Martin Partington: Spotlight on the Justice System

Keeping the English Legal System under review

Archive for the ‘Chapter 10’ Category

Review of Civil Litigation Costs: Supplementary Report – Lord Justice Jackson

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When Lord Woolf started out on his major programme of reform of the Civil Justice system – which came into effect with the introduction of new Civil Procedure Rules in 1999 – he was concerned about a wide range of issues. The most intractable of the problems he identified was how could the costs of litigation be kept proportionate to the subject matter and value of the dispute.

While there was considerable agreement that many of the changes he recommended had worked well, his proposals on the control of costs had not been as successful as they should have been.

Thus in 2009, Lord Justice Jackson was asked to undertake more work on the costs of civil litigation. His first report on the issue was published in 2010. (Noted in this blog in March 2010)

In 2016, Jackson was asked to revisit this topic, on which he has now published (July 2017) this supplementary report.

As Jackson notes:

In England and Wales, the winning party in litigation is entitled to recover costs from the losing party. The traditional approach has been that the winner adds up its costs at the end and then claims back as much as it can from the loser. That is a recipe for runaway costs.

He therefore argues (as indeed he did in his first report) that there are two fundamental ways to prevent runaway costs.

(i) a general scheme of fixed recoverable costs , i.e. those costs that the winning party can claim from the losing party;

(ii) imposing a budget for each individual case (“costs budgeting”)

Although fixed recoverable costs (FRC) had been introduced for  limited categories of cases before he reported in 2010, he recommended that FRC should be introduced for all fast-track cases. In its response to his first report, the Government did not at the time go that far.

The introduction of costs budgeting was also regarded initially by the legal profession as very controversial, and was not universally welcomed. In this later report, however, evidence from witnesses to his review stated that the system for costs budgeting had now settled down and was widely seen to be working pretty well.

At the heart of this review, there are the following recommendations:

  1. FRC should be introduced for all fast track cases. The amount of costs which are recoverable are laid out in a grid. Different sums are permitted for different stages of proceedings.
  2. Above the fast track, Jackson recommends the creation of a new ‘intermediate’ track for certain claims up to £100,000 which can be tried in three days or less, with no more than two expert witnesses giving oral evidence on each side. The intermediate track will have streamlined procedures and its own grid of FRC.
  3. Clinical negligence claims are often of low financial value, but of huge concern to the individuals on both sides. The complexity of such cases means that they are usually unsuited to either the fast track or the proposed intermediate track. For these Jackson recommends that the Department of Health and the Civil Justice Council should set up a joint working party with both claimant and defendant representatives to develop a bespoke process for handling clinical negligence claims up to £25,000. That bespoke process should have a grid of FRC attached. This scheme will capture most clinical negligence claims.
  4. In relation to business cases, Jackson states that it is essential that small and medium-sized enterprises  should have access to justice. The Federation of Small Businesses argued that there should be an FRC regime for commercial cases up to £250,000; the costs levels must be reasonable; they must balance incentives and “reduce the costs of going to law for small businesses”; there must be rigorous case management of cases subject to this regime; and there must be investment in modern IT systems to speed up court processes. Jackson does not think that all business cases require FRC up to the level suggested by the Federation. Instead he recommends a voluntary pilot of a ‘capped costs’ regime for business and property cases up to £250,000, with streamlined procedures and capped recoverable costs up to £80,000. If the pilot is successful, the regime could be rolled out more widely for use in appropriate cases.
  5. Jackson recommends measures to limit recoverable costs in judicial review claims, by extending the protective costs rules which are currently reserved for environmental cases. As he observes: Citizens must be able to challenge the executive without facing crushing costs liabilities if they lose.
  6. In relation to costs management, the budgeting process will continue to apply to proceedings falling outside the scope of FRC. One problem is that costs management cannot currently apply to costs incurred before the costs management process takes place. Jackson thinks that at some point further consideration may need to be given to setting a limited to these incurred costs, but that should not be considered further at this stage.

It is not known what the response of Government to these proposals will be. Any changes would be subject to further consultations.

The 2017 Jackson review may be accessed at https://www.judiciary.gov.uk/wp-content/uploads/2017/07/fixed-recoverable-costs-supplemental-report-online-2-1.pdf

 

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Written by lwtmp

September 29, 2017 at 3:35 pm

Dealing with whiplash injuries: the Prisons and Courts Bill 2017

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For some time the Government (under pressure from the Insurance industry) has been concerned about the numbers of claims and the aggregate amount of those claims for minor injuries arising from Road Traffic Accidents.

Between November 2016 and January 2017 the Government consulted on a package of measures to tackle the continuing high number and cost of whiplash claims and their impact on motor insurance premiums.

