Lord Justice Jackson gave his latest speech on 28th January 2016 in which he states that ‘High litigation costs inhibit access to justice … If costs prevent access to justice, this undermines the rule of law’.
On the face of it Jackson LJ is absolutely correct in these sentiments but his speech then takes the tone of a Robin Hood figure and proudly speaks of his already implemented series of ‘reforms’ and amendments to the CPR which have reduced the cost and complexity of obtaining access to justice.
So let us have a look at the evidence and practicalities of his reforms to date to see how this measures up.
Pre 1st April 2013
Claimant A successfully pursues a claim for damages in the sum of £30,000 with the benefit of a CFA and ATE insurance against Defendant A. Defendant A pays the full damages and costs of Claimant A including his additional liabilities (as assessed by the Court if necessary); the costs for Claimant A of the access to justice = £0.00
Claimant B unsuccessfully pursues a claim in the same sum against Defendant B, who retains a solicitor under a CFA and ATE insurance. Claimant B’s claim is dismissed and costs are awarded to Defendant B to include his additional liabilities; the costs for Defendant B of the access to Justice = £0.00
Post 1st April 2013
Under the above examples, Claimant A now has to pay up to 25% of his damages to his solicitor but now also has to pay his solicitor the difference between reasonable and necessary costs and those which are now deemed to be proportionate (as assessed by the Court if necessary); Claimant A’s costs of access to justice = £7,500 plus the additional reasonable and necessary costs (some may say that if his claim was reasonably worth £30,000 then as he has only received 75% thereof then he has not actually obtained access to justice in any event).
Defendant B pays his solicitor the difference between reasonable and necessary costs and proportionate costs (as assessed by the Court if necessary).
As for the costs budget reforms these have been neither less expensive to follow nor less complex and the less said about them the better.
The above examples show that Lord Justice Jackson has failed in his attempts to provide a simpler and less complex access to justice and has in fact gone on to do exactly the opposite.
Perhaps when Jackson LJ spoke of his wish to reduce costs to enable access to justice he actually meant increasing costs for access to justice and reducing costs of attempting to deny justice because it appears that the reforms in place are aimed solely at reducing the losing party’s liability for the winning party’s costs.
Now, Lord Justice Jackson delivered a ‘recommendation’ of fixed fees for all litigation with damages up to and including £250,000 and ultimately to all claims. There have been many blogs, responses and outcries in relation to this and all in varying degrees.
Here we look at principles behind his thoughts and the glaring contradictions therein.
Firstly, in the writer’s opinion costs shifting and calculation thereof on a time basis should encourage all litigators to admit liability as soon as possible and attempt early settlement.
With this, and all fixed costs regimes, the opposing party is fully aware of the maximum costs liability and therefore there is no incentive to settle a claim early. Nor is there any benefit to deal with correspondence and procedural steps in an efficient and timely manner as the costs liability will remain the same no matter what.
Jackson LJ refers to his belief that the fixed costs regime in the lower end personal injury claims was working well and as a result ‘This has led to the resolution of hundreds of thousands of personal injury cases per year at a proportionate cost’ within the portal scheme. This statement is also true however whether it represents a true access to justice remains to be seen.
What Jackson LJ seems to forget is that Solicitors and firms thereof are businesses and therefore, like every business, they are not doing this just for the benefit of human kind but to also earn a living, or perish the thought, to make a profit. What is fact, and maybe a surprise to Jackson LJ is that the majority of all cases in the portal are not being dealt with by Partners, or Grade A fee earners, nor are they being conducted by Grade B or even Grade C fee earners. These cases are being dealt with by paralegals and the most junior fee earners within the office. Therefore whether the client or injured party in actually getting access to justice will no doubt be made clear with the advent of ‘Claims Companies’ who revisit cases to consider whether the correct damages were obtained (in the writer’s opinion it is inevitable that mistakes were made and many claims will have been settled well short of a reasonable amount). How many Claimants would believe that they had obtained access to justice when their potentially £24,999 claim was conducted by unqualified fee earners?
With these proposals Solicitors/firms will then have to make a decision as to whether to take any case up to £250,000 on or not based primarily on whether they can undertake conduct within the confines of the fixed fees and if they do not then where is the access to justice?
Lord Justice Jackson also states in his pre-amble ‘Remuneration on a time basis rewards inefficiency’. Is that really true? Is that not the purpose of the detailed assessment process? Was it not to ensure that only reasonable and necessary costs are payable? And the amendment to CPR 44, of which Jackson LJ takes particular pride, has even made the term ‘reasonable and necessary’ irrelevant.
One has to ask, then, who is the true beneficiary of all of these ‘reforms’ and proposals? And it must follow then that the answer to of who is the true beneficiary must be those who have wronged i.e. the unsuccessful party to the claim and those who represent them.
It may well be that the purpose of this particular recommendation is to bring in a lower level of damages than £250,000 for application of fixed fees and that Lord Justice Jackson’s brief for the initial report is to bring down the insurance companies costs liability rather than access to justice with the continuing references to access to justice being just a smoke screen
May be we are looking at this from the wrong perspective. Perhaps we should be looking at why all of these claims are necessary. Is it because people are relying too much on their insurance and the consequences of negligence and/or wrong doing are just not worth worrying about? Then perhaps we should abolish all the fixed fees, double the current hourly rates and make costs liabilities of losing parties higher. Perhaps insurers should only indemnify the damages and part of the costs (perhaps the proportionate costs), with the remaining costs (those deemed reasonable and necessary costs) being the liability of the losing party? Surly the risk of being taken to court, losing and as a consequence losing one’s home and/or personal possessions would be worth worrying about. Would that result in people taking more care, or people not wanting to wrong others?
I think that’s what they call utopia … if only.
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