Martin Partington: Spotlight on the Justice System

On the same day that the Government announced how it would amend  rules on costs, it also announced that it is consulting on important changes to the organisation and practice of the civil courts. At the heart of the new proposals, there is greater emphasis on fixed costs in litigation; more extensive use of mediation; better use of court buildings (including closure of many courts); increased use of the small claims track; ensuring that only very high value civil cases can be started in the High Court; and creating more flexibility in the ways in which cases are handled in county courts. There are also proposals relating to better enforcement of decisions.

According to the Consultation Paper , the Government’s proposals are based around the following principles:

Proportionality – that disputes should be resolved in the most appropriate forum, so that processes and costs are commensurate with the complexity of the issues involved.

Personal Responsibility – that wherever possible citizens should take responsibility for resolving their own disputes, with the courts being focused on adjudicating particularly complex or legal issues.

Streamlined Procedures – that procedures should be citizen and business friendly with services focussed on the provision of timely justice.

Transparency – to ensure that there is clear information on the dispute resolution options open to citizens so that they can take action early, make informed decisions and more readily access the most appropriate services

To achieve these objectives, the paper proposes:

• Introducing a simplified claims procedure on a fixed costs basis, similar to that for road traffic accidents under £10,000, for more types of personal injury claim; exploring the possibility of extending the framework of such a scheme to cover low value clinical negligence claims; and examining the option of extending the upper limit of those simplified claims procedures to £25,000 or £50,000;

• Introducing a dispute management process and fixed recoverable costs by specific case types up to £100,000;

• Increasing the upper jurisdiction threshold for small claims (excluding personal injury and housing disrepair) from £5,000 to £10,000, £15,000 or £25,000;

• Requiring all cases below the small claims limit to have attempted settlement by mediation, before being considered for a hearing;

• Introducing mediation information/assessment sessions for claims above the small claims limit;

• Encouraging greater use of online dispute-resolution services;

• Providing a simpler and more effective enforcement regime;  and testing the public appetite for further enforcement reforms and jurisdictional changes;

• Introducing a number of jurisdictional changes in the civil courts, including the introduction of a single county court jurisdiction for England & Wales.

Alongside these proposals, the Government says it is improving the information offered to members of the public through enhanced online content available through Directgov, the Government’s central website for the citizen. New content is designed to inform the public about the full range of civil dispute resolution options available to them, including mediation, use of Ombudsmen, industry arbitration schemes and where appropriate, use of statutory regulators.

It also aims to demystify the court process itself, rendering it more navigable to the public, and provide upfront information and warnings about the time and costs involved in pursuing a path of what could be protracted litigation.

This new resource also includes a series of short audio-visual clips, which explain what happens at a court hearing; what happens at mediation; and what may happen as a result of a judgment being enforced. They also include short pieces to camera which help to explain the benefits of mediation over litigation, as well as testimonies from members of the public who have used the mediation process.

Full details are in http://www.justice.gov.uk/consultations/solving-disputes-county-court.htm
The consultation runs until the end of June 2011.

In November 2010, I noted here that the Government had issued a consultation on reforming some of the rules relating to fees and costs in civil litigation, which had been recommended by Lord Justice Jackson. The Government announced on 29 March 2011, that in the light of response to the consultation, it intends to make a number of important changes to the relevant rules and regulations.  The timetable for implementation is not stated; as some of the changes need legislation, this will not happen overnight. These decisions also need to be seen in the light of further proposals for changes to the civil justice system, announced on the same day, and which are considered in my next blog entry.

The changes are detailed and difficult to summarise. In outline,  the Government intends to :

• Abolish the general recoverability of the Conditional Fee Agreement success fee from the losing side. (This proposal returns the position to when CFAs were first allowed in civil litigation in England and Wales in the 1990s.) In future CFA success fees will be paid by the CFA funded party, rather than the other side. The Government thinks that this change will give individual CFA claimants a financial interest in controlling the costs incurred on their behalf.

• Abolish the general recoverability of after the event (ATE) insurance premiums. In future any ATE insurance premium will be paid by the party taking out the insurance, rather than the other side. Again, this returns the position to that which existed in the 1990s.

• Introduce a package of associated measures recommended by Lord Justice Jackson (set out below). (The one exception relates to expert reports in clinical negligence cases. These expert reports can be expensive. There need to be a means of funding them to ensure that meritorious claims can be brought by those who cannot afford to pay for these reports upfront. To address this, the Government intends to have a tightly drawn power to allow recoverability of the ATE insurance premiums to cover the cost of expert reports only in clinical negligence cases. The details would be set out in regulations.)

