The time has now come to introduce an extensive regime of fixed costs for civil litigation, argued Lord Justice Jackson in his lecture of 28 January 2016.
He proposes;
The high level of litigation costs are inhibiting access to justice and are a problem not only for individual litigants, but also for public justice generally.
The present level of costs and complexity of civil litigation has evolved over time under the influence of costs shifting and the system of ‘hourly rate’ remuneration.
Remuneration on a time basis rewards inefficiency. Unrestrained costs shifting drives parties to leave no stone unturned: the more costs mount up, the more determined each party becomes to ensure that the other party pays them.
Fixed costs have now been introduced for personal injury cases in the fast track. The costs of medical reports for soft tissue injuries in fast track RTA claims have also been fixed.
The recoverability of success fees and ATE premiums has cut out one layer of excessive costs. Costs management, when done properly by competent practitioners and judges, has done much to control the level of costs as has the introduction of the new test of proportionality.
Lord Justice Jackson is of the view that the time has now come to devise and establish a coherent scheme of fixed costs for the whole of the fast track and for the lower reaches of the multi-track.
He recognises that in future years many of the current fast track cases may proceed in the Online Court (proposed by Briggs LJ in his recent report) and be subject to a completely different regime. As a result he has not suggested any specific amounts for the fixed costs for consideration at the fast track level.
However, he invites consideration of the grid of fixed costs below:
| Phases | Band 1 (£25,000 - £50,000) | Band 2 (£50,001 - £100,000) | Band 3 (£100,001 - £175,000) | Band 4 (£175,001 - £250,000) |
|---|---|---|---|---|
| Pre action | £3,250 | £5,250 | £8,750 | £12,000 |
| Issue/statements of case (add 25% if counterclaim) | £1,400 | £2,250 | £3,750 | £5,750 |
| CMC | £950 | £1,500 | £1,500 | £1,750 |
| Disclosure | £1,875 | £3,000 | £3,500 | £5,000 |
| Witness statements (add 10% per expert approved by the court over 3) | £1,875 | £3,000 | £5,000 | £7,500 |
| Expert reports (add 10% per expert approved by the court over 2) | £1,400 | £2,250 | £3,750 | £5,500 |
| PTR | £950 | £1,500 | £1,500 | £1,750 |
| Trial Preparation (add 5% per day for the 6th and subsequent days if trial fixed for more than 5 days) | £1,900 | £3,000 | £5,000 | £7,500 |
| Trial | £3,750 | £6,000 | £11,000 | £18,000 |
| Negotiations/ADR | £1,400 | £2,250 | £3,750 | £5,500 |
| TOTAL | £18,750 | £30,000 | £47,500 | £70,250 |
The grid follows the phases used in costs budgets on multi track cases.
The value of the claim in each band includes counsel but excludes other disbursements, VAT and cost of enforcement. The costs on claims above £250,000 are to be controlled through costs management.
Lord Justice Jackson also sets out a number of rules as follows:
LJ Jackson considers that following consultation the Government should decide whether to have a totally fixed costs regime or merely to fix costs for the lower reaches of the multi-track.
Once that decision has been made then details of the new fixed costs regime will need to be drawn up by a senior judge who doesn’t mind being pilloried.
We need an all-embracing fixed costs regime to include clinical negligence claims rather than a separate set of fixed costs for different types of cases (and LJ Jackson has advised the Government to put the fixed fees consultation for clinical negligence claims on hold).
If the political will is there, LJ Jackson considers that this whole project could be accomplished during the course of this year.
Fixed costs have been a key component of the Jackson reforms and we welcome the call for an extension of the fixed costs regime to all civil claims. We expect Government to respond to the mounting judicial pressure especially given the recent remarks of Lord Faulks (Minister for Justice) that the Government is still keen to do more to reform ‘enormous’ legal costs.
We await a response from Government to the call for further consultation and will engage with the senior judge and the CJC. As ever, the devil will be in the detail and will have to be carefully managed in the face of robust opposition from the claimant lobby.
The full speech can be found at:
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