Lord Justice Jackson, the architect of the civil costs review and the present civil costs regime, recently called for fixed costs to apply to all claims valued up to £250,000. Further to his initial review which was delivered to Master of the Rolls, Lord Neuberger in 2010, L. J. Jackson has now urged government ministers to make reform an immediate priority with a view to setting fixed recoverable costs by the end of this year.
The Law Society, however, has voiced serious concerns over his proposals. Whilst the Society is supportive of the ‘fixed costs’ principle in limited circumstances, it has argued that their application in relation to highly complex cases would be ‘totally inappropriate’ and would ultimately undermine access to justice.
So what exactly has Lord Justice Jackson suggested? Well, instigated the cost-cutting reforms whichformed the second part of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, Jackson has now said the time has come to significantly extend the fixed fees regime. Currently fixed costsonly apply to personal injury claims valued up to £25,000; however Lord Justice Jackson has now recommended that every type of civil claim up to £250,000 should be subject to new restrictions.
In a speech in Westminster, he even went as far as to suggest a grid of rates – minus disbursements and VAT – for each value of claim: £18,750 for claims up to £50,000; £30,000 for claims up to £100,000; £47,500 for claims up to £175,000, and £70,250 for claims up to £250,000. However, he did advise the government to put on hold plans to fix the fees in clinical negligence claims to stop what he called the ‘Balkanisation’ of fees for different types of claims:
“What we do not want to have is a series of separate grids for different types of cases,” he said.
“There should be a single fixed costs grid for all multi-track cases up to £250,000.’”
He argued that applying fixed costs to claims valued over £250,000 would not be welcome by solicitors acting for both claimants and defendants, claiming that it ‘would be too great a change for the profession to accept’: however, he said the reform would save on the pressures of costs management and help solicitors to explain to clients how costs have been accrued. He also went on to suggest a universal costs regime could be implemented once people see how it works.
Lord Justice Jackson said practitioners’ experience of fixed fees in low-value claims – as well as in the IP Enterprise Court – has been ‘satisfactory’:
“My impression is that the profession is now more willing to accept fixed costs than it was in the past. I do accept if we have a regime of fixed costs there will be winners and losers – it is impossible a case will cost the client precisely the amount set out in the grid.”
“That [however] is a price worth paying in order to obtain the benefits of certainty, predictability and proportionality – I have come across cases which have flown out of control where the issue is of modest value.”
Responding to Lord Justice Jackson’s recommendations, Law Society president, Jonathan Smithers, said that while the Society supports the principle of fixed costs for lower value and less complex cases, it is ‘extremely concerned’ at the proposal costs should be fixed for all claims up to £250,000.
This represents a tenfold increase on the current limit for many claims.
“The application of fixed costs for highly complex cases is likely to be totally inappropriate and would raise significant questions about the ability of many people to access justice.”
“A single approach for all cases, regardless of complexity, will lead to many cases being economically unviable to pursue which undermines the principle of justice delivering fairness for all. We are also concerned by the suggestion that these proposals could be consulted on and implemented within a year as we believe this is unrealistic.”
“While Lord Justice Jackson does not speak with the authority of the government his views are clearly of huge interest. We support his call for a delay in the implementation of fixed costs in clinical negligence cases. Fixed fees are simply not appropriate in cases where a baby has died as a result of negligent care. A fixed costs scheme could curtail the ability for important cases to be brought, where the severity of the issue is not reflected in monetary terms but the purpose of the case is to reduce incidents of harm in the future by ensuring lessons are learned.”
“The introduction of fixed recoverable costs for further civil work has been expected for some time and the Law Society agrees that they could be appropriate in low-value claims as they can provide greater certainty for both sides in litigation and they avoid protracted disputes about the level of costs. They can also reduce the problems caused by costs budgeting and assessment in civil litigation,” he added.