The Government’s  concern was that the volume of road traffic accident related personal injury claims has remained static over the last three years and is over fifty per cent higher than 10 years ago (460,000 claims registered in 2005/06 28 compared with 770,000 in 2015/16) despite a reduction in the number of road traffic accidents reported to the police and improvements in vehicle safety, for example better head restraints.

It was noted that similar improvements in vehicle safety in other jurisdictions have led to a reduction in both the number of claims and motor insurance premiums.

The Government’s view is that the continuing high number of low value claims increases the cost of motor insurance premiums, paid by motorists in England and Wales.  The Government has set out its view that the level of compensation paid to claimants for these claims is also out of proportion to the level of injury suffered. It has therefore decided to  introduce measures to disincentivise minor, exaggerated and fraudulent claims.

Part 5 addresses this matter.

Clause 62 enables the Lord Chancellor to specify in regulations, in the form of a tariff, the damages that a court may award for pain, suffering and loss of amenity (“PSLA”) for relevant whiplash injuries sustained in road traffic accidents,  in those cases where the duration of the injury does not exceed or is not expected to exceed two years. The tariff will provide for an ascending scale of fixed sum payments with the relevant tariff for a particular case identified by reference to the severity of the injury. Regulations may specify different sums for different descriptions of injury.

There will be  power to deviate from the tariff in exceptional circumstances.

Clause 64  bans regulated persons (basically solicitors and barristers, legal executives and alternative business structures) from making or accepting a payment in settlement, or inviting, or offering to settle an RTA related whiplash claim without appropriate medical evidence.

Whether these changes will actually lead to any reduction in insurance costs is currently hard to determine, particularly given other recently announced changes that may result in a general increase in awards of damages for personal injury.

Written by lwtmp

March 8, 2017 at 12:12 pm

Paying for criminal defence advocacy

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Relations between Government and the Criminal Bar have not, in recent years been characterised by a great deal of warmth and mutual understanding. Indeed, criminal barristers went on strike recently against what they regarded as unfair policy on legal aid remuneration.

I am sure it would be overstating things to say that peace has now broken out between the Government and the Criminal Bar.  But a new Consultation Paper on the remuneration of criminal defence advocates (including solicitor advocates) has been published which seems to be the fruit of close working relationship between the two sides.

Certainly the chairman of the Bar Council has welcomed the paper’s publication and has urged advocates to support the recommendations set out in the paper.

One of the key aims of the new proposals is to try to ensure that payments reflect actual work done by advocates on behalf of their clients.

The proposals also seek to reflect the changing nature of criminal trial practice as the criminal courts’ efficiency programme continues to develop.

The proposals also aim to give a sense of career progress to those who undertake criminal defence advocacy. Pay should be higher as experience is gained and more serious cases are undertaken.

The recommendations are not based on any increase in the amount of money available for paying advocates; but they are designed to be a rational response to the changing face of criminal advocacy and to take a fresh look at a payments system that was last looked at 20 years ago.

The details of the consultation – which runs till early March 2017, are at https://www.gov.uk/government/news/proposals-to-reform-criminal-defence-advocates-pay-published

Written by lwtmp

January 23, 2017 at 12:03 pm

Review of fixed recoverable costs

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One of the central recommendations of Lord Justice Jackson’s 2010 Review of civil litigation procedures and costs was greater use of fixed recoverable fees. The principle of fixed costs had been advanced by the Civil Justice Council for a number of years; indeed they helped to negotiate an agreement that this was the way forward for certain low vale Road Accident claims. Jackson wanted to go further and apply the principle of fixed costs to a wider range of types of case and to cases of higher value. He has continued to advocate the need for many more cases to come within the fixed costs regime – in his view, cases up to £250,000.

Now the senior judiciary (The Lord Chief Justice and the Master of the Rolls) have commissioned Lord Justice Jackson to undertake a further exercise to test the practicability and wisdom of his ideas. His review has been given 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.
  • To consider the types and areas of litigation in which such costs should be extended, and the value of claims to which such a regime should apply.
  • To report to the Lord Chief Justice and the Master of the Rolls by the 31st July 2017

It seems highly likely that this exercise will lead to an extension of the existing fixed costs regime.

For details of the announcement see https://www.judiciary.gov.uk/announcements/senior-judiciary-announces-review-of-fixed-recoverable-costs/

 

Written by lwtmp

November 23, 2016 at 10:15 am

Unregulated providers of legal services

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Not all legal services are provided by lawyers or legal executives who are regulated by their professional bodies. There is a group of legal service providers who are not authorised and regulated under any legal sector specific legislation, but who  are providing legal services for profit and as a significant focus of their work.

The Legal Services Board has recently (June 2016) published research on the work of this sector of the legal service market.  The research looked in detail at will-writing, online divorce and intellectual property.

