Fixing fixed costs: Jackson starts new consultation and will set out proposals next year

11 Nov 2016

Lord Justice Jackson is a committed advocate of extending fixed recoverable costs beyond the present scope of fast track motor and EL/PL claims. His eponymous review made very firm recommendations to this effect in 2009. Since then he has given lectures and papers repeating the call for extending fixed costs. He did so again in his textbook “The Reform of Civil Litigation” published only a few weeks ago.

The Government and the senior judiciary ‘get’ the arguments for fixed costs. The joint statement and consultation in September entitled “Transforming our Justice System” made this very clear: “We are keen to extend the fixed recoverable costs regime to as many civil cases as possible. The senior judiciary will be developing proposals on which we will then consult.”

That process has now started with the announcement today that Jackson LJ - who else? - has been commissioned to undertake a further review and make recommendations about extending the use and scope of fixed recoverable costs.

Submissions have been requested “immediately”, and up to a response deadline of 16 January 2017. Jackson LJ will then prepare his report by the end of July 2017.

Some points to consider for now:

  • The die is very much cast here and extended fixed recoverable costs are going to happen, bar some major and wholly unforeseen circumstances. This has nothing to do with Brexit and that should not affect what happens here.
  • Jackson gets things done. His new report will be delivered on time and its proposals will be taken forward, just as his previous reforms were. They could apply as early as, say, April 2018.
  • The transitional arrangements could be that any new fixed recoverable costs regime applies to cases issued after April 2018. If so, bet heavily on a spike in issued cases in the first quarter of that year.
  • Jackson LJ very probably still holds to his January 2016 view that costs could be fixed for civil claims up to £250,000 in value. That does, however, feel somewhat high and calls for say £100,000 or £50,000 as alternative upper bounds are to be expected.
  • Expect a good deal of remarks along the lines of welcoming in principle, devil in detail etc from legal groups. A cynical interpretation is that these sorts of views generally mean we don’t welcome it at all, so let’s argue about the detail and delay it as long as possible.
  • Similarly, expect a huge amount of noise about the exceptions that need to be provided for as part of the overall fixed recoverable cost regime. While exceptions and so-called escape clauses are important, if it is to be effective in controlling costs and behaviours then the fixed costs regime should be much more of a blanket than a net.
  • There will be calls for the behaviour of defendants to be scrutinised more closely, which seems a reasonable enough point, at least in the case of asymmetric litigation, such as personal injury claims or consumer disputes. The apparent fear here is that repeat institutional defendants will behave in such a way as to force claimants to incur legal fees far in excess of that which can be recovered and thus force unfair settlements. This fear may be something of a chimaera and it will be interesting to see if any evidence emerges of this sort of tactic.
  • It is not yet clear if proposals for fixed recoverable costs in clinical negligence claims will be announced separately by the Department of Health or will be subsumed in this new Jackson review. Jackson LJ has already nailed his colours to the mast on this, stating in his textbook that “Clinical negligence claims are not so different from all other claims that they should have their own separate regime in advance. Such an approach would lead to an unwelcome Balkanisation of civil litigation.” The Department of Health may perhaps feel otherwise.

Please contact me for any further information about the new review and our plans for engaging with the consultation process that started today.

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to clients of BLM. Specialist legal advice should always be sought in any particular case.

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