During a House of Lords debate on 26 February 2013, Lord Beecham was unflinching in his criticism of the proposed implementation date of the Jackson reforms.
He observed:
“My Lords, I always like to be consistent and it certainly would be inconsistent of me not to begin with a complaint about the process here. These regulations come to us some five weeks before they are due to take effect. The Bar Council has drawn attention to this, rightly stressing that a major change in the law, particularly in relation to DBA’s, is being introduced with very little time before they come into effect for people to work out how it is going to be applied”.
The implementation date of 1 April 2013 means there is less than a fortnight for litigants, courts, and practitioners to comprehend what has been described by Lord Beecham, as being a “pretty defective-looking set of regulations”.
So what forms part of the Jackson reforms?
- Contingency fee agreements (now called "damages-based agreements") will be permissible for all types of litigation;
- Litigants who have entered into a conditional fee agreement with their lawyer will no longer be able to recover the success fee when they win their case, and similarly after-the event insurance premiums will not be recoverable from the losing side;
- The disclosure exercise will be tailored to each specific case;
- There will be a change in respect of a defendant having to pay an additional sum to a claimant where the defendant fails to beat a claimant's Part 36 offer to settle (this reverses Carver v BAA [2008] EWCA Civ 412 in which it was held that where a claimant beat a defendant’s Part 36 offer but only just, the claimant should prima facie pay the costs from the date of this offer);
- The small claims jurisdiction for cases other than personal injury claims will be increased from £5,000 to £10,000;
- Claims worth £100,000 or less will no longer be able to be heard in the High Court and so will come before the County Court (the current limit is £25,000);
- There is more encouragement towards mediation and consideration of schemes for pre-action directions;
- Judges will be encouraged to use their case management powers more strictly, &
- Judges will also manage the costs of litigation by approving the parties' budgets for costs.
For those unaware of the implications of the new regulations, they will revoke the 2000 Conditional Fee Agreement Order, which allowed for a means of litigation funding where the solicitor agreed to perform the litigation services for no fee if the litigation is unsuccessful. If, however, the litigation is successful, then the solicitor is entitled to claim an uplift, which is known as a success fee, in addition to their base costs. This uplift is recoverable from the losing defendant.
In his Review of Civil Litigation Costs, Lord Jackson made the point that,
“In some areas of civil litigation costs are disproportionate and impede access to justice. I therefore propose a coherent package of interlocking reforms, designed to control costs and promote access to justice.”
Lord Jackson recommended that the right to recover additional fees from the losing side should be removed, in all cases, and as a result Part 2 Sections 44 – 62 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LAPSO”) will be implemented, which restrict the ability of the claimant, or indeed their legal practitioner, to recover more than their base costs.
It is clear that Rupert Jackson is clearly trying to promote justice and access to the courts system for the majority of those who require it. Therefore, given that this is the main focus, it must be assessed if this is actually the case as this will help to establish the success of any legislation. The prime areas for clarification are: how damages-based agreements will be regulated; what changes will be made to Part 36, and the contents of the new rule on disclosure.
There is a justifiable concern within the legal profession at the lack of time which it will have to digest and prepare for the new rules. The Law Society's president, Lucy Scott-Moncrieff, has written to the Justice Secretary/Lord Chancellor Chris Grayling, recommending that implementation be deferred again. Her concern - shared by many - is that, even if the current deadline is achievable, rushing to meet it "at breakneck speed" is a "recipe for chaos".
Nevertheless, the main question is will these reforms actually provide the access to justice that Rupert Jackson intends? If he intends to provide access to justice, he must also intend for there to be a greater level of access to the courts, as this is where justice would be achieved. By cutting out success fees and after the fact costs, this could potentially lead to more mediation instead of using the court system, which may benefit all parties as attending court can be an anxious experience and the courts are often overwhelmed by trivial cases.
So are the reforms really a call for practitioners to press the panic button? Or should we welcome a set of changes aimed at extending access to justice to all?
Overall, it is clear that the aim is to make the dispute resolution process quicker, cheaper and easier. As Jackson himself says,
“The idea that justice has no price tag is unacceptable in the modern world. Our civil system must mend its ways and provide every court user, whoever they may be, with a dispute resolution system at a proportionate cost. This provision is my objective. I have sought to deliver it by proposing a structured package of integrated rules applicable to the conduct of proceedings, funding, and costs.”
Therefore, practitioners now need to give serious consideration to costs budgets and look to embrace these changes with careful compliance being at the back of their minds at all times. Failure to observe these changes may result in draconian measures with costs penalties being imposed by the Court. In spite of dire warnings about the effects of the Jackson proposals on access to justice and on the wellbeing and finances of lawyers, the government has decided to press on with implementation of Lord Justice Jackson’s recommendations for the reform of civil costs. How effective these reforms will be on the dispute resolution process is yet to be seen but there is no doubt, the Jackson reforms are here and are here to stay.
If you require further information on this or on any of these changes and how it may affect you, please contact Jeffrey Lewis or Jasbir Kaur, our Litigation Specialist, on 0207-387-2032.