The Key Findings of the research were:

  1. For profit unregulated providers make up a small proportion of the legal services market. In the individual legal needs survey, they represented 4.5-5.5% of cases in which consumers paid for advice or representation.
  2. In contrast, not for profit providers, most of whom will be unregulated, accounted for approximately 37% of all legal problems where advice was sought.
  3. Benefits for consumers include lower prices and greater price transparency compared to regulated providers, innovation and service differentiation, and competitive impact on regulated providers.
  4. The main risks to consumers relate to consumers not making informed choices and misleading advertising claims. The research did not assess the technical quality of work.
  5. Consumer satisfaction with customer service is broadly comparable across regulated and unregulated providers – 84% versus 81% respectively.
  6. More than half of consumers who instruct for profit unregulated providers are aware of their regulatory status. Of those who don’t check, a significant proportion do not do so because they assume that they are regulated.
  7. There is a limited potential market for voluntary regulation beyond existing trade associations given the size of the market and low appetite for such initiatives among providers.

For the time being, at least, the policy conclusions for the Legal Services Board are that

  1. The for profit unregulated sector is smaller than expected, although in some segments these providers have gained a significant market share.
  2. Based on the evidence of benefits and risks to consumers and limited potential market for voluntary regulation beyond existing trade associations, the LSB will monitor developments but will not pursue a voluntary arrangement under the Legal Services Act.
  3. Consumers should be encouraged to check whether or not providers are regulated.

In other words no active intervention for the moment.

Notwithstanding these broad conclusions, the research did look more closely at the work of for profit unregulated providers in three areas: will-writing; divorce; and intellectual property, where not insignificant amounts of legal services work was being undertaken by unregulated providers – around 10% of the work. The dominance in the area of divorce by 5 on-line companies offering very cheap services can be particularly noted.

My guess is that, so long as the unregulated sector provides cost-effective services, with which consumers are satisfied, the lack of regulation will continue. But if there is a highly publicised scandal, then the regulatory context will change.

For the research go to https://research.legalservicesboard.org.uk/wp-content/media/Economic-insight-in-depth-unregulated-research.pdf

Written by lwtmp

July 17, 2016 at 9:53 am

Creation of a Contingent Legal Aid Fund?

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Ideas for  new ways of funding cases for persons of moderate means have been floating around for a number of years. JUSTICE produced a report on the matter as long ago as 1978. The Bar Council returned to the issue in 2008/9 when a policy group, chaired by Guy Mansfield QC, made proposals for the establishment of such a scheme. And suggestions for the creation of a scheme were made to Lord Justice Jackson’s Review of the Costs of Civil Litigation.

In that report, he did not make a definitive recommendation, but he did propose that the Government should undertake further modelling work to see whether a financially viable scheme could be created.

With recent cuts to the publicly funded legal aid scheme, Lord Justice Jackson has returned to the issue in a speech delivered in February 2016. He notes that such a scheme has successfully operated in Hong Kong for a number of years; and that similar schemes also operate in a number of Australian states.

A CLAF would not offer funding in all cases; it would have to be very selective in the cases it took on. As Lord Justice Jackson noted, it would – in effect – be a not-for-profit third party funding scheme. The idea provokes many questions:

  • where would the initial seed corn money come from?
  • how would the fund be sustained?
  • who would decide which cases to support?
  • would the introduction of such a scheme require changes to the normal principle that a loser pays the costs of the winner?

In his lecture, Lord Justice Jackson argues that the time has not come for more detailed work to be done on this issue and argues at the legal profession – the Bar, the Law Society and the Chartered Institute of Legal Executives – should come together an develop proposals.

Whether the legal profession will rise to the Jackson challenge is not at present clear – but it is an issue worth keeping an eye on.

To read the Jackson lecture, visit https://www.judiciary.gov.uk/wp-content/uploads/2016/02/lj-jackson-speech-clf-160202.pdf

Written by lwtmp

March 20, 2016 at 5:11 pm

Posted in Chapter 10

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More fixed costs in civil litigation?

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Lord Justice Jackson is indefatigable. He has not abandoned the issue of the cost of litigation on which he produced a major report at the end of 2009. Since then the Government has taken steps to implement some of Jackson’s proposals. But in his opinion, these have not yet gone far enough. So he has taken a recent opportunity to argue that now is the time for much greater use of fixed costs in the course of litigation.

He set out his views in a lecture delivered in January 2016. You can read the lecture at https://www.judiciary.gov.uk/wp-content/uploads/2016/01/fixedcostslecture-1.pdf

It is not yet known how far the Government is likely to take his proposals, but with the ferment of reforms currently surrounding the civil justice system (among others) it is reasonable to suppose that at least some further extension of fixed costs will be introduced in the not too distant future.

 

 

Written by lwtmp

March 19, 2016 at 3:39 pm