Last year marked the ten-year anniversary of the Civil Procedure Rules, the sweeping reforms of the civil justice system spearheaded by Lord Woolf. Although many of these reforms have been judged successful, it is widely agreed they have failed to curb rising legal costs, often blamed for inhibiting access to justice.
In November 2008 senior judge Lord Justice Jackson was appointed to lead a fundamental review of the system of costs in civil litigation. Lord Justice Jackson’s report was published last month. The key recommendations include:
● Loser pays the winner’s costs: The “loser pays” rule should remain for commercial litigation, but in personal injury and defamation claims, it should operate only in favour of the claimant.
● No win no fee: Parties should continue to be able to use conditional fee agreements (deals where the lawyer is paid an uplift of up to double his or her usual fee if the case is successful) but the additional costs of doing so should not be recoverable from the losing party. Contingency fee agreements (where the lawyer is paid by way of a share in the client’s damages) should now also be introduced, subject to regulation and other safeguards.
● Class actions: The default costs position should be the loser pays rule, but the court should be able to order that a different costs regime should apply in appropriate cases.
● Third party funding: The funding of claims by third party investors with no interest in the litigation (in return for, usually, a share of the proceeds) should be supported.
● Alternative Dispute Resolution: Methods of resolving disputes outside the courtroom, such as mediation, should be encouraged, but should not be compulsory.
● Case management: Cases should, where possible, be assigned to a judge with relevant expertise and should remain with that judge for the life of the case. Judges should be able to adopt robust costs management procedures.
It is now for the government to consider the report and accept or reject the recommendations. If implemented, the reforms are likely to have the most effect on personal injury, clinical negligence, judicial review and defamation claims, which commonly utilise the types of funding which Lord Justice Jackson says should be reformed.
Emily Lew is a litigation associate at Herbert Smith LLP