The associated measures in the package

• In tort cases, there will be an increase of 10% in non-pecuniary general damages which compensate for pain, suffering and loss of amenity.
• Claimants who have been compensated for personal injury should have their damages protected from having too much deducted by their lawyer as a success fee. In personal injury cases, there will be a cap on the amount of damages that may be taken as a success fee. The cap will be set at 25% of the damages other than those for future care and loss. This will help protect claimant’s damages generally, and will specifically protect those relating to future care and loss. Special damages for future care and loss, which can run into many millions of pounds in the most catastrophic injury cases will be protected.
• The maximum success fee that a lawyer may agree with a client under a CFA will remain at 100% of base costs. However, in personal injury cases this would be subject to the 25% cap on damages (other than those for future care and loss) as described above.
• The recoverability of the self-insurance element by membership organisations, equivalent to the ATE insurance premium, will also be abolished. Some trade unions and other membership organisations self-insure in this way.
• A regime of Qualified One Way Costs Shifting (‘QOCS’) will be introduced for personal injury cases, including clinical negligence. This means that an individual claimant is not at risk of paying the defendant’s costs should the claim fail (except in limited prescribed circumstances), but that the defendant – which typically in personal injury cases is a relatively well-resourced body – would have to pay the individual claimant’s costs should the claim succeed. The exceptions will be: (i) on behaviour grounds – where the claimant has acted fraudulently, frivolously or unreasonably in pursuing proceedings – so a reasonable claimant will not be at risk of paying the other side’s costs on behaviour grounds; and (ii) on financial means grounds – only the very wealthy would be at risk of paying any costs. The Government will continue to discuss with stakeholders how the rules should be drafted, including whether any minimum payment to a successful defendant’s costs should be payable by the losing claimant in order to prevent speculative claims. QOCS will not be extended beyond personal injury at this stage, so the normal costs shifting rules will continue to apply in other cases.
• Part 36 of the Civil Procedure Rules (offers to settle) will be amended to equalise the incentives between claimants and defendants to make and accept reasonable offers. This will apply to all civil cases, and the Government will discuss the details with stakeholders in due course.
• Damages-based agreements (contingency fees) will be allowed in civil litigation. DBAs are another type of ‘no win no fee’ agreement, but the lawyer’s fee is related to the damages awarded, rather than the work done by the lawyer. DBAs will provide a useful additional form of funding for claimants, for example in commercial claims. Successful claimants will recover their base costs (the lawyer’s hourly rate fee and disbursements) from defendants as for claims, whether funded under a CFA or otherwise, but in the case of a DBA, the costs recovered from the losing side would be set off against the DBA fee, reducing the amount payable by the claimant to any shortfall between the costs recovered and the DBA fee. DBAs will be subject to similar requirements for parties to the agreement as for CFAs. For example, the amount of the payment that lawyers can take from the damages in personal injury cases will be capped (at 25% of damages excluding for future care and loss).
• A new test of proportionality in costs assessment will be introduced. This will mean that only reasonable and proportionate costs may be recovered from the losing party. This would act as a long stop to control the costs of activity that is clearly disproportionate to the value, complexity and importance of the claim.
• The prescribed rates which successful litigants in person may recover from losing opponents will increase in line with inflation since they were set. These rates have not been increased since the mid-1990s. Business representatives in particular have supported this change, for those cases in which business people represent themselves in court.

Links to all the details can be found at http://www.justice.gov.uk/consultations/jackson-review-151110.htm

In addition to the Consultation Paper on changes to legal aid, the Coalition Government has also published a consultation on changes to the system of costs in civil litigation, which take forward some of the proposals made by Lord Justice Jackson in his review of Civil Litigation costs published in January 2010.

Again the proposals in the Consultation are quite hard to summarise. The following is adapted from the MoJ Press release:

The central objective is “to reduce the spiralling costs payable by people who have been sued in ‘no win no fee’ cases. Defendants are currently liable for substantial additional costs while the claimant has no interest in restraining legal costs when deciding to bring a case. The consultation proposes that the claimant should have a financial interest in controlling costs incurred on their behalf, which would also lead to lawyers having to keep costs down in order to compete for business.”

