’s initial thoughts in provoking this debate. Historically, lawyers have sat in front of their clients, now they need to stand beside them, a position ATE Insurers regularly ourselves in
David Allen – head of litigation in London at Mayer Brown
This report is a laudable attempt to grapple with the difficult issue of litigation costs. However, this is not an area where a one size fits all approach will work, as is helpfully acknowledged in the report.
Large, complex cases are always expensive and therefore require a different approach, but there is already a vast array of case management machinery available to judges. Ultimately however many new rules are introduced it always comes back to the judge’s ability to manage a case effectively.
Practitioners should always be receptive to change and improvement but we shouldn’t be thrown off course by a couple of cases in which costs may appear to have been disproportionate. If we want to continue to have a court system which, at its highest level is efficient, fair and the envy of many other jurisdictions, that will come at a price.
This is not to encourage complacency but to recognise that we have a system that works well in higher value complex cases.
Rome is burning and we have another lengthy report. Great.
Lengthy but admirably thorough, especially given the time Jackson LJ has had. Has to be given any firestorm when proper recommendations come.
Jackson states this should save people millions and Jack Straw has called this a remarkable piece of work. You can say that again, its full to the brim of contradicting statements. So lets not charge the insurers (who if paying is clearly the wrongdoer). I hear champagne glasses clinking!. Lets however take a significant cut of the victims money. Hold on! lets limit the cut it to 25% but then lets increase the awards by 10% so the actual money taken out of the damages is greater. How’s that helping? And if you withdraw success fees but replace it with 10% more damages, where’s the saving? Is this change for the sake of change?. Its does not end there, lets make the Claimant pay (the insurers of course) higher premiums for homeowners legal insurance to cover a claim that might never happened and what about the Claimant’s who cannot afford a home or extra insurance. Sorry, but a fail to see the point and do not consider this enhancing ‘Access to Justice’.
We are not long out of the woods of huge volumes of satellite litigation flowing from the dramatic and ill thought out changes to litigation we have all seen over the last decade or so. Just as a status quo is reached, the goalposts shift more dramatically than ever before. I wander how long it will take for the “millions” saved to be swallowed up in the resurgence of inevitable satellite litigation? And if implemented, will the vast savings which make all this worthwhile result in a decrease in my car insurance renewal or home contents insurance? Or will there in fact be no benefit at all to the public?
Wholesale criticism of the current regime is noted, but perhaps LJ Jackson should remind himself that the regime was not introduced at the behest of practitioners.
Perhaps he should also remind himself of what he learned all those years ago; That the aim of the legal system is to put an injured person back in the financial position they would have been in had they not suffered injury at the hands of the negligent party. I do not recall (and I studied more recently I suspect) a caveat that up to 25% of those damages will be whipped away to effectively subsidise the insurance industry. At Macro level, this would be the net result of the proposed reforms. At Micro level, a claimant will have to pay for the privilege of their opponent and insurers taking unsustainable and ridiculous points, defending indefensible claims, delaying and otherwise generating the sort of costs which so concern LJ Jackson. Perhaps the reasons behind the levels of costs claimed requires rather more consideration.
An impressive piece of work it may be from an academic perspective. It’s relevance however, in the real world, escapes me just as it will escape those of my future clients from whom I am forced to demand a percentage of their damages.
well said Daryl L Robinson