26 February 2016 by

Lord Justice Jackson is at it again…

It has been nearly 6 years since Lord Justice Jackson put forward his proposals that fundamentally changed the way in which legal costs are charged and recovered in litigation, and there is no doubt that the implementation of his proposals has had a dramatic impact on the legal profession.

The dust has only recently started to settle as practitioners have become accustomed to the new ways of working and the courts have had the opportunity to lay down precedents on some elements of the new regime.

However, Lord Justice Jackson is now recommending further sweeping changes to the way costs are recovered in litigation. He is proposing to set fixed recoverable legal fees for all claims with a value of up to £250,000 and, to show that he means business, he has proposed exact figures for the cap on recoverable fees at each stage of the litigation process. At the lower end of the scale, for claims valued between £25,000 and £50,000, the total recoverable legal fees would be limited to £18,750 and, at the higher end, for claims valued between £175,001 and £250,000, the limit is proposed at £70,250.

Whilst few will question the good intentions behind these new proposals, this attempt to set financial limits on recoverable fees by reference only to the value of a claim, and so to disregard the potentially huge variation in the complexity of different types of litigation, has many practitioners concerned that these proposals will have an adverse effect on access to justice. In practice, the proposed changes could simply make it more difficult for law firms to undertake certain types of litigation on a basis that is profitable and, therefore, sustainable. Ultimately, that will not be in the best interests of our clients.

Whilst certainty of legal costs is always going to be welcomed by those that  have to use the civil justice system to resolve a dispute, if the proposals do not take into account the huge range of complex cases (of all values) that come before the courts, and the effect that such complexity can have on the costs of litigation, many practitioners may find themselves in the position of simply being unable to take all necessary action to further a client’s interests i.e. within the value of whatever fixed maximum fee is allocated for any given stage of a claim.

The Law Society has responded to Lord Justice Jackson’s proposals confirming that it is  agreeable to the imposition of fixed fees in principle, but that regulation must be sensibly framed so as to cover only those cases where the issues in dispute are not complex, and so that the fixed fee limits are set at levels which encourage efficiency but also allow work to  be carried out profitably. The Law Society has also called for more advanced IT systems to be implemented at court to ensure a fair and effective delivery of any new costs regime – something which practitioners have been advocating for a long time.

As a firm that has undertaken a wide range of litigation, on a fixed fee basis, for many years, these new proposals are of particular interest. This is an important debate that is likely to last well beyond the one year timetable proposed by Lord Justice Jackson for the implementation of his new recommendations, and the outcome  is going to drastically shape access to justice in the future and the working practices of litigators and other legal practitioners.

Watch this space…

If you need any assistance with commercial or civil litigation please contact Marc Thurlow for further legal advice and assistance: MarcThurlow@botlburdon.co.uk or 0207 288 4768.

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