In order to achieve this objective:

• “The key proposal is to abolish recoverability of success fees and associated costs in no win no fee conditional fee agreements. Under the current regime, defendants must pay these additional costs (which can be substantial) if they lose. The proposal would mean that claimants (emphasis added) have to pay their lawyer’s success fee and will therefore take an interest in controlling the costs being incurred on their behalf.

• “It is also proposed to allow damages-based agreements (also known as contingency fees) in litigation before the courts. These are another form of no win no fee agreement, under which lawyers can take a proportion of the claimants’ damages in fees.  This would increase the funding options available to claimants.

• “The consultation also seeks views on some of Lord Justice Jackson’s other recommendations, which are designed to balance the impact of these major changes, in particular to assist claimants. These recommendations include a 10% increase in general damages, and introducing a mechanism to protect the vast majority of personal injury claimants from paying a winning defendant’s costs (through qualified one way costs shifting).

• “Other proposals would further encourage parties to make and accept reasonable offers, as well as introducing a new test to ensure that overall costs are proportionate.  It is also proposed to increase the costs which can be recovered by people who win their cases without representation by lawyers.”

As with the Consultation Paper on legal aid, these proposals will be subject to a great deal of scrutiny, particularly by the legal profession. Their arguments may, as with legal aid reform, lead to changes in Government thinking. However, there is a good deal of consensus that the costs of civil litigation do need reform.

One of the issues not mentioned directly in the Press Release is the extent to which there should be greater promotion of ‘before the event’ insurance to cover potential costs in legal cases. Reductions in publicly funded legal aid may to an extent be replaced by increases in private funding. The problem with this outcome is that the very poorest cannot afford such insurance.

The Consultation Paper is at http://www.justice.gov.uk/consultations/jackson-review-151110.htm

The consultation is open until 14 February 2011.

At last some detailed policy proposals which will directly impact on the English Legal system are starting to emerge from the Coalition Government. The first, considered here, is a consultation paper on the reform of legal aid. This is accompanied by another consultation paper on costs in civil cases.

The legal aid consultation is actually quite dense and difficult to summarise. The following has been adapted from the MoJ Press Release. It should be noted that, because of the need for legislation to make many of the changes, they are unlikely to come into effect before April 2012. Further, policy on legal aid always attracts detailed attention from lobby groups – in particular the lawyers and the advice sector. It is likely that there will be changes of detail before the final package is introduced. The MoJ estimates savings of around £350m if the changes were introduced without modification. The main changes proposed are:

• Criminal Legal Aid. Retaining legal aid for those criminal cases where it is currently available, in order to ensure fair trials for those accused of more serious criminal offences can access the representation required to provide a fair trial.

• But: Changes will be made to the way that lawyers are paid in criminal cases in order to promote an efficient system of justice and to ensure that the taxpayer is receiving the best possible value for money. The intention is to move towards a competitive market to replace the current system of administratively set fee rates.  In the meantime, there is a series of proposals designed to promote swift and efficient justice as well as to achieve savings.  These include proposals to pay the same fee in respect of a guilty plea in the Crown Court regardless of the stage at which the plea is entered.  In Crown Court cases that could realistically have been dealt with in the magistrates’ courts, it is proposed to pay a single fixed fee for a guilty plea based on fee rates in the magistrates’ court.  This complements other reforms to the justice system designed to encourage cases to be brought quickly and efficiently to justice, so sparing the victim the ordeal of giving evidence in court unnecessarily, and the justice system significant but avoidable costs; and

• To contain the growth in costs of the most expensive (Very High Cost Criminal Cases – VHCCCs) we propose to bring the arrangements for solicitors in VHCCCs into line with those the last Government introduced for advocates. This will mean that more of these cases will be paid within a graduated fee scheme where costs are more easily controlled.

• Civil Legal Aid. Legal aid will still routinely be available in civil and family cases where people’s life or liberty is at stake, or where they are at risk of serious physical harm, or immediate loss of their home.  For example, legal aid will be retained for asylum cases, for debt and housing matters where someone’s home is at immediate risk, and for mental health cases.  It will still be provided where people face intervention from the state in their family affairs which may result in their children being taken into care, and cases involving domestic violence or forced marriage.  It is also proposed to retain legal aid for cases where people seek to hold the state to account by judicial review, for some cases involving discrimination which are currently in scope, and for legal assistance to bereaved families in inquests, including deaths of active service personnel.

