OPINION
Looking into the fire, we’d rather just stay in the frying pan (thank you very much)
When Lord Justice Jackson’s report is released in July there will likely be significant consequences to legal practitioners. The same practitioners are being given warning of this and being presented with clear opportunity to contribute to the discussion at this stage, shaping (in theory at least) the content of the report itself.
This week, Jackson LJ delivered a keynotes address regarding the progress of his review relating to fixed recoverable costs.
It may come as a surprise to many, but Jackson reports that much of the feedback received by his team suggests ‘cost management is now working much better’. I’d certainly be interested to know whether any of this feedback was sent after the recent decision in Merrix, because to be frank no one yet knows how ‘well’ cost management will work following that judgement. This is before we even consider that further (potentially conflicting) authority will be issued by the Court of Appeal as soon as May…
AND BREATHE…
In any event it is apparent that many are using the reported success of cost management to undermine the necessity of the future expansion of fixed recoverable costs. I can’t imagine previously reluctant practitioners have all of a sudden embraced cost management, instead this reaction seems to be a case of better the devil you know.
‘I can’t imagine previously reluctant practitioners have all of a sudden embraced cost management, instead this reaction seems to be a case of better the devil you know.’
Even without accepting the legislative triumph that is cost management (hmmm), most can at least see the process still allows some flexibility. Practitioners may find cost management an inconvenience and remain unpersuaded it succeeds in mitigating costs, but at least the individual merits of a case are considered before costs are dealt with. When staring down the barrel of uncertain fixed costs, who can blame a practitioner from suddenly flying the flags of CCMC, PHASING and BUDGETING from the office window?
At this stage, it is worth highlighting that an expansion of the fixed costs regime isn’t a just possible outcome of the current review, it is a specific objective. As per Jackson’s speech:
‘In a paper presented to parliament on 15th September 2016 the Lord Chancellor stated…
“We are keen to extend the fixed recoverable costs regime to as many civil cases as possible”’
Further:
‘on 11th November 2016 the Lord Chief Justice and the Master of the Rolls commissioned me to carry out a review with the following terms of reference:
To develop proposals for extending the present civil fixed recoverable costs regime in England and Wales so as to make the costs of going to court more certain, transparent and proportionate for litigants.’
‘An expansion of the fixed costs regime isn’t a just possible outcome of the current review, it is a specific objective.’
On the basis of the above and taking into account Jackson’s own penchant for fixed costs, it seems wishful thinking that by throwing support behind cost management, the threat of fixed costs expansion will disappear. At a minimum I would expect fixed costs to still be extended to all fast track cases regardless of origin. As Jackson highlights:
‘The Bar Council and many other respondents accept in principle that all fast track costs should be fixed. (At the moment only part of the fast track has fixed costs.) In relation to the fast track, therefore, the main task is to identify what figures should be and whether any process changes are required.’
Recently, considerable publicity was given to the scope of fixed costs potentially extending to all claims below £250,000.00. There is nothing in Jackson’s speech which suggests this is now off the table, in fact Jackson specifically references that in the mercantile courts ‘lower value’ means claims up to £250,000.00. Could this be a warning?
Ultimately, the review still appears to be focused on determining where the new line will be drawn for the expansion of fixed costs, rather than whether there will be any change at all. Having said that it will potentially settle some nerves that feedback has highlighted to Jackson the importance of complexity playing a role in setting the new scope, not just value.
Once the new boundaries are determined, it is yet to be seen how any changes will be implemented; whether by process changes or the introduction of a new ‘intermediate track’ as touched on in Jackson’s speech. Hopefully it will be a smoother transition than the fixed costs regime introduced in 2013 which is still being ironed out 4 years later.