• But: Clear choices are proposed in order to introduce a more targeted scheme which directs limited resources to serious issues in civil and family cases which have sufficient priority to justify the use of public funds, subject to people’s means and the merits of the case.
• Thus, some types of cases will no longer routinely qualify for legal aid funding.
  • This  include private family law cases, for example, divorce and child contact, where long-drawn out and acrimonious cases going through the courts can often have a negative impact on the well-being of any children and not necessarily achieve the most effective result.  Funding for cases where domestic violence is involved will, however, continue to receive funding.  And funding will also continue to be provided for mediation as a better alternative to family disputes going to court in most cases.
  • Other civil cases which will no longer routinely qualify for legal aid funding include clinical negligence, where in many cases alternative sources of funding are available, such as “no win no fee” arrangements (Conditional Fee Agreements).
  • Other issues proposed for removal from the scope of the legal aid scheme include debt, education, employment, housing, immigration and welfare benefits (except where there is a risk to anyone’s safety or liberty or a risk of homelessness), where in many cases the issues at stake are not necessarily of a legal nature but require other forms of expert advice to resolve.

• Legal aid funding may still exceptionally be provided for individual cases through a new funding scheme for excluded cases, generally only where it is necessary to meet our domestic and international legal obligations, for example, in a particularly complex clinical negligence case involving a disabled claimant who cannot represent themselves where access to the court could not otherwise be secured.

• In addition, changes will be made to means testing for non-criminal legal aid.  These seek to ensure that those who, on the basis of their disposable capital or income, can pay or contribute towards the costs of their case should be asked to do so.  The proposals include ensuring that all civil legal aid applicants undergo an assessment of their available capital, including those on benefits.  Greater account will also be taken in future of equity in people’s homes when assessing their capital means.  A minimum £100 contribution to their legal costs will be introduced for all successful applicants with £1,000 or more disposable capital, and higher contributions will be expected from those who currently contribute to their legal fees.

• In order to strike a better balance between using tax payers money efficiently, and ensuring that people can access legal aided services where necessary, fees paid in civil and family cases will be reduced by 10% across the board.  It is also proposed to extend lower legal aid ‘risk rates’ in civil cases where costs are likely to be paid by the opponent, pending the introduction of competition once any proposed changes to the scope of civil and family legal aid have bedded in.   Similar levels of reductions are envisaged in experts’ fees to exert greater control over costs.

• Legal advice: Telephone services will be extended to help people find the easiest and most effective ways to resolve problems.

• The paper also consults on suggestions for alternative sources of funding for the legal aid fund, to help supplement existing funding arrangements.  These include making use of the higher rates of interest generated by money invested in a new pooled account where solicitors would hold their clients’ money, and recovering a proportion of legal aid funds in cases where a successful claim for damages has been made.
• Views are also sought on how to make the administration of legal aid more efficient and less bureaucratic for solicitors and barristers doing legal aid work.

So – the proposals combine suggestions for taking cases out of the legal aid altogether, getting clients to pay more, and reducing the money lawyers receive.

It is worth noting that the effect of the proposals relating to legal aid in family cases appear rather to preempt the conclusions that the current inquiry into the family justice system might come up with when in reports in 2011.

The proposals for devising supplementary sources of funds for legal aid could result in some further significant changes. What is not clear from the paper is the extent to which new models for the delivery of legal aid, which have been promoted by the Legal Services Commission, will be sustained.

The consultation paper is at http://www.justice.gov.uk/consultations/legal-aid-reform-151110.htm

The consultation runs until 14 February 2011

So, the Coalition Government has now published its decisions on what public bodies are to be kept, what are to go. Here I comment on the decisions through the specific lens of the English Legal System.

The two highest profile casualties of the cull are the Youth Justice Board and the Administrative Justice and Tribunals Council.

The YJB did have a bit of a reputation for clashing with Government on issues relating to young offenders and how they should be treated in the criminal justice system; presumably  policy will now be taken into the Ministry of Justice. The justification is that this change is wrapped up in a wider review of criminal justice. My view is that the independent voice of the Board will be missed and that Government will still need expert external input into policy making. We shall see.

The Administrative Justice and Tribunals Council, created out of the former Council on Tribunals, had a broad remit to keep administrative justice under review. Given the importance of getting the relationship between the citizen and the state right, ensuring that government operates according to principles of good administration is vital. The Council played a key role in ensuring that different agencies communicated with each other. This facilitative role was particularly important and I think it will be missed.

For me, the most intriguing announcement is that  the whole edifice of independent judicial appointments, created by the previous government, is stated to be under consideration. The new process has not been welcomed by many lawyers but has made judicial appointments more transparent – need to watch this space on this one!

Similarly the future of the Office of the Children’s Commissioner is also under review – an announcement is expected in November 2010.

The public bodies review has usefully tidied up a number of tribunals and brought them into the Tribunals Service. The Residential Property Tribunal Service and the Valuation Tribunal Service, which in my view should always have been in the Tribunals Service, are now to be incorporated. A number of other tribunals are still under consideration for inclusion in the Tribunals service, including the ever popular Plant Varieties and Seeds Tribunal.

The Parole Board has been spared, but its future status and functions are still under review.

The Victims Commissioner is retained, but the Victim’s  Advisory Panel is abolished.

The published list confirms the abolition of a number of bodies which had been announced earlier: these include HM Inspectorate of Court Administration; the Legal Services Commission (not to be confused with the Legal Services Board, which is retained); the Legal Services Ombudsman; and the National Policing Improvement Agency.

On balance, my view is that the legal institutional landscape has changed less than might have been expected. There has actually been some sensible rationalization, particularly in the tribunals world. But I think that the Youth Justice and Administrative Justice worlds have been weakened by the changes.

Full details at http://www.number10.gov.uk/news/latest-news/2010/10/public-body-review-published-55604

Although the results of the Government’s Comprehensive Spending Review are not officially published until 20 October 2010, the widely publicized leaks of the quangos that are likely to be axed suggest there could be some significant change in the legal landscape.

Many of the bodies considered in my book are under threat: they include the Administrative Justice and Tribunals Council, the Civil Justice Council, the Family Justice Council, the Legal Services Commission, many of the Boards that look after local courts, a number of tribunals – even the future of the Law Commission is, according to reports, not secure.

For the list as published in the Daily Telegraph see: http://www.telegraph.co.uk/news/newstopics/politics/8021780/Quango-cuts-full-list-of-bodies-under-review.html

The Coalition Government has developed the concept of the ‘structural reform’ plan as the key tool for making government departments accountable for the implementation of the reforms set out in the Coalition Agreement. They also set the context within which cuts to public expenditure are to be made. In the context of the English Legal System, those most relevant are those published by the Ministry of Justice and the Home Office.
The priorities of the Ministry of Justice are:
1.Reform of sentencing and penalties, ensuring that the justice system protects the public and reduces reoffending by introducing more effective sentencing policies and considering the use of restorative justice for adult and youth crimes
2.Rehabilitation revolution through the development of an offender management system that harnesses the innovation of the private and voluntary sectors, including options for using payment by results, to cut reoffending
3. Courts and legal aid with reform of the legal aid system to make it work more efficiently, whilst protecting the most vulnerable members of society; and developing court reforms to determine how disputes should be resolved, based on principles of transparency, decentralisation and accountability
4. Reform of the prison estate by reviewing the prison estate’s contribution to rehabilitation and reducing reoffending, developing a sustainable and cost-effective prison capacity strategy as part of the Spending Review
5. Civil liberties with a full programme of measures to reverse the erosion of civil liberties and to roll back state intrusion.
The Home Office’s plan also sets out its top five departmental priorities, which are to:
* enable the police and local communities to tackle crime and antisocial behaviour
* increase the accountability of the police to citizens
* secure our borders and control immigration
* protect people’s freedoms and civil liberties
* protect our citizens from terrorism.
Both of these plans were published on 13 July 2010

The newly appointed Secretary of State for Justice, Ken Clarke, has delivered an important speech which gives some clear hints at how justice policy is going to shape up in the coming months. The widely reported feature of the speech related to sentencing policy and Mr Clarke’s desire to prevent the prison population growing even more than it has done in recent years. But the speech contains equally clear hints that there are likely to be significant other developments as well. Three issues are singled out for attention: major restructuring of the court estate, with large numbers of court closures likely; further emphasis on reform of family procedure, with more diversion of cases from court (see also Mavis Maclean podcast); and more change to legal aid. There is little detail in the speech; this will begin to emerge in the autumn. But the speech is worth reading for what is likely to be announced in coming months.
The full speech may be read at http://www.justice.gov.uk/sp300610a.htm